Condo documents, decoded

A FOUNDRY COMPANY FIELD GUIDE · NO. 07

A condominium purchase comes with a package of documents that gets opened once and rarely again. Alberta's Condominium Property Act prescribes what has to be in it, who has to produce it and how long they get. Here is what arrives and what we read first.

Two different documents get called the condo documents

The first is the estoppel certificate. It covers your unit and it covers money, meaning the contribution payable, how often it is payable, whatever is in arrears, and interest owing on an unpaid balance. Its power is evidentiary, since the Act makes it conclusive proof of what it certifies as of its date.

The second is the prescribed list of information and documents, which covers the whole corporation. That is the thick part of the package, and the regulation sets out what belongs in it item by item.

The corporation has ten days, and asking starts the clock

The duty sits on the corporation rather than on the seller. An owner, a purchaser, a mortgagee, or a solicitor for any of them can make a written request, and the corporation has ten days to produce. A purchaser can therefore ask directly, which is useful when a seller is slow.

Ten days is short and it does not start until somebody asks, so the request is the first thing to make rather than the thing to make once an offer is accepted. A seller preparing to list is better off starting it before the sign goes up. What a seller does before the listing covers that side of it.

The reserve fund report is the one to read first

Alberta requires a reserve fund reasonably sufficient for major repairs and replacements, limited to work that does not normally happen every year. A qualified provider prepares the study and report, and the board approves a plan setting out how the money gets collected.

The cycle is five years, and the clock is the detail people get wrong. A new study, report and plan is due on or before five years from the day the latest plan was approved rather than five years from the last study. A study inventories the depreciating property that may need work over the next thirty years or longer, gives each component its condition, its timing, its estimated cost and its life expectancy after the work, and requires an on-site visual inspection of everything visible.

The bylaws that count are the registered ones

A corporation starts with the bylaws in the regulation and keeps them until a special resolution replaces them. A special resolution in Alberta means seventy-five per cent of everybody entitled to vote and seventy-five per cent of the total unit factors, which is why bylaw amendments are difficult to pass.

An amendment does not take effect when it passes. It takes effect when the corporation files it with the Registrar and the Registrar notes the filing on the condominium plan. An unregistered amendment in a package is showing you something nobody can enforce, and sorting the registered from the rest is part of the lawyer's job.

The usual restriction categories are pets, age, aesthetics such as window coverings and balcony planters, renovation requirements such as flooring, parking, and amenity hours. On renting, the Act says no bylaw operates to prohibit or restrict a transfer, lease, mortgage or other dealing with a unit, so a bylaw purporting to ban rentals outright is on difficult ground.

Rules are not bylaws, and the difference has teeth

A board can make rules by its own resolution, without any owner vote. Rules have to be reasonable and consistent with the Act, the regulation and the bylaws, and they cannot restrict the uses of units. Where a rule conflicts with any of those, the rule loses.

The practical difference is the sanction. Monetary sanctions attach to bylaws. A corporation cannot fine you for breaching a rule. So when a package contains a long list of rules, the question is which of them are actually bylaws.

The minutes come one fiscal year at a time

The regulation frames minutes production by fiscal year, meaning approved minutes of general meetings where they exist, draft minutes where approved ones are not available and the meeting happened at least thirty days earlier, and approved board minutes. A buyer wanting several years asks for several years, because one request covers the year it names.

The records have to exist for at least seven years after they are created, so several years are available to ask for. Reserve fund reports and plans run twelve years and engineering reports are kept permanently. What a lawyer looks for in the minutes is continuity, since a gap in board minutes is a gap in the record of what the corporation was deciding.

A special levy can follow the unit

Alberta calls it a special levy and the vernacular calls it a special assessment. The board levies it by resolution and owners do not vote, with one exception, since a levy for a capital improvement needs a special resolution first. The resolution sets out the purpose, the total, how each unit's share is worked out, and when it is payable.

The part that reaches a buyer is the recovery provision. A contribution can be recovered from whoever owned the unit when the resolution passed and from whoever owned it when the action started, jointly and severally. A levy resolved before your closing can follow the unit to you, which is why we read the reserve fund plan, the budget, the engineering reports and the minutes together. The five terms an offer is built from covers where the condition that protects you sits.

Read the package before the condition comes off

The documents arrive as a stack and answer one question between them, which is what the building has agreed to pay for and what it has not yet worked out how to pay for.

Get a real estate lawyer through it while the condition is still alive. That is what the condition is for.