A number of the amendments to the Condominium Property Act (Alberta) (the “Act”) that were contained in the Condominium Property Amendment Act, 2014 (the “Amendment Act”) came into force on January 1, 2018, with a second set scheduled to come into force on April 1, 2018. The changes contained in the Amendment Act include a notable increase in the obligations that the Act imposes on condominium developers operating in Alberta.
Amendments Already in Force - Effective as of January 1, 2018
The first set of amendments increased the range and power of enforcement measures available against developers for violations of the Act, including larger fines for offences, and broad authority for the Director of Condominiums to conduct inspections of a developer’s business records, and issue orders requiring compliance and administrative penalties.
Additionally, the first set of amendments contains new requirements relating to the transition of ownership and control of a condominium development from the developer to the purchasers of units, which include the following:
- a developer must appoint an interim board of directors for the condo corporation within 30 days of the registration of a condominium plan;
- a general meeting of a condominium corporation must be held within 90 days of the date that title to units representing 50% of the overall total unit factors have been transferred to purchasers (the “turnover meeting”);
- a developer must provide increased disclosure of all materials related to the condominium corporation at the turnover meeting; and
- the developer is obligated to pay condo unit contributions for each condominium unit in the development that it owns on the same basis as other owners despite any condominium corporation bylaw to the contrary.
Upcoming Amendments - in Force starting April 1, 2018
The second set of amendments to the Act, which come into force on April 1, 2018, increase the burden and scope of disclosure required of developers to purchasers of pre-construction condominium units and units created by a condominium conversion of existing property. New disclosure obligations include the following:
- a table of contents clearly listing all of the information and documents provided together with the purchase agreement itself must be provided to each purchaser;
- an occupancy date statement that outlines a fixed date, or ranges of dates, by which the purchaser will be able to occupy the unit;
- a revised version of the prescribed statement relating to a purchaser’s ten day “cooling off period” (being the period of time during which a purchaser may rescind the purchase agreement without liability) must be included on the first page of every purchase agreement;
- a proposed condominium corporation budget to calculate specific unit contributions;
- a list of fees, rents or charges, that the condominium corporation will be required to pay the developer or a third party, as well as any other fees the developer will charge the purchaser, including occupancy fees or fees associated with development;
- if the unit being sold is a conversion unit, a building assessment report and a reserve fund report must be prepared and disclosed in the appropriate form; and
- if the development is not substantially complete (and not a bare land unit), the floorplan of the unit and details of the materials used to finish the unit.
As was the case prior to the coming into force of the Amendment Act, a purchaser’s ten day statutory cooling off period does not begin until all required information and disclosures are provided to a purchaser. As a result, if a developer fails to provide any of the required disclosure materials, a purchaser has the ability to rescind the purchase agreement at any time. If a purchaser cancels a purchase agreement during the cooling off period or pursuant to a purchaser’s condition, a full refund must be provided within 15 days of the purchaser delivering a written cancellation notice to the developer.
The new requirement to include an occupancy date statement with the purchase agreement is significant. After April 1, 2018, all purchase agreements signed for new construction or newly converted condo units must set out or be accompanied by the anticipated date or range of dates when the purchaser can take possession of the unit. The developer is then bound to deliver the unit not later than 30 days after the final date disclosed unless there is a legitimate cause for delay, or otherwise by mutual agreement of the parties. Legitimate causes for delay include circumstances outside the developer’s control such as fire, flood or vandalism. An extension of the final occupancy date for reason other than a legitimate cause renews the cancellation rights of the purchaser for a period of 10 days after notice of the extension is provided by the developer.
The changes contained in the Amendment Act represent a significant shift in the legislative framework governing the obligations of condominium developers in Alberta. In light of the changes, developers operating in Alberta should confirm that their business practices, purchase agreements and supporting presale disclosure materials are consistent with the Act.
Devin is a partner based in our Calgary office and has a practice focused on commercial transactions and real estate law, including purchase/sale transactions, financing, corporate matters, condominium work, commercial and ...
Maxwell practices real estate law in British Columbia and Alberta with a focus on commercial leasing, acquisition and mixed-use development.
Maxwell has an extensive commercial leasing practice which is focused on ...
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