An important change is coming to Alberta condo law. The Alberta Government has introduced Bill 19 The Condominium Property Amendment Act, which aims to improve efficiency and reduce financial risk for condo corporations. Here are some of the major changes that have been announced and how they impact you.
Chargebacks
Typically in a condominium, if an owner damages common property, the bill for repairing that damage is charged back to condominium owners and like good responsible individuals, those who cause the damage pay to fix it.
In some cases, that process becomes thorny, and corporations spend time and money to try and recoup that cost through the court system. This is particularly the case with large bills for issues like floods, fires and other perils when the individual who caused the issue does not have insurance.
The new law will allow condominium corporations to charge the bill back to the unit owner in addition to any administrative costs, legal fees and other reasonable charges to the unit owner up to the maximum of the amount of the insurance deductible. The corporation does not need to make an insurance claim to do so. They can also add what’s called a caveat on title for these costs should they not be settled.
A caveat is essentially a lien on the owner’s property, so they cannot sell until their debt has been paid.
Here’s an example of how this could work. One owner leaves a tap running all night and it floods the suite below it. Inspectors determine the cause to be the unit owner where the water originated, and the bill for all the remediation comes to $10,000.
The deductible for the insurance is $25,000, so it makes more sense to not make an insurance claim in this case. The bill is therefore charged back to the unit owner. Under Bill-19, should they refuse to pay, the corporation can issue a caveat on the unit to ensure payment. This saves the board having to spend time and money on litigation through the courts to recover the amount.
Simplifying Voting
In the current condo property act, voting is laid out by unit factors. What this means is your vote is equivalent to the amount of the complex that you own. Those with bigger units have more of what’s called the pro-rata share of the complex, in other words, more votes based on their share of the whole.
This is also how condo fees are calculated. Typically, this is not an issue as it works out in the end but on contentious issues where the vote is very tight, it can be both time-consuming and difficult to calculate.
Instead, this new act would allow corporations to decide on alternative voting methods such as one vote per unit in their bylaws, and allow for this to be the norm in the complex.
In our experience, this issue rarely arises as a problem. It typically only comes up in those issues where a close vote is causing conflict. That being said, it’s beneficial to have legislation that offers this style of voting as an option.
What does it mean for you?
The voting changes are unlikely to impact you, but the chargeback change may. For unit owners, this is yet another reminder of the importance of condo insurance to cover your contents, liability in case of an issue like this, as well as any betterments and improvements that you have made above and beyond the standard insurable unit description, the way the unit was designed at the base-level.
It can be a costly exercise for condo corporations to try and recover these costs, and can result in increased condo fees. This law, if passed, would give boards more power to recover costs without having to pass on the costs to the entire ownership.
