Condo Owners – We need your help!
In October 2012 a major ruling occurred in the Alberta
courts that has shaken the condo world.
The only resolution to this matter will require a massive outcry of
condo owners who are willing to put in the time to lobby for extensive change
to the Condominium Property Act, the Condominium Property Regulation, the New
Home Buyers Protection Act and possibly the Real Estate Act.
Yes, I am hitting the panic button with all my might as
there are hundreds, if not thousands, of condominium owners in Alberta who will
be impacted by this ruling. In speaking
with competent condo lawyers, the people at Government Services Alberta, and
fellow professionals in the condominium industry; it seems unanimous that the
only solution to this ruling is to have a condominium that can afford a legal
action, take this ruling to the court of appeal. The consensus for advising clients who are
impacted directly by this ruling is to suggest they continue to operate as they
were until one of the owners files a legal action.
The real solution is to amend the legislation. These Acts are intended to provide consumer
protection to condo owners, buyers and board members. It is obvious, by the number of condominium
consulting files we have at Condo-Check, that the system is broken, and
therefore; is not providing any protection to any condominium group or
individual owner who does not have the ability to hire expensive lawyers. The irony is that the simple solution is for
owners and boards to operate within reason, with a focus on what is best for
the condominium as a community. But there is always someone who is a stickler
for the law or someone who just will not agree to a compromise, and that is
when the entire community goes to battle.
Bylaws have been trying to regulate common sense since the dinosaur age
and every year the volume of pages required grows, because someone needs to
challenge the rules, just on principle.
Maybe the real solution is for condominium owners and board members to
be mandated to take training in how to be compassionate, kind, considerate,
responsible and respectful of one another.
These seem to be greatly absent when it comes to the disputes and
conflicts that arise between condo owners and condo boards. Everyone can’t be right!
This ruling is a case where a bare land condominium has been
operating for many years as if it were a full service condominium, where the
condominium owners shared in the maintenance cost for the exteriors of the
buildings and the capital items based on the description of the “Managed
Property” in the bylaws. Now, as the
buildings have aged and there are increasing demands to repair and replace
capital items, some owners feel they are paying a share that is greater than
their neighbors. The owners, on the
advice of a lawyer, have taken the board to task as to the legal application of
the wording in the condominium legislation and bylaws, as it applies to bare
land unit ownership. The court has ruled
that the condo corporation does not have the right to collect or to spend
reserve funds for the purpose of replacing capital items on components located
within the units (in this case the buildings) and restricts the use of the
reserve funds to the common property or real property. In this case, as is true for many bare land
condominiums, means that the road is the only area that the corporation can
collectively manage and collect reserve funds for. This means the owners have no choice but to
pay a special assessment when capital items need to be replaced, as they cannot
use the reserve funds that have accumulated over the past many years! Add to all this, that the corporation cannot
refund or pay back to any owners any of the reserve funds that had been collected
for replacement of the capital items.
This means that if a condo has hundreds of thousands of dollars in the
reserve account, they can only spend it on the “road” (using this example) and
they cannot transfer the money to the operating fund or return it to the
owners. It is questionable whether the
condo board has the authority to collect a fund to replace these capital items
that are located within the unit boundary at all, as the bylaw wording
restricts them to maintain and care for the managed property components and
does not state replacement. No, I am not trying to be funny! This is real life condominium dilemma;
happening to many condominiums as we speak!
Over the past few years, owners and boards for condominiums
have been managing construction defects, rogue boards, lousy property
management, aging properties and now this really damaging ruling. When are owners going to stand up and say no
more? Historically the solution to bad
condominium is to sell… my question is to whom?
The problem projects are out numbering the problem free projects. So buyers
are taking a risk! And for those who are
buying, thinking it is not important to hire a competent document review
company, thinking we are all alike so it really doesn’t matter; I have news…
you are not exempt from these problems just because you were not aware of these
problems when you bought. This impacts
the property values for ALL condominiums so why are so few owners concerned?
I don’t have easy answers or solutions. I do know that much of this bad law is
generated from people taking matters to court instead of seeking a
compromise. The courts need to follow
the law and when the legislation that supports the law is proven defective; the
answer is not to keep looking to the courts for remedy. Mediation is effective
in solving many of the disputes that arise; however, too often the opposing
parties won’t even compromise enough to agree to mediation. People want their
day in court!!!
Maybe with this ruling, a group of bare land condos could get
together and appeal… that is a question for the lawyers. What I do know is that you all live in
condominiums that are located in someone’s constituency and it is time to stop
by and to pay them a visit. Start
lobbying your MLA’s, offer to support them in getting the attention of the
Premier. The days of being a condo bystander are over. We need to join collectively, in community
and make change happen.
Bernie Winter, A.C.C.I., F.C.C.I.
C.E.O. at Condo-Check
your condo, your investment
Case
reference: Maciejko V Condominium Plan No. 9821495, 2012 ABQB 607
posted by Condominium Owners Blog (Bernie Winter) @ 3:47 PM
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