Documents to Review Before Buying a Condo in Alberta

When you buy a condo, you are buying more than a unit. You are also joining a corporation whose finances, rules and repair history will affect you for as long as you own. Once your offer is accepted, the documents the corporation holds are your best window into that.

This article explains which documents to ask for, how quickly they should arrive, what they generally cost, and what to look for before you remove your conditions. It is general information, and a lawyer can help you read the documents against your own situation.

This article covers the law of Alberta.

Why the corporation's documents matter

The bylaws regulate the corporation and provide for control, management and administration of the units and property, and owners and anyone in possession of a unit are bound by them. The corporation, not the individual owner, is responsible for enforcing its bylaws and for the control, management and administration of its property. Because the owners of the units are bound by the bylaws, buying a unit means you will be bound by that corporation's bylaws too.

Condominium law in Alberta comes mainly from the Condominium Property Act and the Condominium Property Regulation. Reading the documents tells you how those rules play out in the specific building you want to buy.

What you can ask for and how fast

On written request, the corporation must provide prescribed information or documents within 10 days after receiving the request. Put your request in writing and keep a copy.

The Regulation lists the documents available on request. They include the following.

• The information statement
• The budget and annual financial statements
• The bylaws
• General meeting and board meeting minutes
• Professional reports that are not privileged
• Insurance certificates and policies, and the standard insurable unit description
• Reserve fund plans, reports and annual reports

Separately, an owner, a purchaser, a mortgagee or their representative can ask in writing for an estoppel certificate, which the corporation must provide within 10 days after receiving the request.

Red flags to look for

The information statement covers pending or unsatisfied actions and judgments, reserve fund and contribution amounts, structural deficiencies, loans, plans of survey and unit factors. Start there, then compare it with the minutes and financial statements.

• Lawsuits or unpaid judgments against the corporation, which could lead to a special levy because a levy can be used to satisfy a judgment.
• A thin reserve fund. The corporation must maintain a reserve fund reasonably sufficient for major repairs and replacement.
• Old or missing reserve fund studies. The first study is due no later than 2 years after the plan is registered, and it must be repeated on or before 5 years from the day the most recent reserve fund plan was approved.
• Structural deficiencies or loans listed in the information statement.
• Minutes that discuss urgent repairs, operating shortfalls or planned special levies, since a levy can fund unexpected and urgent repairs and operating shortfalls.
• Insurance gaps. The corporation must insure the units, other than owners' improvements, at replacement cost value, and insurance is subject to any reasonable deductible agreed with the insurer, though a corporation must not require an owner to pay more than $50 000 of a deductible under s. 62.4 of the Regulation.

A board can usually decide on a special levy by resolution without an owner vote, except that a capital improvement levy needs a special resolution of the owners first. That is why reserve fund health and upcoming projects matter to a buyer.

What the documents cost

A corporation may charge for producing documents only where a regulation authorizes it and only in the prescribed amount. The current maximums are below, though regulations can change.

The 3-day rush is a paid option, not a deadline. The ordinary deadline is 10 days.

What to do next

Check how long your condition period is, then work backward. Because the corporation has 10 days to respond, ask early. If time is tight, ask whether a rush option is worth paying for.

• Send a written request for the information statement, bylaws, budget, financial statements, minutes, reserve fund documents and insurance documents.
• Request an estoppel certificate if your lender or lawyer needs one.
• Read the reserve fund plan, recent minutes and any professional reports.
• List every red flag and ask your lawyer or realtor how each affects the price or your conditions.
• Do not waive conditions until you have reviewed what you asked for, or extend the condition date if needed.

Frequently asked questions