Condo Issues

Robert Noce

Q: Our small condominium corporation is managed by a third-party property management company that charges owners $25 per year to get a PDF copy of the minutes for monthly board meetings. Is this normal?

A: Property managers are entitled to charge owners fees for certain tasks. Those fees would be reflected in the management agreement that is signed between the property manager and the condominium corporation. There is an administrative cost for property managers to do additional work, and they charge owners for that. If you are unhappy with that charge, then you need to get involved with your board and ensure that the next contract has either a lower cost or no fee at all. Condominium corporations have the power to negotiate the terms and conditions of their contracts, and hopefully they have legal assistance in that regard.

Helpful hint: Each party has the ability to decide on any terms and conditions they wish with respect to how the relationship will be governed. If the condominium corporation feels that the fees are too high in the proposed contract then it should suggest another amount, and if the property manager does not agree with it, or counters at a different amount, then the negotiations will begin. You have the power to decide how much you want to be charged. The property manager has the power to decide whether or not they are being paid sufficiently to operate the building.

Q: I own the middle unit (currently a rental property) of a three-townhouse complex that has been registered as a condominium plan. We have a condo board that consists of each of the three owners, including myself as treasurer. This was arranged before I bought the property. We have fenced backyards, and the egress for my property is through either of the end units. Are the fenced-in backyards classified as common property? My husband and I have paid to have our portion of the fence replaced out of our pocket, because we were led to believe that this land was not common. Is all of the land, even within the fences, common?

A: In order to answer this question you need to review your condominium plan, which will set out whether or not the fenced-in area is common property, common property with exclusive use, or part of your unit. The outcome of the review of your condominium plan will answer your questions, including ownership of the fence. If you are unable to read or understand your condominium plan, then I would suggest that you speak to your property manager, and if you do not have a property manager then speak to someone who is able to provide you with some advice. You may need the assistance of a lawyer.

Helpful Hint: The condominium plan is a document that is filed at land titles that provides owners with a lot of information about who is responsible for what, and what is (or is not) common property. Take the time to review it and ensure that you have a copy of it.

Q: When I originally purchased my townhouse, the management company said that they look after the outside maintenance, including the roof, windows, grass, etc. I now have a problem with the outside tap for the water hose. I tried watering the plants and grass, but then the tap wouldn’t shut off and I had to turn the water off from the main valve. Is this my responsibility to fix or the management company’s, considering the tap is on the outside of the condo?

A: Whatever your property management company said or did not say is irrelevant. What matters is who is responsible for the repair of the tap, which is on the outside of your condo unit. From your question, I do not know if this is a conventional or bare land condominium. My answer may be different depending on the type of condominium building. As well, you will need to review your condominium plan and your bylaws to give you a definitive answer as to who is responsible for the repair.

Helpful hint: Unfortunately, there is no one answer for every condominium in Alberta. What may be the responsibility of the condominium corporation in one building may be the responsibility of an owner in another. Take the time to review your condominium plan and bylaws to give you some assistance, or at least a starting point, as to the ownership of the particular repair. 

Q: How do I check whether there has been a special assessment levied on a condominium in the past, and how do I verify what the special assessment (if there was one) was for?

A: I would review the minutes, the budget, and previous budgets to determine whether or not there has been any special assessment levied on the owners in the past. You may also want to ask the property manager and/or a member of the board.

That information is not secret and should be readily available. If anyone refuses to provide you with that information, that should be a red flag for you.

Helpful hint: Certain information should be made readily available to an owner when asked. Whether a special assessment was issued years ago should be available to anyone to assess the financial position of the condominium corporation.

Q: Our condo board is having some issues with an owner not keeping up hygiene and repair within his unit. Does the board have any legal right to take units over? He has not been able to rent it in a year and blames the economy.
I have been inside the unit, and have seen mouse droppings and cockroaches. The wallpaper is also torn off in places, there are window screens missing, unknown stains, etc. Some other owners are renting their units to people who are not the type of people we want in our building.

This includes people who don’t abide by our “quiet time” request, people who disrespect other residents, people who have loud domestic disputes, etc. Do we have a legal right to request that the board approve all new tenants?

A: First, you may very well have every right to take steps to clean the unit in question if, in fact, it is having an impact on other units. This will require a court order to allow you to take the necessary steps to gain entrance into the unit and take whatever steps necessary to clean the unit.

With respect to some renters who are not good renters, again, there are sufficient provisions under the Condominium Property Act to deal with destructive renters, and I would strongly encourage you to contact the condominium corporation’s lawyer to discuss your options.

Finally, you do not have any right to approve the quality of the tenants. That right belongs to the owner, and the owner is required to provide certain information to the condominium corporation about his/her tenants, including providing a security deposit. Again, talk to your lawyer about options.

Helpful hint: The law in Alberta is clear in that an owner can rent his or her unit. You cannot pass a bylaw that prevents the renting of a unit.

Q: Our condo board has wanted to update the bylaws for several years now, as they are outdated, containing wording that is no longer commonplace, and need to be updated to reflect today’s technology in communication.

We decided to wait to update our bylaws until the Condominium Property Act was updated. We know that regulations are being addressed, but it was our understanding that the bylaws need to agree with the Act. Are we right? Should we stay the course and wait, or can we proceed?

A: You are correct; the bylaws have to be consistent with the Act, and if there is any inconsistency between the Act and your bylaws, the Act prevails. There is nothing preventing you from amending your bylaws today.

In fact, given the delay that the government has taken in proclaiming the amendments to the Condominium Property Act, I would encourage you to do it today.

Helpful hint: Even though a lot will be done by regulations, the Condominium Property Act amendments have been approved by the legislature (even though they are not the law yet) and they do provide sufficient guidelines as to what your bylaws should look like.

Q: I have lived in my townhouse for 17 years, but our condo board and property management group of the last six years are being selective about the bylaws they enforce, and actually look like they are not enforcing any. For example, there has recently been undue noise and damage caused to our common property. A unit in our complex last year was rented to a large family, and no one has had the conversation with the children regarding their indoor voices or respect for our property, as they are running and yelling constantly throughout the entire complex. The parents are never outside with the kids, and just send them outside to run around.

The one time I did try to discuss this issue with them, I found them to be disinterested. Since they have gotten away with turning our complex into a playground, now other children join in. I am entitled to peace and quiet, but if the board and property manager refuse to address the issue, what recourse do I have?

A: First, the board of a condominium corporation does not have discretion when it comes to enforcing bylaws. If there is evidence of a breach, the board is required to enforce the bylaws. However, the situation you raise is discretionary in the sense that what may be noise to you may be normal to everyone else. Some people are more sensitive to children than others, and obviously, this is not a simple black and white infraction.

I wonder whether or not other owners feel the same way as you. If the majority of owners are voicing the same concerns, then the board should react. However, if you are the only one complaining, it may be difficult to prove that your concerns are valid. You could suggest that the board try to address this issue by bringing the parties together and trying to find a solution.

Helpful hint: When you live in a condominium you have to respect other people’s space, and that requires constant recognition that you do not live alone.

Q: I am an owner in a bareland condo development with 26 units, which took about four years to be completed. The developer is handing it over to the owners shortly. The developer never charged any condo fees to anyone during this time, and as a result there is no reserve fund. The owners recently had a meeting, where we conducted a vote with a show of hands and the majority voted to hire a company that would help us get started, setting up a board and bylaws, as none of the residents have experience with this process. Do you have any recommendations?

A: You did the right thing in agreeing to hire a property management company to assist you in getting started. There is a lot of work ahead of you in terms of electing a board, determining a budget which will ultimately set the condo fees, and reviewing the bylaws to make sure that they work for your condominium. I would also encourage you to hire an accountant and a lawyer to keep on retainer if an issue arises in the future. The situation you have described is not unusual, but as long as the board hires a competent property manager, you will be fine.

Helpful hint: There is a business side to condominium living, and you may need to hire a company to help you navigate day-to-day operations. Seek out proposals and interview three or four potential property managers.

Q: At a recent board meeting, a member asked if we could send the annual general meeting (AGM) packages by way of email to the owners. Our bylaws and the Condominium Property Act (the “Act”) do not cover methods of delivery, only how much notice must be given. Is an email written notice?

A: Unfortunately, I suspect that your bylaws were written prior to the invention of email, and as a result I would suggest to you that you cannot send the packages by email. If you want to do so, then you should amend your bylaws to state that you are allowed to send any correspondence by way of email. The problem is that some people still do not have email addresses.

Helpful hint: When the new amendments to the Condominium Property Act take effect, the ability to communicate electronically will be permitted in some form. There is nothing preventing you from amending your bylaws today to recognize the fact that it is 2017.

Q: I live in a bare-land duplex bungalow-type condominium. The president of our condominium association has been aggressively promoting his employer to carry out a project in our complex. When he raised this at a board meeting, two members of the board pointed out to him that he was in a conflict of interest, and that he should leave the room while the board discussed the issue. He completely ignored these objections and carried on with his sales pitch.

The other four members of the board did not support the two members who objected to the president’s involvement. The president then asked the board members to sign a contract with his employer, without first reading the contract. The same two board members refused to do so, but some of the other board members seemed inclined to sign the contract. At that point, as a member of the community, I demanded that an extraordinary meeting be held to discuss the matter and allow residents a chance to voice their opinions.

This meeting is going to be held in the near future. In the meantime, the president has retired from his former company and now feels that he is completely free to chair a meeting on the project and speak in favour. I would like you to comment on what the community can do with a president who so blatantly broke the conflict of interest rule, and what should be said to the four board members who made no effort to stop him.

A: Based on your fact scenario, there is no doubt that the board president was in a conflict, and shame on the four board members who failed to see that. The minute the conflict issue was raised, the board president should have excused himself from the meeting and allowed the remaining board members to make a decision. I believe that the board president and the four members of the board did the condominium community a disservice. The fact that the board president has now resigned from his employer may prevent you from dealing with this issue on a broader context. However, if the condominium corporation has been negatively impacted by this decision in terms of costs, then I believe that the board president and the four board members who ignored the conflict may have exposed themselves to personal liability.

Helpful Hint: When the issue of conflict is raised, it must be dealt with seriously. The property manager must be equipped to respond to the issue of conflict, and if it is a complex issue then retain a lawyer to help.

Q: We live in a 25-year-old, 37-unit bungalow-style bareland condo. The board has forbidden any owners from talking with contractors. Many owners have board-approved flower gardens surrounding their units, and some have been maintaining the trees and shrubs adjacent to their dwellings. Last year, the board hired a contractor to complete some flood study work by building up the level of ground surrounding some foundations. No owners were forewarned of this work and flower gardens were ripped out. Some people returned from holidays to find their flower gardens and favourite plants were gone. We questioned a board member and were told that the board has the right to remove a flower garden without notice. The same is happening again this year, and last week we returned home to find a birch tree that provided privacy to our deck and bedroom window had been cut down. Again, we received no warning or explanation as to why this was done. Please explain how this happened.

A: First, I would need to know whether or not the plants and/or trees are on common property. If they are, then the board may have every right to deal with the plants, flowers and trees as they wish. As well, it is good practice that contractors should not deal directly with owners. The contractors are hired by the condominium corporation and receive their directions from either the property manager and/or a board member as a result of a board decision. It would be absolute chaos if a contractor were to receive different instructions from owners on one particular issue. What is unfortunate is the apparent lack of communication between the condominium board and the owners with respect to the contractor’s work. I believe that providing information to owners helps deal with these issues.

Helpful hint: Condo boards have every right to make decisions relating to the common property. However, some owners may have exclusive use over an area of common property (eg. parking stall).

Q: What is the role of the site manager, and who decides the amount of monthly fees given to the site manager if they are a condo owner in the complex?

A: The role of the site manager generally is to deal with the day-to-day on-site issues. A site manager could deal with a leaky faucet or a door that is not working, or an issue on the common property. A lot of high-rise condominium buildings or condominium corporations with a lot of units hire on-site managers to deal with day-to-day issues because it is very difficult for the individual board members to deal with these issues that come up at all hours of the day. The salary of the site manager is set by the board and it is a board decision. 

Helpful hint: When setting a salary, the board should be aware of the market conditions, the job duties and the skill sets of that person. 

Q: I am a board member of a small (less than 20-unit) condominium complex. We have been very dissatisfied with our property management company for several years now. Unfortunately, due to the size of our complex, we haven’t had any other management companies interested in representing us. One option we are interested in is to move toward self-management. What would we need to do on a day-to-day basis? What boxes do we need to check, and does this seem like a good idea?

A: I find it odd that you cannot find a property management company to manage a 20‑unit condominium building. I suspect that the real reason is cost, in that the property management company knows that it will incur a certain amount of time and effort in managing the complex and the condominium corporation is not prepared to pay for that level of service. Moving toward self-management is perfectly fine; however, you will need to find people on the board who are prepared to deal with the administration of operating a condominium complex (eg. depositing of cheques at the bank, dealing with day-to-day issues, contacting contractors and lawyers/accountants to deal with issues that may come up from time to time). If all the board members are employed and have other commitments (eg. family, kids, etc.) dealing with these day-to-day issues will be difficult. I would strongly urge you to have a discussion with the condominium corporation’s lawyer about options, and maybe your lawyer can help you find the right person to help you.

Helpful hint: Self-managed condominium corporations can work and are legal in Alberta. However, the reason you pay someone like a property manager to do certain things is to lessen the workload of board members. The work still needs to be done.

Q: I am an owner and board member in a new 24-suite condo. There is a dispute ongoing between the builder (who has a representative on the board) and another board member over the purchase of a suite. A proxy was given by the builder to the individual, who was a tenant with a deal to purchase, but the deal fell through and the board member has subsequently been evicted by the builder. The board member who was evicted refuses to resign, and the builder simply wants the individual to go away. The rest of the board is now caught in the middle of this mess.

To complicate matters, the evicted board member still has keys to the building, and the board is of the view that this is trespassing. Since the board member no longer has a vested interest in the building, as neither an owner nor a tenant, the rest of the board wants to arrange a special general meeting of owners to remove the board member, as per the bylaws. Any tips to ensure due diligence is properly followed?

A: You find yourself in a real mess. First, take the time to review your bylaws to determine whether or not you have to be an owner to be on the board. Are tenants allowed on your board? The Condominium Property Act states at least two-thirds of the membership of the board must be owners unless the bylaws provide otherwise. What do your bylaws say?

Second, given the fact that he is neither an owner nor a tenant, I would strongly urge you to demand him to return the keys. This individual should not have access to the building. Finally, review your bylaws to determine what process you can follow to remove a board member. Does your condominium have a property manager who is assisting you in this regard? Have you retained a lawyer to help you in the event that this individual refuses to comply with your demands?

Helpful hint: This individual, who has no interest in the building as an owner or tenant, is being disrespectful. The whole purpose of being on a board is to improve the quality of life for your fellow residents. If you cannot live up to that basic standard, then get off the board.

Q: I sit on the condo board in my building, and we have a tight budget. At the end of the year, any remaining money is put into a contingency fund and we start out the ‘bank’ with zero. The budget that is passed allows us to do things throughout our fiscal year, but we have a cash flow problem. While there is money in the budget for gardening projects, for example, we cannot carry them out at the beginning of our fiscal year because we have to wait until the maintenance fees are collected throughout the year to pay the bills. This does not make sense for us in terms of when is best to buy and plant items.

Once our fiscal year comes up in September, at our next Annual General Meeting I would like to discuss the possibility of keeping money in operating funds to help with cash flow. Can I do this?

A: Yes. Your condominium corporation has a unique way of budgeting that is not against the law, but puts particular stress on the overall budget for the corporation. At the next AGM you can make a motion directing the board to budget differently. You will need to come up with the proper wording for your motion, and you must ensure that you have adequate support among your fellow owners to pass such a motion. You may have to lobby your fellow owners.

If the motion passes by a vote of 50 per cent plus one, then the board must follow that direction in accordance with s.28(7) of the Condominium Property Act. You should give the board advance notice of your intention to make a motion, so that it is placed on the agenda and everyone is aware of the purpose of the motion. If you just bring the motion up at the AGM there may be some concern that the owners cannot vote on it now because other owners were not aware of this significant vote.

Helpful hint: Owners have a tremendous amount of power when it comes to the direction of the condominium corporation. Boards are charged with the responsibility of making decisions on a day-to-day basis, and also make decisions that impact the corporation in the future. If owners are not happy with that direction, they can use their power under the Condominium Property Act to direct the board otherwise.

Q: Our small bareland condo association has had water seep through the basement walls in four units. Damage has been limited on the inside, but the walls need to be fixed at quite a cost. The association is of the opinion that the repairs are not the association’s responsibility. Who should pay for these repairs?

A: As a bareland condo, the starting point would be that the owner would be responsible for the walls. However, some bareland condominiums have what is called “managed property.” You need to review your bylaws to determine whether or not any of the owner’s responsibilities have been delegated to the condominium corporation. If the responsibility of the walls was delegated to the condominium corporation, then it would be the responsibility of the condominium corporation to repair. Unfortunately, without the benefit of your bylaws, I am unable to give you a definitive answer on this question.

Helpful hint: When an owner is faced with some uncertainty as to who is responsible for the repair work, it would be helpful for the property manager, the board, or legal counsel for the condominium corporation to provide a written explanation to an owner so that there is some understanding as to the process.

Q: I live in a 30-year-old condo building that will require many maintenance expenses over the coming years. There have been three special assessments in the last five years, two of which were for projects that the board knew were forthcoming. Previous boards had decided that these projects would be mainly funded by issuing special assessments to the unit owners as they come up, rather than raising condo fees to build the reserve fund to meet these expenses. I thought it was required by condo boards to plan for known future building repairs/projects by setting aside money from condo fees to cover repairs that are foreseen, rather than simply issuing special assessments as needed. Is the board planning things correctly?

A: There is a requirement that a condominium corporation conduct a reserve fund study every five years. The purpose of this is to determine what repairs or maintenance work is required for the condominium corporation, so that it can budget accordingly. A well-managed condominium corporation would charge owners what is needed to operate on a day-to-day basis, plus an additional sum to put aside for those future capital repairs. There is nothing illegal about issuing special levies, as opposed to collecting money over time and putting it aside. The problem with special levies is that it hits owners with significant payments and places some owners in a difficult financial position. I think the rationale for issuing special levies is that the board is trying to suggest that those who own a condo at the time the money is needed should pay, as opposed to owners paying for repairs five to 10 years into the future that they may not derive a benefit from. I think that kind of thinking is short-sighted, but legal.

Helpful hint: A well-managed condominium corporation meets its day-to-day obligations, plus it puts money aside for future capital repairs. Special levies should be used sparingly, but they are a tool available to a board when money is needed.

Robert Noce, Q.C. is a partner with Miller Thomson LLP in both the Edmonton and Calgary offices. He welcomes your questions at condos@edmontonjournal.com. Answers are not intended as legal opinions; readers are cautioned not to act on the information provided without seeking legal advice on their unique circumstances. Follow Noce on Twitter @RobertNoce.