Here are some important terms you may here when you start looking into buying a condominium.
Annual General Meeting The Annual General Meeting (AGM) is the one time within the year that Owners are brought up-to-date with the business of the Corporation. It is also the time when Owners direct who they want making the business decisions for the Corporation during the next year by electing The Board of Directors. The Owners elect this board. In Alberta the legal system and the Condominium Property ACR, RSA 2000 support the decisions made by The Board. If you are unable to attend this important meeting, you can give your proxy to another person who will vote on your behalf at the meeting.
Bare Land Condominium In a Bare Land Condominium Plan, the boundaries of the units are determined by references to boundaries governed by monuments placed pursuant to the provisions of the Surveys Act. The units are two-dimensional lots of dirt, and typically there is no defining of the buildings or structures built on the land.
Board of Directors Meeting Minutes These are the minutes of The Board of Directors monthly meetings. The buyer should get at least three or four sets of the most recent available. These will provide the buyer the insight into how much maintenance work is being conducted, and what issues The Board is currently dealing with. If the Condominium Corporation is engaged in a lawsuit or a difficult maintenance project, there will be a mention of that in many sets of the minutes. Operating Budget & Fee Schedule The Operating Budget for a condominium corporation shows what funds are expected to be spent over a fiscal year in the various categories laid out in the budget, such as landscaping, snow removal, etc. The budget is sent out to each Owner 15 to 30 days before the end of the fiscal year and included in this is either a fee schedule detailing the expected monthly fees for each unit or a letter that states the fees for that unit.
Registered By Laws The By Laws for the Corporation are given power by the Condominium Property Act, RSA 2020 of Alberta. Any By Law registered with the Corporation is enforceable as law. Registered By Laws apply to all occupants of the Units (Owners and tenants).
The By Laws provide the rules and regulations basis on how life is conducted in the complex. Only registered By Laws can be legally enforced and must be provided to the Owner along with any proposed By Laws the Corporation is trying to pass.
Certificate of Insurance The buyer should receive a copy of The Current Owner’s Certificate of Insurance, which will show how much the property is insured for, and what the deductibles are. If a loss occurs and the Corporation does not have enough insurance in place, then the Corporation must make up the difference (the Corporation consists of all the Owners). The deductibles are most important as they show the Owner how much the Corporation must pay before the insurance kicks in. This also shows the Owner how much they would be responsible for if a repair is deemed to be the fault of the Owner and the Owner is required to pay the damages. The Owner will want to see that the Corporation has liability insurance and directors’ & officers’ liability insurance.
Condominium Plan The Condominium Plan, which is registered at Land Titles, shows the overall site and all the units and their boundaries. It gives you the unit factor chart with the legal number of all the units. It provides the basis for determining the unit factor, gives you the approximate floor area or land area (square footage) of the units, describes where the boundaries are in the surveyor’s notes, and reveals whether parking stalls are titled, delineated (may be leased to the Owner) or common property (stalls maybe assigned). Condominium Additional Plan Sheet The Condominium Additional Plan Sheet (also referred to as a CAD or CS) contains any registrations against the condominium plan such as: charges against the Corporation; caveats; easements; redivisions; the registration date for the By Laws; amendments to the plan; and change of The Board of Directors. Information can be registered on this document through the South Alberta Land Titles Office.
NOTE: According to the Condominium Property ACT, The Board is to be registered on an annual basis within 30 days from the conclusion of the annual general meeting.
Condominium Fees The Condominium Fees are calculated on the unit factor assigned to that unit, or if the By Laws permit, on a fair and equitable basis. The condominium fees or contributions are necessary and are the means for the corporation to conduct repairs and maintenance and pay the corporation’s obligations. Financial Statements Most property management companies can produce a Balance Sheet revealing the current status of the Condominium Corporation’s finances. There must be a year-to-date balance sheet showing the current amount in their operating account, the current amount in their Reserve Fund, and outstanding liabilities. Should a year-to-date balance sheet not be available, a letter stating the amount in the Reserve Fund can prove useful.
The Audited Financial Statements provide the Owner with the overall financial transactions of the Corporation over the stated fiscal year. The Owner should have the most recent set, and if possible, the previous year’s set as well. Depending on the detail provided by the auditor, the Owner will learn what capital work has been done over the past year, and in the notes, the Owner may gain some additional information, such as whether the Corporation has been or is engaged in a lawsuit.
Management Company The Board of Directors contracts with a Property Management Company to handle certain aspects of the operations of the condominium corporation. Normally they have the management company handle all the day to day activities, including financial, administrative and maintenance, through an offsite Property Manager. The contract details how the arrangement has been set up, including if the Property Manager attends every meeting and if there is an additional charge for meetings beyond a certain number. The management company is also given the authority in their contract to charge a fee for the reproduction of any of the corporation’s documents for a potential purchaser of a unit.
Post Tension Post Tension Cables are a stressed cable form of structure. The cables are imbedded in poured concrete slabs. It is not uncommon to have a building with a PTC structure system. These cables are prone to deterioration when exposed to water, however, if the PTC is being maintained and monitored there is no greater safety risk to living in the building with PTC than any other form of structure. Some advantages of a PTC building structure are more floors, as slabs are thinner, wider span area, more usable floor space. PTC building structures are just as safe as any other building provided that the post tension slabs are being regularly maintained, repaired and monitored.
Reserve Fund Study & Plan The Reserve Fund account is a fund established for the replacement of capital items on the Common Property. A Reserve Fund Study gives The Board of Directors a guideline to follow, to minimize the risk of future special assessments in order to repair or replace capital items such as the roof, building envelope, fencing, roadways, parking areas, etc. A Reserve Fund study customizes the Corporation’s financial projections to meet the needs of the individual site. Unit Factors Unit factors and the Unit size in square meters are designated on the plan. A condominium corporation is based on a total of 10,000-unit factors. The unit factor assigned to the individual unit represents the Owners undivided interest share (Ownership) of the common property of the Condominium Corporation. The unit factor determines the Owners voting rights, as well as the portion of the operating budget or any special assessment Owners are required to contribute, unless By Laws state otherwise. In Alberta, the registered By Laws can state a method of determining the amount of contribution based on a formula other than the unit factors.