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Condominium Terms

Condominium Terms

This is not an exhaustive list of condominium terms, but it’s a good place to start if you are just learning about the world of condos. If you have questions once you go through it be sure to contact Richard & Liz Bergeron @ www.richardbergeron.com.

Annual General Meeting

The Annual General Meeting (AGM) is the time during the year that unit Owners are brought up-to-date in person regarding the business of the Corporation. At this meeting the owners in attendance nominate and vote for who they want to form the next condominium association board. Being on the board is a great opportunity to really know your building and your investment. The Owners who are present elect the board for the term. In Alberta the Condominium Property ACT and our legal system support (with exceptions) the decisions made by The Board. You can give your proxy to someone else if you cant show up for this important meeting. They can vote at the meeting for you.

Bare Land Condominium

The boundaries of the units in a Bare Land Condominium Plan are determined by references to boundaries governed by monuments. These are placed pursuant to the provisions of the Surveys Act. The plan allocates the condominium into two-dimensional lots. There is no reference to buildings or structures that appear on those lots.

Board of Directors Minutes

These are the approved minutes of The Board of Directors meetings. Boards do not necessarily meet every month. The buyer should get a years worth of minutes when they are looking to purchase a suite. These will provide the buyer the insight into how much maintenance work is being conducted, is it being done in a timely fashion. Also 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 the sets of the minutes.

Budget

The operating budget for a condominium corporation shows what funds are expected to be spent over a fiscal year. The various categories laid out in the budget, such as landscaping, snow removal, etc. will be itemized. The budget is sent out to each Owner 15 to 30 days before the end of the fiscal year. Included in this is either a fee schedule detailing the expected monthly fees for each unit or a letter that states what the fees are for that unit.

By-Laws

The bylaws for the Corporation are given power by the Condominium Property Act of Alberta. Any bylaw registered for the Corporation is enforceable as law. Registered Bylaws apply to all occupants of the Units  including Owners and tenants and guests. The by-laws provide the rules and regulations basis on how life and the business of the corporation is conducted in the complex. Only the set of by-laws registered can legally be enforced, and these are the ones that must be provided to the Owner along with any proposed by-laws the Corporation is trying to pass. Any change in bylaws requires 75% of the unit factor ownership.

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. The Owner will want to see that the Corporation has liability insurance and directors & officers’ liability insurance. If a loss occurs and the Corporation does not have enough insurance in place than the Corporation must make up the difference (the Corporation consists of all the Owners). The deductibles are very important as that will 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.

Condominium Plan

The Condominium Plan, which is registered at Alberta Land Titles, shows the overall site and all of 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 Bylaws: 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.

Fees

The unit fees are generally calculated on the unit factor assigned to that unit, or if the by-laws permit, on a fair and equitable basis. Furthermore 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. Also included in the fee can be a contribution to the reserve fund.

Financial Statements

The audited financial statements will provide the Owner with the overall financial transactions of that corporation over the stated fiscal year. Because the Owner should have the most recent set, and if possible the previous year set as well. Depending on the detail provided by the auditor, hence the Owner will learn what capital work has be 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.

Most property management companies are able to produce a balance sheet that will reveal the current status of the Condominium Corporation’s finances. It must be a balance sheet for year to date, not a monthly one. Hence the year to date balance sheet will show the current amount in their operating account, the current amount in their Reserve Fund, and outstanding liabilities. Even a letter stating the amount in the Reserve Fund can be useful.

 

Management Company

The Board of Directors contracts with a Property Management Company to handle certain aspects of the operations of the condominium corporation. 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. Normally they have the management company handle all the day to day activities, including financial, administrative and maintenance, through an offsite Property Manager. The management company can also be 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, simply stated, a stressed cable form of structure. The cables are imbedded in poured concrete slabs. These cables are prone to deterioration when exposed to water. It is not uncommon to PTC problems. It is not uncommon to have a building with and PTC structure system. As long as 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. What are the advantages of a PTC building structure? More floors, as slabs are thinner. Wider span area, more usable floor space. How safe is a post tension building? Also as safe as any other building as long as the post tension slabs are being maintained repaired and monitored.

Reserve Fund Study

. A Reserve Fund study gives The Board of Directors a guideline to follow which will 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. Hence a Reserve Fund study customizes the Corporation’s financial projections to meet the needs of the individual site.The Reserve Fund account is a fund established for the replacement of capital items on the Common Property

Unit Factors

Unit factors and the Unit size in square meters (or square foot on older plans) are designated on the plan. All condominium corporations in Alberta are based on a total of 10,000 unit factors. First of all In Alberta, the registered bylaws can state a method of determining the amount of contribution based on a formula other than the unit factors because 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 bylaws state otherwise. .

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