In December 2018, changes were announced to Alberta's Condominium Property Act and Condominium Property Regulation. The changes will come into effect July 1, 2019 and Jan 1, 2020.
As Alberta's leading property manager, we are here to help you understand how these changes effect your community. Below are some highlights of the new laws:
BYLAWS
(a) Appendix 1 Bylaws have been expanded and moved to Regulations.
(b) If previously governed by Appendix 1, now "by new regulation"
This impacts corporations that do not have bylaws and reffered to Appendix 1 bylaws for guidance and governance. Those bylaws will be repealed and are now going to be attached to the regulations, which are more comprehensive.
(c) Have 1 year to pass Ordinary Reolustion to bring Bylaws into conformity
(d) Does not apply to adding new Bylaws or changing non-conflicting Bylaws
RULES
(a) Board can make, amend or repease rules responding procedures
(b) Must be 'reasonable and consistent' with Act, regulation and Bylaws
(c) Must not restrict use of a unit.
For example, rules cannot rescript pets, cannabis use or dictate moving polcicies. Those are Bylaws, not rules.
(d) Owner and tenants must be informed at least 30 days before rules go into effect
Previosly, it was not required that tenants be included in this communication. As an ongoing theme througout the amendements, tenants are now to be included in communication regarding rule updates.
(e) Within 90 days of July 1, 2019, compliance with the Act required
If you have rules enforced already, you have 90 days from July 1, 2019 to go through the proper processes to inform your ownership about these rules. If you are revisitng your rules, and if your rules need some touch ups it is important that corporation attend to this before the deadline as otherwise the rules are going to be in no force or effect.
NOTICES
(a) Bylaws may provide for electronic voting by board
(b) Electronic voting by owners also permitted
(c) Bylaw infractions have specific requirements for notice
While notices were previously just sent to unit owners, notices now have to be sent to tenants. There is also a specified amount of time given to tenants or owners to respond.
Notices are now to be sent out and signed by the board. Property management companys are permitted to deliver noticed on behalf of the board but cannot be on that property management company's letterhead. Corporations can create their own letterhead and send notices on that.
ANNUAL GENERAL MEETINGS
(a) 60 day and 14 day 'save the date' notice and call for agenda items
Owners will be given 60 days notice and 14 days notice of the AGM and will be invited to bring items to discuss at the meeting.
(b) AGM Notice:
(i) Provide minutes of all Board meetings (not just post to the website)
(ii) Provide 14 days' notice
(iii) Other specified inclusions
It is anticipated that owners may being to the meeting agenda items that are not proper business conducted by the corporation at an AGM. For example, if an owner is unhappy with a fine given for somethign that happened in their unit, that is not appropriate business for an AGM. Many corporations may mitigate this by adding to your AGM items a vote on whehter or not to include proposed agenda items in the agenda.
(c) AGM Minutes:
(i) AGM minutes must be provided to all owners within 30 days.
Minutes will be a draft, as it cannot be approved until the followng AGM.
(ii) Filed Notice of Board Members within 30 days
(d) AGM Voting and Disclosure
Corporations will need to disclose the results of votes cast for those who ran for the board within 30 days.
PROXIES
(a) Restrictions set on who can hold a proxy
Proxies can not be given to your property manager, except to establish quorom.
(b) Where two or more proxies from same unit, only most recent is valid
(c) Most bein electronic or hard copy and contain specific details
(d) Rules and procedures may be added
VOTING
(a) Owner can vote for each unit owns
If an individual owns 10 units, they get 10 votes.
(b) Cannot vote if 60 days in arrears
This is changed from 30 days.
(c) Specifies counting of votes for each type of vote
The Act specifies between an ordinary resolution and a special resolution. Includes a complicated explanation on how you count if you have more than one owner, if they are joint tenants vs. tenants in common..... Before you have your AGM following July 1st, take a closer look at the procedures.
(d) Details procedures for written resolutions:
Ordinary reoslutions requires a show of hands. It is one vote per unit. If there are two owners, still only get one hand. For a poll vote, 50 percent of unit factors need to be present for an ordinary resolution to pass.
An ordinary resolution can overturn a board rule.
For a special resolution, 75 percent of all owners must be accept the resolution for it to pass. When sending out a special resolution to owners, the date votes have to be in must be included, as well as the date the votes will be counted, which needs to be with 14 days of the date the votes have to be in by.
Voting results of written resolutions must be disclosed to all owners within 30 days of votes being casted.
(e) Disclosure of voting results
Results only need to be presented in meeting minutes.
(f) Electronic voting
(g) Existing special resolution
You only get a year to pass a special resolution. For existing special resolutions, as of July 1st you have a year to pass it.
BUDGET
(a) Send to owners and martgagees at least 30 days prior to start of fiscal year
(b) Send revised budgets out as soon as possible
(c) Bylaw infractions have specific requirements for notice
The intent is that all owners need to have information on how fees are calculated at the start of the year, regardless of when the AGM is.
BORROWING
(a) Borrowing may require an ordinary resolution or a special resolution, if your Bylaws say so, if the sum of the loan and all oustadning loans during a fiscal year are more than 15% of the corporations revenue set out in the most recent financial statement or the maximum of borrowing as adopted in the most recent resolution authorized borrowing is exceeded.
This means you can have more than one borrowing resolution a year, however it cannot exceed a certain amount.
(b) Borrowing resolution must specify the maximum amount, in percentage or dollar value
CONTRIBUTIONS, SPECIAL LEVIES AND CAVEATS
(a) Assessments are now known as levies.
(b) Previously we only had Section 39 of the Act that governed everything in respect to levies and contributions. It has been expanded and there's a differentiation in the act that wasn't there before between a regular levy and a special levy.
(c) Mandates 'operating account' for payments not to be paid out of reserves
This previously wasn't mandated, however, most corporations have two accounts, one for reserve funds and for operating funds.
(e) Special Levy resolution must include specific details and notification requirements set out
Resolution must include: the purpose of the levy, total amount seeking to bring in, method of determining the share (ie. By unit factor), provide deadline for payment and whether it is in full or in installments.
(f) Can only issue a Special Levy for permitted purposes.
Permitted include: unexpected and urgent maintenance, repair or replacement, unexpected shortfalls in operating account, increase reserve fund and to satisfy judgements.
As soon as possible after the resolution, all owners must be informed of the special levy, and include in the notice again, the purpose for the levy, the total amount of the levy, the method of determining each units share of the levy, amount of each units share and the deadline for the payment, be it in full or in installments.
(g) If excess amount collected must put remainder in reserve
(h) Can add to caveat reasonable registration/discharge costs and legal costs
INSURANCE - EFFECTIVE JANUARY 1, 2020
(a) Defines standard unit corporations must identify for insuring
(b) Corporations can pass mylaw requiring owners to carry deductible insurance
(c) If included in standard unit description, not considered improvement .
(e) Corporations to insure units, fixtures and finishings, but not improvements, and only shell of non-residential units.
(f) Corporations responsible for overseeing repairs to items/areas it insures, while owners are responsible for other repairs
(g) Repairs to be made to “standard insurable unit” description, with exceptions
(h) In certain situations if owner fails to repair corporation may do and bill back
(i) Corporation may claim back deductible up to $50,000.00, with exceptions
SANCTIONS
(a) Must serve a ‘warning’ and only after deadline can sanction.
A sanction is a penalty, monetary or otherwise.
(b) If sanctioning tenant must provide notices to Owner
No longer sanctioning owner for the tenants behavior . The Act requires the notice be served to the person who failed to comply, this can be the tenant. If you are serving notice on a tenant, the owner is copied.
A warning must be given before sanctioning. The warning must include: the unit number, the name of the person subject to the sanction (if you know the name), the bylaw section being violated, the rule that is not being complied with, the date and time of non-compliance, any other relevant particulars, if it’s a monetary sanction, the maximum that might apply, a description of the corrective action or other action you require be taken and the deadline.
Act mandated three days required for a deadline, however, if your bylaw stipulates additional days, you must follow the days allotted in the bylaws, including when the notice is deemed to have been received. (ex. email is deemed to have been recieved after 24 hours, mail is deemed to be received after 7 days)
If the behaviour is not fixed, another letter must be sent which includes: amount of sanction, deadline and instructions for payment. If not monetary, give description of sanction and date and time it goes into effect and the date of the board resolution.
(c) Only Board members can impose sanctions or issue notices
For both warning and letter. No agent of the condo corporation has the ability to send it on their behalf.
(d) Can caveat for a fine only after writ of enforcement granted/obtained
(e) Maximums are set out,
Residential unit: maximum penalty of $200 for first offence, $500 for later offense. Up to a max of $2700 per infraction.
(f) Cannot sanction for violation of a rule
RENTAL DEPOSITS
(a) Maximums set out
Deposits are not to exceed the prescribed amount, for a lease that is greater than 6 months, the deposit is $250. For a lease less than 6 months, rental deposit is $1000.
(b) Deposit returns must include interest
(c) Must provide owners itemized list and purpose of deductions.
RESERVE FUND
(a) No longer reference “qualified person”, rather, “reserve fund study providers”
Act sets out specific requirements and qualifications a person must have in order provide a reserve fund study.
(b) Specific qualifications set out
(c) Parties who may have conflict disqualified
Owners, property managers, directors and officers are not able to conduct reserve fund studies.
(d) Time period extended from 25 to 30 years
(e) Methods for conducting reserve fund studies specified
Ex. Visual onsite inspection, interview board members and property managers.
(f) Additional disclosure requirements
DOCUMENTS PROVIDED BY CORPORATION
(a) Additional documents set out, and costs specified.
Approved package of board minutes, or draft and approved AGM minutes, a list of all rules and policies, list of board members with service address, list of vote counts, copy of any professional reports (excluding pertaining to legal proceedings)
Cost for documents is now $10 per section, including attachments.
(b) Retention periods specified.
TRANSFER OF COMMON PROPERTY
(a) Corporation is required to obtain consent
(b) Mechanisms to do it by Court Order
(c) Disposition of proceeds of sale set out
(d) Parking spaces for visitors or persons with disabilities addressed.