Stronger protections for new condo buyers
New rules will help better protect Albertans when buying a condo.
A new home is the largest purchase most Albertans will make, and today the government approved new regulations that will better protect Albertans’ investments.
“Albertans deserve to be protected when making a big purchase like a home or investment property. Today, we have taken the first steps toward reassuring Albertans that their investments are properly looked after, so they can feel confident when investing in the condo market.”
The new rules will improve protections for buyers of new and converted condominium units by:
- Requiring developers to give a final move-in date, and if they cannot deliver on time, buyers have the option to renegotiate or cancel their contract and get their deposit back.
- Preventing “fee shock” by requiring developers to give a realistic estimate of condo fees a buyer can expect to pay when they move in.
- Requiring developers to include more information in the contract, such as floor plans and finishes, to help buyers make a confident decision.
- Creating new rules so developers must hold buyers’ deposits in trust with a lawyer while their condos are being built.
- Requiring developers to provide more information to the first elected condo board, to create a smoother transition for owners.
- Allowing the government to investigate breaches of the act, and issue fines to developers where necessary.
The bulk of the new regulations will come into effect Jan. 1, 2018, with the remainder coming into force April 1.
“The new rules will benefit both condominium builders and purchasers. As consumers look to purchase homes, having rules that enhance their confidence and security will result in increased participation in the marketplace.”
“Condo owners in Alberta have been eagerly anticipating these changes. The new rules give us more options and more information up front, and help us better protect our investments.”
Condo survey launching today
Public consultations are now underway for the second set of regulations, focused on improving condo living.
Albertans are invited to complete an online survey on issues such as:
- how meetings are run and how votes take place
- rules on renting a condo
- who should repair units and pay for insurance
- how reserve funds are managed
- what kind of say owners get in the rules the board makes
- how to make sure condo boards have the support they need to fulfil their roles
- establishment of a condo tribunal to more easily resolve disputes as an alternative to the courts
The survey is available at condo.alberta.ca until Nov. 10, 2017. It is a followup to a series of open houses held across Alberta earlier this summer.
Input from the survey and open houses will help the government create new regulations related to governance and dispute resolution. The new rules are expected to be finalized in 2018.
Backgrounder: Condominium Property Amendment Act
Alberta’s legislature passed the Condominium Property Amendment Act in December 2014. Since that time, regulatory work has been underway to bring more than 50 amendments into force. The first stage of amendments, going into effect in early 2018, is focused on improving the protection of condo buyers after they’ve committed to purchasing a new or converted property.
The government received feedback on the first stage of regulations from condominium owners, developers, managers, legal and real estate professionals, as well as business and industry associations.
Among the feedback received
- Suggestions for the type of information that should be provided to purchasers at the point of sale.
- Concerns about setting low condo fees as a selling feature, with owners then having to pay higher fees in subsequent years, when actual costs were included in operating budgets.
- Clarification required for the definition of “material change.”
Coming into force on Jan. 1, 2018
- Broadening of the information developers must disclose to elected boards when the boards take over control of the corporation, such as technical documents and financial information.
- Expanding the agreements that can be terminated by the first elected board of a condo to better protect condo owners from being stuck with a poorly negotiated agreement. The new laws allow for the inclusion of almost any agreement that may be in place during development, including landscaping agreements and maintenance agreements.
- Formally recognizing ways in which an owner may call special meetings of the corporation.
- Giving the government additional inspection powers and the ability to issue fines to developers, if the rules are not being followed.
- Increasing the penalty for offences, from $15,000 for an individual and $25,000 for a company to $25,000 and $100,000, respectively, or three times the amount gained by the offence, whichever is greater.
Coming into force on April 1, 2018
- Require developers to give buyers an occupancy date so they know when their units will be ready, and concrete remedies, including the ability to end a contract, when the unit is not ready on time.
- Requiring developers to provide more information to condo buyers, including occupancy dates, materials to be used to finish the condo, and other fees that the developer will charge the purchaser.
- Increasing protection for purchasers’ trust money by requiring it to be held by a lawyer instead of the developer and creating specific rules about how it’s handled.
- Means for condo corporations to recover costs directly from the developer when the developer has deliberately underestimated expenses for things like heating, maintenance and management, during the marketing process.
- Rules for notice and options for buyers when changes happen during construction that a buyer did not agree to.
- New rules to ensure the appropriate number of parking spots for visitors and people with disabilities are included in condo plans.