Condo Document Review for Buyers

When shopping for a condominium home it is important to investigate how the condominium corporation functions. The corporation that you become a member of when you own a condo has responsibilities that are legally prescribed in the Condominium Property Act and the bylaws for the specific condo corporation.

When you are a member of a condo corporation in Alberta, you benefit from any assets and are responsible for any liabilities that the corporation has at the time you buy your condominium home. It is with this in mind that we designed the Condo-Check document review service in 1994. Little things, often hidden indiscriminately in a simple document and invisible to inexperienced reader, are in fact, clues to possible problems. With a 33 year history in the condominium industry, our document review consultants have found many clues in the documents and in return saved buyers stress and money.

Case 1

Buyer has written an offer on a town home style condominium, subject to a Condo-Check review, which was completed in January 2008. The buyer had 2 golden retriever, prize winning show dogs. The bylaws stated that, without cause, the board could withdraw their approval for an owner to have a pet. Is this important to know as the owner of these show dogs?

Case 2

The review of the financial information provided to us showed that this 15 unit apartment condo corporation would “Special Assess” the owners on an as needed basis. The owners had been assessed every year for the past 6 years to acquire enough money for the board to simply patch things as they happened and cover the shortfall in their annual budget. They had not increased the owners’ monthly contributions for better than 5 years. Each year the budget falls short and the owners are called upon to contribute. Also, there was no long range plan for replacement of the capital items, even though this is law in Alberta. The board of directors for this condominium felt that because there were only 15 units it was too costly to have a professional reserve fund study done, so they have not budgeted to have one done, even though they are in breach of the law. As the buildings are almost 25 years old, the capital items are beginning to lose their usable life. Our estimate for this condominium was that each owner would need between $15,000 to $25,000 within the next 2 to 5 years, plus the cost of having a professional reserve fund study and plan completed so they were in compliance with the law.

Would you want to find this out before or after you bought the unit?

Case 3

In this 26 unit apartment building, the minutes of meetings for the past year provide detail after detail of problems with the building, both structurally and mechanically. There have been several patches to stop the water from accessing the building. The mold in some the units has been removed, but not in others. The board is attempting to do these repairs over time; however, the damage is getting worse as each year goes by. When the Realtor requested the minutes for the past 12 months, he was initially provided with 8 months of minutes. There were four months missing. As it turned out, the board took the summer off, accounting for two sets of minutes; however, the Realtor was told that the remaining two months of minutes had simply gone missing and no one had copies of those minutes. Lucky for this buyer, at Condo-Check we had completed a review on this property only a few weeks earlier and had obtained all 10 sets of meeting minutes. It so happened that the two months of minutes that the Realtor was told were no longer available contained the findings of the Environmental Assessment, which stated there was ‘black” mold in the unit being purchased, and that the cost per unit to remedy this problem was going to force the board to do another special assessment. The unit being sold coincidentally was owned by a board member.

These are three cases that demonstrate the value of having Condo-Check review the condo corporation documents, before you finalize the contract to purchase the condominium home.

We don’t always have the information that is missing or stated to be “not available”; however, we have reviewed more than 10,000 condo corporations in the past 14 years and have a data base that enables us to have access to the history on thousands of Alberta condo’s when needed.

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