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Introduced in December 2014, Alberta introduced sweeping changes to the CPA Condominium Property Act. These proposed changes were put into Bill 9, with the Alberta government introducing them through 3 phases. The first phase of changes came in 2018 which improved consumer protection.
Readers Notice: The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only.
The second phase of changes to the CPA, introduced on January 1, 2020, improves board governance.
Of course, as Alberta’s largest independent property management firm, Magnum York has been managing the changes in the phases seamlessly for boards and their owners, as well as providing ongoing education. Here’s some information we’ve gathered and reviewed to help understand the newest phase 2 changes.
The biggest change that everyone is talking about is regarding the insurance deductible assessment.
Why do condo owners have to increase their insurance deductible to a maximum of $50,000?
In BFL Canada’s most recent “Condo Legislations Changes” Notice, they state:
“Effective January 1, 2020 the board can recover the Corporation’s deductible from an owner for damages that originate in or from the owner’s unit or an exclusive use area, to a maximum of $50,000.”BFL Canada, “Condo Legislation Changes” .PDF
Deductibles could vary from condo corp to condo corp — the corporation’s Certificate of Insurance has the exact amount. $50K is the maximum stated in Bill 9.
Most condo corporations did not have by-laws that allowed for deductible recovery. Because it’s now part of the act, this will impact every Condo owner in Alberta.
Some condo owners will just need to review their existing policies to ensure they are covered. Most will likely need to increase their insurance deductible on their unit insurance.
Does an owner HAVE to pay the condo corporation’s deductible amount, even if it was an accident?
Whether or not there was any proven negligence the Owner may be responsible to pay the Corporation’s deductible amountCanadian Condominum Insitute, Alberta North Chapter, “Attention: Condo Owners” .PDF
There *are* instances where the owner might not have to pay the deductible, for example, if there was a defect in construction or an act or omission of the corporation (Condo board directors, employee, officer).
But in most cases, it’s going to fall to the owners to provide the deductible for the corporation’s insurance. What we’re talking about here are things like flood damage that seeped down into the floors below. Or fires started that spread to other units.
IMPORTANT! All condo owners should read a copy of CCI’s “ATTENTION: CONDO OWNER” .PDF
CCI (Canadian Condominium Institute) North Alberta Chapter created a wonderful infographic poster that all owners of condos should read regarding the insurance deductible. AND, all condo boards should distribute to their owners.
Here are the 3 steps CCI suggests condo owners follow:
- Ask your Board, Manager or Corporation Insurance Broker for a copy of the Corporation’s Certificate of Insurance that outlines the current deductible amounts, in particular, the water damage deductible.
If you are in a condominium that Magnum York manages, the owners can find the Corporation’s Certificate of Insurance in your original condo paper package you received when you purchased your corporation.
- Contact your personal Insurance Broker and inquire whether you have deductible coverage in your Unit Owner’s policy and if not, request to add coverage.
- Is the deductible coverage in your Unit Owner’s policy equivalent to the Corporation’s deductible? If not, adjust your deductible accordingly.
(thanks for great infographic, CCI!)
What else should condo boards and owners know about changes to the Condominium Property Act?
The Alberta government paused the roll-out of phase 2 of the changes to the CPA mid-2019 for a review and to “ease the administrative burden on condo boards and corporations while protecting condo owners and their investment.”
They released a clause-by-clause annotation of what the changes to the CPA are, and where they are impacted. While it’s very long (longer than the act itself), for those who revel in the contract details it’s a great read.
The Alberta government released 8 “fact-sheet” publications covering important topics of the Condominium Property Act
1. Reserve Fund Study Providers, Plans and Reports
“A reserve fund study of the depreciating property of a condominium must be conducted every five years. This fact sheet looks at the requirements for the reserve fund study, qualifications required for conducting a reserve fund study, and exemptions from establishing a reserve fund.”
2. Updating Condominium Bylaws
“This fact sheet explains a special exemption for changing corporation bylaws so they do not conflict with updated condominium legislation, effective January 1, 2020. The exemption provides a one-year “window,” for corporations to amend their bylaws by ordinary resolution if their bylaws conflict with the amended Act or the regulations.”
3. Condominium rules, bylaws and sanctions
“This fact sheet explains the difference between rules and bylaws for condominium corporations. Also looks at the requirement for notice before rules come into effect; enforcement of rules and bylaws; and notices regarding non-compliance and notices of sanction.”
4. Condominium documents for owners, mortgagees and prospective purchasers
“This fact sheet explains the requirement for condominium corporations to keep specified documents, and to make these documents available to condominium owners, purchasers and mortgagees upon request. Also explains when fees may or may not be charged for certain documents.”
5. Insurance premium increases
“This fact sheet looks at the rising cost of condominium insurance, the government’s role regarding property insurance, and what condominium corporations and owners can do in response to these rising costs.”
6. Standard insurable unit description
“As of January 1, 2020, condominium corporations must provide a standard insurable unit description (SIUD) to their insurance provider and all unit owners. The SIUD is a description of what the corporation’s insurance will cover. This fact sheet explains how to create a SIUD, and the information that it should include.”
7. Resolving condominium disputes
“This fact sheet looks at the steps condominium owners can take to resolve disputes with condominium boards, and with condominium managers.”
8. Condominium unit rentals
“This fact sheet looks at the responsibilities that condominium owners have to their condominium corporations that must be met before renting.”
What’s next for Condominium Property Act and when does phase 3 start?
While no date has been set for the introduction of Phase 3 of the Condominium Property Act, there are details available for what it will entail.
Phase 3 of the Condominium Property act is focused on education and licensing for condo managers. This is welcome news at Magnum York … we have licensed Property Managers on staff and have been providing diligent property management services for almost 30 years.
The task to create a working education and licensing program for condominium property managers falls to the Real Estate Council of Alberta (RECA) Visit RECA: Condominium Manager Regulation Consultation for more info.