Condo documents required for sale or purchase
The documents required to sell and purchase a condo in Alberta are itemized in the listing agreement between the seller and the real estate brokerage, and then again in the purchase contract between the buyer and seller.
The seller must provide the following documents:
1) An information statement provided by the condominium corporation under section 20.52(1)(a) of the Condominium Property Regulation (Alberta);
Section 20.52(1) Subject to subsection (2), the following information and documents are prescribed for the purposes of section 44 of the Act:
(a) an information statement that includes all of the following:
(i) the particulars of
(A) any action commenced against the corporation in respect of which the corporation has been served, including the amount claimed against the corporation,
(B) any unsatisfied judgment or order for which the corporation is liable, and
(C) any written demand made on the corporation for an amount in excess of $5000 that, if not met, may result in an action being brought against the corporation;
(ii) a statement setting out the amount of the capital replacement reserve fund;
(iii) a statement setting out the amount of the contributions and the basis on which that amount was determined;
(iv) a statement setting out any structural deficiencies that the corporation has knowledge of at the time of the request in any of the buildings that are included on the condominium plan;
(v) loan disclosure statements for current loans, including documents showing the starting balance, current balance, interest rate, monthly payment, purpose of the loan, amortization period and default information, if applicable;
An information statement, or a disclosure statement, is obtained from the property management company, and will likely take a minimum of 3 days. The cost is borne by the seller, and typically is $150 plus any handling fees if the document has to be ordered on a third party website.
2) The particulars or a copy of any subsisting:
a) Management agreement; and
b) Recreational agreement;
The management agreement is the contract between the property management company and the condo board, and the name on the agreement should match the name on the Condominium Additional Plan Sheet of the corporation. If a building is self-managed, they will not have this document as it means that owners who are also board members are managing the complex directly.
A recreational agreement would pertain to complexes that have a recreational facility on site, such as a swimming pool or gym, and owners from other complexes are allowed to use the facilities.
3) The particulars respecting any post tensioned cables that are located anywhere on or within the property that is included in the condominium plan (if not already addressed in the information statement);
Post tension cables are high-strength steel cables that are embedded in concrete during construction. These cables are then tensioned after the concrete has hardened, which places the concrete under compression and enhances its strength. Post tension cables are commonly used in high-rise buildings and condos. They require additional maintenance and engineering reports, so it is very important for a buyer to do their due diligence if a building has post tension cables.
Copies of the following, to the extent that they exist:
a) The most recent budget of the condominium corporation;
The budget will set out the income and expenses required to run the condo corporation for the next fiscal year. From the budget, the amount for condo fees are set.
b) The most recent annual financial statements of the condominium corporation;
Annual financial statements can either be audited (the audit conducted by a third party) or unaudited (the board or management company finalizes the year end in a set of financial statements), but every condo corp should produce a set of year end financial statements.
c) The bylaws of the condominium corporation as registered at the Land Titles Office, or if the statutory bylaws apply, a copy of the statutory bylaws;
The bylaws are the rules and regulations for the condo complex. They will include rules for how meetings are run (both board and annual) but more importantly for new owners – they will include restrictions for things like pets, air conditioners, renovations, even the colour of window treatments that face the outside.
d) Approved minutes of general meetings of the condominium corporation, held within the last 12 months;
e) If available, draft minutes of the latest general meeting of the condominium corporation if approved minutes are not available;
f) Approved minutes of condominium corporation board meetings held within the last 12 months;
A condo corp must hold an annual general meeting after the fiscal year end is complete. There are rules surrounding what will be discussed at the meeting, and it is a time for owners to ask the board questions relating to the building or complex. Some condo corps will hold monthly meetings for board members, or they may review and approve owner requests by email, and not hold any meetings.
g) Any separate lease agreement or other exclusive possession agreement benefitting the seller of the property, including agreements allowing the seller to use a parking stall or a storage unit;
Parking stalls and storage units may be titled, assigned or leased. If they are leased, there will be a separate agreement outlining the details of the lease. You can read more about the different types of parking options HERE.
h) A statement from the condominium corporation setting out the criteria used to determine unit factor allocation (if not already addressed in the information statement);
A condo corporation uses unit factors to determine the portion of ownership in the condo complex or building. They are much like shares in a company. Each condo corporation has 10,000 unit factors and each owner has a certain amount of them, generally depending on the size of their unit in relation to others (but there are exceptions to this!)
4) Any consolidation of the rules (policies/procedures) made by the condominium corporation which may be available under section 32.1 of the Act;
A condo corp can create additional rules beyond the bylaws for the condo corp. They are often more detail oriented and on things like specifications for flooring which may change over time.
5) Copies of reports prepared for the condominium corporation by professionals since thee date of the most recent reserve fund study, including professional engineers but excluding reports requested and obtained by the corporation’s legal counsel in relation to actual or contemplated litigation;
These reports will include engineering reports for buildings with post tension cables but will also include reports if ordered by the board in the event there is a major repair coming up in the complex.
6) A current insurance certificate for insurance held by the condominium corporation;
Every condo corp must have insurance for common areas and will cover things like fire or water leakage and of course general liability. It is important that you still have your own insurance to cover your unit and your personal property within that unit. If you would like to read additional tips for insurance you can read more HERE.
7) The current standard insurable unit description for the residential units or classes of residential units;
The Standard insurable unit description (SIUD) outlines the finishes of the condo from when it was built, so in the event of an insurance claim, the responsibility of the condo corp is limited to the items on the SIUD. Anything that has been updated since then is covered by your own personal insurance. So if the condo came with carpet and you upgrade to very expensive hardwood, the condo corp covers the cost of the carpet, then your insurance would have to kick in to cover the rest.
8) The current reserve fund plan, the current reserve fund report, and annuyal reports prepared since the date of the current reserve fund plan; and
The Reserve fund report and study are a forecast of capital expenditures the condo corp can expect for the next 25 years. It will look at the roof, heating systems, windows, parkade costs – anything that is owned by the condo corp. It is a very important document to review, because if a board has not been budgeting for future costs adequately, or there is an unexpected significant cost coming up, it will be in this report.
This is where you may want to add in most recent month’s financials, or if there is something you want to see that pertains to a specific building.
A buyer will get a significant amount of documents that they must review prior to proceeding with a purchase. The onus is on the buyer to do their own due diligence when making the purchase. That said there is help available! There are Condo Document Review Specialists who can be hired by the buyer to review the documents and provide an opinion.
The above information is provided as general information and is not considered legal advice. Please consult your lawyer if you have any questions or concerns about this information.