Understanding Your Condo Documents

Annual General Meeting (AGM)

The Annual General Meeting (AGM) is an important yearly meeting where owners receive updates about the business and operation of the condominium corporation. The meeting may include discussion of financial matters, completed or upcoming projects, reserve fund planning, insurance, and other matters affecting the corporation.

The AGM is also generally when owners elect members of the Board of Directors, who are responsible for making decisions and overseeing the affairs of the corporation in accordance with the Condominium Property Act, Condominium Property Regulation and the corporation's registered bylaws.

Owners who are unable to attend may be able to appoint a proxy to participate or vote on their behalf, subject to the applicable legislation, bylaws and proxy requirements.

AGM Minutes are valuable during a document review because they can provide insight into significant matters discussed with owners and concerns raised within the condominium community.

Bare Land Condominium

In a Bare Land Condominium, the boundaries of the individual units are defined by reference to survey monuments placed in accordance with Alberta surveying requirements.

Unlike a conventional condominium, where a unit may be defined by the walls, floors and ceilings of a building, a bare land condominium unit is essentially a parcel of land. Buildings and other improvements may be constructed within the boundaries of the individual unit.

Understanding the unit boundaries is particularly important because they can affect responsibility for the repair and maintenance of buildings, landscaping and other property within the development. The registered condominium plan and bylaws should be reviewed to understand these responsibilities.

Board of Directors Meeting Minutes

Board Meeting Minutes provide a valuable look at the ongoing operation of the condominium corporation and the matters currently being considered by the Board.

Minutes may contain information about:

• Maintenance and repairs

• Water leaks or building concerns

• Insurance claims

• Legal matters

• Contractor issues

• Major projects

• Reserve fund expenditures

• Condo fee increases

• Special assessments

• Owner concerns and recurring issues

Reviewing several sets of minutes allows us to identify issues that may continue from one meeting to another and provides context that may not be apparent from financial statements or other documents alone.

For a CDIC review, we request the most recent 6–12 sets of available Board Meeting Minutes. Operating Budget & Fee Schedule

The Operating Budget outlines the condominium corporation's anticipated revenues and expenses for its fiscal year.

Typical expenses may include property management, insurance, utilities, landscaping, snow removal, cleaning, repairs and maintenance, professional services and contributions to the reserve fund.

The budget can help us understand how the corporation plans to meet its current financial obligations and whether condominium fees appear sufficient to support its operations.

The Fee Schedule identifies the condominium contributions applicable to the units and allows the buyer to confirm the fees associated with the unit they are purchasing.

Registered By Laws

The registered bylaws establish many of the rules governing the condominium corporation and the use and enjoyment of the property.

Bylaws may address matters such as:

• Pets

• Parking

• Renovations

• Rental or tenancy requirements

• Use of common property

• Maintenance responsibilities

• Insurance responsibilities

• Conduct within the property

• Governance and voting procedures

  
  

Registered bylaws are enforceable by the condominium corporation, subject to the Condominium Property Act, Condominium Property Regulation and other applicable law.

Because bylaws can affect how an owner uses their unit and what they may be responsible for maintaining or repairing, they are an important part of every condominium document review. Certificate of Insurance

The condominium corporation's Certificate of Insurance provides important information about the insurance maintained by the corporation, including the types and amounts of coverage and applicable deductibles.

Deductibles are particularly important. Depending on the type of loss, the circumstances surrounding it and the applicable legislation, bylaws and insurance policies, an owner could potentially have financial responsibility relating to an insurance deductible.

The corporation's insurance does not replace the need for an owner's own condominium unit insurance.

Buyers should speak with their insurance provider about appropriate personal coverage, including coverage for their unit and belongings, improvements and betterments, personal liability and condominium corporation deductibles where applicable.

During a CDIC review, we also look at other available documents for information about insurance claims, recurring losses, changes in coverage or significant insurance-related costs.

Condominium Plan

The Condominium Plan is a registered Land Titles document that identifies the condominium property, individual units, common property and applicable unit factors.

Depending on the type of condominium, the plan can also provide information about:

• Unit boundaries

• Approximate unit or land areas

• Parking areas

• Common property

• Exclusive-use areas

• Unit numbers and legal descriptions

• Surveyor's notes

The plan is particularly important when determining where an individual unit ends and common property begins.

Parking arrangements should also be carefully reviewed, as a parking stall may be separately titled, part of a unit, common property, assigned for exclusive use, or subject to another arrangement. Condominium Additional Plan Sheet

The Condominium Additional Information Sheet, commonly referred to as the CAD Sheet, is associated with the registered condominium plan and provides information about registrations affecting the condominium corporation.

Depending on the corporation, the sheet may contain registrations relating to matters such as:

• Registered bylaws and amendments

• Changes affecting the condominium plan

• Notices relating to the corporation

• Board information

• Easements, caveats or other registered interests

Because registrations can change over time, the current CAD Sheet can provide information that may not appear on the original condominium plan.

Condominium Fees Condominium fees, also known as condominium contributions, provide the funds necessary for the corporation to operate, maintain the property and meet its financial obligations.

Fees may contribute toward expenses such as:

• Insurance

• Utilities

• Property management

• Landscaping and snow removal

• Repairs and maintenance

• Professional services

• Reserve fund contributions

Contributions are commonly allocated according to the unit factors assigned to each unit; however, the registered bylaws may establish another permitted method of allocating certain contributions.

An increase in condominium fees is not automatically a red flag. Increases may be required to keep pace with inflation, insurance, utilities, maintenance costs or appropriate reserve fund contributions.

The important question is why the fees are increasing and whether the corporation appears to be appropriately planning for its current and future financial obligations. Financial Statements

Financial Statements

Financial statements provide important information about the financial position and activities of the condominium corporation.

Current financial information, including an available balance sheet or other interim financial reporting, can help identify the corporation's current assets, liabilities, operating position and reserve fund balance.

The corporation's annual financial statements provide a broader view of its financial activity during the fiscal year. Depending on the information provided, they may also contain notes relating to significant expenditures, commitments, legal matters or other financial issues.

During a CDIC review, financial information is considered alongside the budget, Reserve Fund Study, meeting minutes and disclosure information. Looking at these documents together provides much more context than relying on a single balance or financial statement.

Management Company & Management Agreement

Many condominium corporations retain a professional condominium management company to assist the Board with the day-to-day administration of the corporation.

Depending on the management agreement, responsibilities may include:

• Financial administration

• Collection of condominium fees

• Preparing financial reports

• Coordinating repairs and maintenance

• Obtaining contractor quotes

• Maintaining corporate records

• Communicating with owners

• Assisting with Board and owner meetings

The Management Agreement outlines the services the management company has been retained to provide, the applicable fees, term of the agreement and other responsibilities of the parties.

The Board of Directors remains responsible for governing the condominium corporation, even where a professional management company has been retained.

Post Tension Cable Systems

Post-tension cables are structural cables installed within concrete and placed under tension to strengthen the concrete structure.

Post-tension construction can be found in parkades, residential towers and other buildings. Because moisture and other conditions can contribute to deterioration of post-tension systems, appropriate inspection, maintenance and repair are important.

Where a condominium contains a post-tension system, CDIC reviews available post-tension or engineering reports to identify information relating to the condition of the system, recommended monitoring, repairs and maintenance.

CDIC does not provide engineering opinions or determine the structural safety of a building. Where technical or structural concerns are identified, further advice from an appropriately qualified professional may be recommended.

Reserve Fund Study & Plan

The condominium corporation's Reserve Fund is intended to provide funding for major repairs and replacement of depreciating property for which the corporation is responsible.

A Reserve Fund Study provides a long-term assessment and funding roadmap. It identifies major components, estimates their remaining useful life, anticipates future repair or replacement costs and provides recommendations for funding those future expenditures.

Depending on the property, the study may address items such as:

• Roofing

• Windows and exterior doors

• Building envelope components

• Elevators

• Mechanical systems

• Parkades

• Roadways

• Fencing

• Exterior finishes

• Other major components

  
  

The study can also provide useful information about which building components have been included as the corporation's responsibility. This may help clarify whether items such as windows, exterior doors or other elements are anticipated to be repaired or replaced by the corporation. The condominium plan and bylaws should also be considered when determining responsibility.

The Board uses the Reserve Fund Study to develop its Reserve Fund Plan and determine how the corporation intends to fund anticipated expenditures.

During a document review, we don't simply look at the amount currently sitting in the reserve fund. We consider what work is anticipated, when it is expected, what it may cost and whether the corporation appears to be financially preparing for it.

We also compare the study and plan with budgets, financial statements and meeting minutes to identify whether projects have been completed, changed, delayed or discussed further.

Unit Factors

Every condominium unit is assigned a unit factor, which represents that unit's proportionate share in the condominium corporation. The total unit factors for the condominium corporation equal 10,000.

Unit factors are shown on the registered Condominium Plan.

They can be relevant when determining:

• An owner's proportionate interest in common property

• Voting rights

• Condominium contributions

• Responsibility for certain special assessments or other amounts

However, the Condominium Property Act and the corporation's registered bylaws must also be reviewed, as they can affect how voting rights or financial contributions are determined in particular circumstances.

Unit factors should therefore be considered together with the registered bylaws rather than viewed on their own.