On January 1, 2020, the Phase III of Alberta Condominium Property Act Amendments took affect. This came after a six month pause instituted by the Government of Alberta, specifically by the Honourable Minister of Service Alberta, Nate Glubish, in an attempt to cut red tape . The government wanted to alleviate the “administrative burden on condo corporations while protecting condo owners and their investment,” according the Government’s website. During this period, stakeholder round tables were held so that feedback from the industry could be incorporated. In the end, administrative changes, monetary sanctions, and increased clarity of the responsibilities of condo boards and corporations were all integrated into the Alberta Condominium Property Act Amendments.
STANDARD INSURABLE UNIT DESCRIPTIONS
One of the more significant changes has been the introduction of a Standard Insurable Description (SIUD). And SIUD must be adopted by all residential condominium corporations into an amended bylaw and filed with land titles by the first insurance renewal date after January 1, 2020. Moving forward, developers will be responsible for creating and delivering an SIUD to the owners once occupancy takes effect.
Once a Standard Insurable Unit Description is passed by the condominium corporation, the outline will help clarify what is a standard feature that is to be covered by condo insurance and what is an improvement to the unit that is to be covered by the home owners personal insurance. The goal is to prevent future disputes between unit owners, the condominium corporation, and insurance companies should there ever be an insured loss. An SIUD can additionally help ensure the condominium has the correct level of insurance to cover the standard finishes.
The updates to the Alberta Condominium Property Act Amendments also change practices around condominium insurance deductibles. Corporations will now be able to recover up to $50,000 from unit owners to cover insurance deductibles if damages originated from within their unit or in an area that the owner is responsible for, like a balcony, even if it was not their fault. Under the new legislation, the unit owner could be responsible for up to $50,000 of the deductible. If the deductible is only $30,000, the owner’s liability would be for the full $30,000. If it’s $75,000, the owner’s liability would only be for a capped $50,000.
As there is a potential for a new expense to unit owners in the event of an insurance claim several steps should be taken to mitigate their risk, as reported on Global News.
- All condominium owners should have an unit owner’s insurance policy.
- Ensure that deductible coverage up to $50,000 is included in the unit owner’s policy, and if not, ask to have it added.
- Owners should also ask their property management firm or condo board for a copy of the corporation’s certificate of insurance which will outline the deductible amounts.
Other changes that took place January 1, 2020 as part of the Alberta Condominium Property Act Amendments are listed on the Government of Alberta website. These include, but are not limited to the following:
- The requirement to provide the minutes of all board meetings in the package for Annual General Meetings (AGMs).
- Changing the requirement to disclose draft AGM minutes from 30 days to 60 days after the AGM.
- Changing the maximum fee for an estoppel certificate from $100 to $200, or $300 if rushed, and add a disclosure statement document fee of $100, or $150 if rushed.
- Changing the per-document cost for paper documents from a $10 flat fee to $0.25 per page, or $10, whichever is more.
- Allowing condominium corporations to borrow up to 15 per cent of their annual revenue as the default limit but also allow that limit to be changed through their bylaws.
- Removing the requirement to provide 60 days preliminary notice of an AGM and accept owner submissions for the agenda.
- Eliminating tiered rates for deposits condominium owners provide to their corporation when renting out the unit they own and setting the maximum for these deposits at $1,000 or one month’s rent, whichever is higher.
- Broadening the list of those who can conduct reserve fund studies.
Condominium corporations will still have one year in which to pass an ordinary resolution to bring their bylaws into compliance with the changes to the Alberta Condominium Property Act. This process is limited to bylaw amendments that address actual conflicts that pertain to the updates in the new Condominium Property Act, and cannot be used to approve other changes to the bylaws which would still need to be approved via special resolution.
Normac’s expert property information collectors and insurance appraisers are uniquely positioned to assist in the process of defining a standard insurable unit description and can help prepare the outlines for condo boards and corporations. Contact our client services team today to learn about our various SIUD offers.