CONDOMINIUM ACT OVERHAUL

Province’s condo law to get an overhaul
Bill 13 includes new process to resolve disputes
BY BILL MAH AND MARIO TONEGUZZI 
CALGARY HERALD MAY 8, 2014

A proposed overhaul of Alberta’s condominium law, including a way to better resolve disputes, is being hailed as long overdue for the province’s booming condo market.

“The original condominium act was introduced in 1969, and it’s had a couple of minor amendments, but really the condominium developments that are being built and the complexity of the relationships has far exceeded the legislation written in 1969,” Service Alberta Minister Doug Griffiths said Wednesday in outlining the changes.

“It was time to update and modernize it.”

After years of consultations with industry and condo groups, the government tabled Bill 13, the Condominium Property Amendment Act, in the legislature for first reading on Tuesday. The bill, which must still undergo scrutiny from MLAs before being voted on, contains 50 amendments.

These include the creation of a new condo dispute tribunal; clearer and expanded disclosure to buyers of initial condo fees and other information by developers; improved governance for condo corporations and harsher penalties for “particularly unfair actions by developers.”

Griffiths said the current condominium law lacks enough tools to deal with challenges, such as disputes that arise between owners, condo corporations, builders and other stakeholders and is needed in Alberta, where there are more than 8,000 condo corporations, accounting for about 20 per cent of homes sold annually.

“We’re going to incorporate the dispute resolution process, a new mechanism that means that people don’t have to resolve things in court, which is a costly, lengthy, confrontational process,” Griffiths said.

Work on the regulations, which will include details about the dispute tribunal and clarification of insurance obligations for corporations and owners, will begin shortly.

June Donaldson, co-founder of the Alberta Condominium Owners Association, said the amendments are desperately needed.

“The fact that there’s going to be a tribunal where the average condo owner can go, and in a very constructive and collaborative way, hopefully remedy it in a way that addresses the issues that are causing them worry, money or stress … is so big,” Donaldson said.

“Condominium living in Alberta has changed so dramatically over the past 10, 15 years and the legislation has not kept up with the market,” said lawyer Robert Noce, a partner at Miller Thomson, who handles condo legal matters.

The amendments will help protect consumers, offer a way to deal with issues more swiftly and give owners and corporations a clearer understanding of their roles and obligations, he said.

Jim Rivait, CEO of the Alberta Chapter of the Canadian Home Builders’ Association, said most builders and developers are reputable and won’t have to change their practices. However, the new legislation will offer added protection to buyers, he said.

“It’s quite a complex piece of legislation, and only part of it really affects the building part of it,” he said. “A lot of it is the management and how they run the condo board, answering a lot of the issues.

“There’s some transparency things that they want to build in as people get into the whole condo business, so that people are aware. And we’re all for that.”

Condos, often more affordable than single-detached homes, are a growing sector, with 55 per cent of housing starts classed as multi-family in the first three months of 2014, Rivait said.

“From an industry standpoint, it’s becoming more and more important, not less important, because affordability causes people to enter into the market through condos as their first homes and that’s usually their first experience.”

Calgary Real Estate Board president Bill Kirk said realtors welcome the new condo legislation because added consumer protection will make condo ownership a more attractive option.

“If it’s good news for condo owners, it’s good news for the real estate industry because they’re our clients, and if it’s clearer for them how they’re going to operate, it’s just great news for us,” he said.

CREB data show 1,611 MLS sales of condo apartments in the city through Tuesday, a 20 per cent increase from the same period a year ago.

In the condo townhouse category, sales are up about 18 per cent to 1,245 units.

“The condominium review and act revisions will increase disclosure to the consumer and remove some of the uncertainty in the market,” said Matthew Boukall, director of residential advisory services for Altus Group.

“Condominium development is still a relatively new and growing housing option in our market and many consumers may be unfamiliar with the concept.

“Changes that improve disclosure and provide consumers with more information, and remove some of the hidden risks to condominium ownership should improve confidence in the built form, and may attract more consumers who were uncertain about buying a condo in the past.”