The low-down on condos in Alberta

CREB®Now sits down with Amelia Martin, Centre for Public Legal Education Alberta

Apartment-style condos often represent an entry point for homeownership to many Calgarians. As such, many of these first-time buyers will have questions before making one of the most important buying decisions in their life.

CREB®Now recently sat down with Amelia Martin, executive director for the Centre for Public Legal Education Alberta, to get answers on everything from how to review a condo board's documents to knowing your rights as an investor.

CREB®Now: ?CPLEA recently unveiled a new resource (condolawalberta.ca) to help Albertans navigate through the buying and selling process. What are some of the common questions and concerns that this resource hopes to address?

Martin: Condo Law for Albertans (www.condolawalberta.ca) provides plain-language legal information for Albertans who are thinking about buying a condo, currently living in one or considering renting or selling their condo. Some of the common questions addressed on the website include:

• What should buyers think about in deciding whether a condo is right for them?

• What documents should buyers review before they purchase a condo (including what to look for in those documents)?

• What happens if owners don't follow their condo's bylaws?

• What is the difference between the reserve fund, operating budget and special assessment? What do condo contributions go toward?

• What rules apply to owners who rent out their condos?

Phase Two of Condo Law for Albertans is currently in development and will focus providing plain-language legal information for condo board members. Condo Law for Albertans is generously funded by the Alberta Real Estate Foundation.

CREB®Now: ?Condos often represent the entry point for many first-time buyers. What are the most important questions those soon-to-be homeowners should ask themselves before signing on the dotted line?

Martin: Buyers need to consider whether the condominium lifestyle fits their personal lifestyle. Condominium living is different from traditional home ownership because it involves shared ownership of common property. Shared ownership means there are more rules in place regarding how the property is used, maintained, renovated, rented and sold. Some of these rules are law (for example, certain requirements for renting a condo), but most are included in the condo's bylaws. Every condominium has its own unique set of bylaws that will address everything from pets to parking to what owners can and cannot place on their balconies or patios. Before buying a condo, buyers need to think carefully about whether these rules will enhance or hinder their lifestyle. For a complete list of other factors to consider, buyers can visit "Is a Condo Right for You?" on our website.

CREB®Now: ?When it comes to taking a closer look at a condo board, what should a would-be buyer pay attention to?

Martin: A proactive, fiscally responsible condo board is vitally important. A high-functioning condo board will ensure the condo is financially healthy, well-maintained and attractive to buyers. It is important for buyers to assess how the condo corporation has been run by the condo board before signing on the dotted line. Some steps that buyers can take to review the functionality of the condo board include:

• Requesting and reviewing the condo corporation's documents;

• Reviewing the condo's financial documents to determine if there have been any recent financial management issues;

• Reviewing condo board meeting minutes and newsletters to determine how the condo board communicates with owners and elicits feedback; and,

• Determining if there are any pending legal actions or claims against the condo corporation (or any recently settled actions).

It is always advisable for buyers to hire professionals like real estate lawyers and agents to help assess the condo's overall health. For more information on what documents to request and review, buyers can visit "Collecting & Reviewing Documents" on our website.

CREB®Now: ?Some investors might be looking at condos as an investment opportunity. What should they know before they rent their space out?

Martin: Anyone who is considering renting out their condo needs to review their legal responsibilities under both the Condominium Property Act (CPA) and the Residential Tenancies Act (RTA). Under the CPA, owners looking to rent their condos are required to give certain information to the condo board, including the amount of rent being charged and name of the tenant. Condo boards have the right to ask owners for security deposits and can evict tenants who don't follow bylaws.

It is equally important for owners to understand their rights and responsibilities under the RTA, which outlines the rights and responsibilities of landlords and tenants in Alberta. Failing to do so could have serious consequences for owners including fines or legal actions. A complete breakdown of the rules under the CPA can be found on our website under "Renting Your Condo." CPLEA also has a comprehensive collection of RTA resources for landlords available for free on our website Laws for Landlords and Tenants in Alberta.

CREB®Now: ?What are some other common bylaws buyers should be aware of before purchasing a condo?

Martin: Every condominium has its own unique set of bylaws. Buyers need to review their potential condo's bylaws before they sign on the dotted line. Bylaws are difficult to change and owners can face serious consequences for failing to follow bylaws, so buyers must be comfortable with the bylaws before deciding to buy. Condo bylaws may address the following matters:

• Pets: if they're allowed, how many and types, whether board approval is needed.

• Age restrictions: if there is a minimum age to live in the building, whether children are allowed.

• Parking: types of vehicles that can be parked in complex, visitor parking rules.

• Esthetic restrictions: colour of window coverings, whether planters are allowed on balconies.

• Condo governance: election of board members, meeting schedule, voting procedures, bylaw amendments and enforcement.

CREB®Now: ?How have home warranty rules in the new condo sector impacted buyers?

Martin: As of Feb. 1, 2014, developers are required to provide home warranty coverage for all new condos built in Alberta. Warranty coverage must include:

• Labour and materials for one year (flooring, paint, trim);

• Defects in labour and materials related to heating, plumbing, and electrical systems for two years;

• Building envelope protection for five years with option for buyer to purchase additional coverage; and

• Major structural components (frame and foundation) for 10 years;

Buyers purchasing a resale condo built as of February 1, 2014 can access warranty information about the property online through the Public Registry.

CREB®Now: ?What are some of the most common mistakes condo owners make when buying or selling a property?

Martin: The biggest mistake buyers can make when buying a condo is not taking the time to do their homework in reviewing the condo's documents before purchasing. It is critically important for buyers not to rush into purchasing a property. Buyers should take the time to assess the financial health of the condo corporation, consider how the condo board is operating and determine if they are comfortable with the bylaws. Buyers should hire a real estate lawyer to help with the review process.

When it comes to selling a property, the biggest mistake sellers can make is not taking the time to understand their legal disclosure obligations. Sellers are required to disclose any material latent defects not identifiable through a visual inspection and any upcoming special assessments. Sellers are also required to confirm their unit complies with municipal bylaws and that all appliances are in working order. Failing to fulfill these obligations could result in legal action being taken against the seller in the future.

CREB®Now: ?What are some of the most common mistakes condo owners make when buying or selling a property?

Martin:Be patient: do your homework on the property, ask questions, and hire real estate professionals to help you along the path to condo ownership.