Buying a condo? Knowing the terms means knowing what they're talking about when they ask for your money (it helps).
Required by the Condominium Property Act, setting an annual budget is the duty of the condominium Board of Directors. Contributions (fees) are decided and funds collected for maintenance of common property and administration of the condo corporation based on the annual budget.
Annual General Meeting
Once per year, within 15 months of the last AGM, the Board is required to hold a meeting open to all unit owners. At this time the old Board reports on any unfinished business, discloses financial reports from the previous year and a new Board is elected.
Board of Directors
Each condominium has a Board of Directors that is elected by, and generally made up of, the unit owners. The Board is responsible for administration and management of the condominium corporation, including policy and finances, as well as decisions about the maintenance and repair of the common property. Some decisions will directly affect your use of common property elements. Unit owners are usually entitled to one vote for each unit they own for each position on the Board of Directors.
Initial bylaws for all new condo projects are listed in Appendix I of the Condominium Property Act, but are usually replaced by the developer (and adopted by the unit holders) with a set of bylaws specific to each project.
Common Elements or Common Property
Common elements or common property are the portions of the condominium that are not owned by a unit purchaser as part of his/her individual unit. They are shared and coowned by all the individual owners of the condominium corporation. They usually (but not always) include such things as corridors, elevators, recreational facilities, playgrounds, lobbies, the grounds, central heating and airconditioning systems and parking. What is and is not included, as part of the common property elements, must be listed in the condominium’s governing documents. It is possible that some of the common elements may be reserved for the personal use of one or several owners. They are known as restricted or exclusive use common elements.
A condominium is, essentially, a corporation made up of unit owners. The business of the corporation is managing the condominium.
Every condo community must have a plan, registered at the land titles office, that provides a concise definition of the perimeter of the master lot, location of any and all buildings, unit boundaries and the unit-factor distribution.
Condominium Property Act
The Alberta statute that regulates condominium ownership. Each province hasjurisdiction over its own condominium legislation.
Contributions (Condo Fees)
All unit owners must contribute to a fund to be used for payment of common property costs.
In some jurisdictions, the developer of a new condominium must provide you with a disclosure statement before the agreement of purchase and sale is binding. The statement includes, among other things, a summary of features/amenities, proposed commencement and completion dates for construction, the condominium’s governing documents and budget for the first year after registration.
This term can refer both to a type of contract, an “emphyteutic lease” and to the right granted under an emphyteutic lease, “emphyteusis.” Under an emphyteutic lease, a property is leased to a tenant for a period of not less than nine (9) years and not more than ninety-nine (99) years. The lease will specify the annual rent to be paid, and will require the tenant to improve the property by doing things such as constructing and improving upon buildings. During the term of the lease, the tenant has the right to transfer the property to another party and to mortgage the property. At the end of the lease the tenant must return the property to the landlord in good condition. Any improvements made to the property will be owned by the landlord. This type of lease can be used in the development of commercial property or other forms of land development.
Estoppel Certificate or Status Certificate
Most jurisdictions require condominiums to issue information packages to prospective buyers. This package can contain the declaration, by-laws, rules and regulations, insurance information, reserve fund balance, other financial disclosures, legal description of the unit and management contract (if applicable). It may also include information about any legal filings or judgments against the condominium
corporation, the possibility of common expense increases, special assessments or insurance claims, all of which could affect condominium fees.
These are the documents that describe how the condominium is organized and operated. They have different names in different provinces, but they can include declarations, by-laws and rules. They can contain provisions setting out the boundaries of the common elements and the individual units, the percentage of ownership each owner has in the common elements, the by-laws/budget and common expenses. Governing documents vary from one condominium to another and are filed with the land registry office when the condominium corporation is created.
The property manager handles the day-to-day running of the condominium, such as hiring of staff, maintenance and repairs. The property manager is under contract to the condominium corporation. A representative from the property management company usually attends board meetings. Some condominiums may not have a property manager. These are sometimes referred to as self-managed condominiums. The Board of Directors, with the help of volunteers, will assume responsibility for the day-to-day management in these cases.
This is a fund set up by the condominium corporation in a special account to cover the costs of major repairs and replacement of the common property elements over time.
Reserve Fund Study
Reserve fund amounts and contributions are determined by a technical audit and reserve fund study undertaken by a qualified consultant. This study takes stock of the depreciating common and corporate property which will need to be repaired or replaced over the next 25 years and estimates the costs of said repairs or replacements.
Home sweet home. The unit is the area that you actually own and hold title to, with set boundaries defined by the condominium plan. Repair and upkeep of the unit are generally your responsibility.
Unit Factor is the term used in the Alberta Condominium Property Act to define each unit owner’s tenancy-in-common share in the common property. The unit factor is also used to determine each unit owner’s contributions (condo fees).
Glossary and Terms Provided by Source Media Group, to view Full Post
|The data included on this website is deemed to be reliable, but is not guaranteed to be accurate by the Calgary Real Estate Board. The trademarks REALTOR®, REALTORS® and the REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA. Used under license.||