On November 27, 2019 Minister Glubish made the announcement about Alberta Condo Regulation Changes that will take effect on January 1, 2020.

For condo Owners who aren’t aware, advocates over the past several years have been pushing the Alberta government to amend present Condo Regulations to enhance consumer protection in order to swing the balance of scales/power between Condo Boards and Owners and create an equal playing field for both parties.  It is/was argued by advocates that the Regulations greatly favor Boards and that Owners have very little recourse against rogue Boards who sometimes may engage in unfair and bullying practices. The new Regulations – as written – still appear to greatly favor condo Boards.

Now that the Regulations will be changing, the question many are wondering:

Do these Regulation Changes even matter without Enforcement and Tribunal? 

We at COCOA, receive many emails from owners in distress who have a variety of problems ranging from:

1)  Document access and fees.
2)  Illegal/unfair fines and caveats.
3)  Nowhere to go to complain about condo managers who won’t respond to requests.
4)  Proxy shopping and fraud to prevent certain Owners from getting onto the Board and to solicit signatures for the purposes of passing bylaws or resolutions in a quick manner, without proper consultations/feedback from Owners occasionally.
5)  No affordable means to hold their Boards to account to follow the Condo Act – their mandate.

And the list goes on.

We at COCOA are grateful to the team at Service Alberta (SA) who worked tirelessly on this file to bring all feedback received to previous and current Ministers of SA and to finally present a draft of what was supposed to “enhance” Consumer Protection.  We also thank the current Minister for moving this file to completion. Having said that, we have seven concerns (among more) that have not been alleviated with these Regulations and sadly we do not see the balance of power that could have easily been formed between Owners and Boards. These concerns remain:

1.  Document fees.  Although capped in some instances, still open the door for management companies to charge on other ends. For example, raising management fees, new admin fees for answering emails/calls, charging increased Special Assessment calculation fees, increasing costs for meeting attendance, chairing AGM’s and other new ways of recouping any lost document fees.  Also, by allowing a contract with a third party document provider, increased fees may be allowed as long as they are under their contract. (Sec 4.b).  This may negate the purpose of capping document fees. What did we gain here?
2. 60 Day Meeting Notices and adding Items in advance to Agenda removed.  This has long been a plight of Owners who have been unsuccessful at bringing up issues at an Annual General Meeting (AGM) and having an opportunity to vote on them.  Some managers claim that allowing Owners to add Agenda items in advance can make AGM’s lengthy, however, Agenda items are typically voted on at the beginning of meetings, therefore Owners can vote to strike Agenda items and this will shorten up meetings.  The problem with not allowing Agenda items ahead of time is that some Owners can be silenced, Boards can adjourn the meeting quickly and this negates the purpose of previously written Regulations to give Owners a voice to be heard.
3. Sanctions. The corporation now may charge a whopping sanction of $500 (previously $250) for a first breach of a bylaw and $1000 per week for continuing to breach same bylaw without any cap.  (Sec 73.8.1. 2).  Although sanctions are not allowed for breach of a “rule” (Sec 73.81), it appears to us that sanctions may be permitted to be levied on a rule through the corporation’s bylaws (Sec 73.7,3 (d)). This is dangerous territory and will be open to abuse, as is the case in some corporations already and could be used to circumvent bylaw changes through Special Resolutions.
4. Proxies. The use of proxies is still permitted. Although a slight improvement as to “who” may hold a proxy, the troubling section is 31.2, 3. How will Owners know if a proxy was given to a manager (prohibited party) for the purposes of establishing a quorum? (Only allowed purpose for manager to hold proxy). What verification method will there be to know that a manager did not obtain a proxy for the purposes of giving to a Board member who wishes to retain a seat or another favored Owner?  Although a board can establish “rules” to make this clear, this certainty could have been nailed shut in the Regulations.
5. Standard Insurable Unit Description (SIUD) and Insurance.  An SIUD may now be passed by the corporation through a Board Resolution, Ordinary Resolution or Special Resolution.  Our position is that an important decision such as unit description which will increase costs for all Owners, should – at the minimum – be passed through an Ordinary Resolution so that Owners can participate and take a majority vote on this process.  By allowing the Board to pass this alone, this may cause unknowing or absentee/vacationing Owners to have no say or input into this important decision and only be able to change it if a Board calls a meeting of Owners. As for insurance, a few red flags, but one that stands out is the ability of the Board, through bylaws, to define an insurance deductible as a “Contribution” as per Sec 39(1) of the Act.  This means that if the corporation levies an amount against an Owner with respect to an insurance claim, they can now place a caveat on a unit which can in some cases lead to foreclosure. We object to allowing this definition through bylaws.
6. Licensing of condo managers. Although a new administrator has been appointed to oversee the operations of Real Estate Council of Alberta (RECA) and we are told that licensing and education of condo managers are proceeding, there has been no given timeline estimate.  Currently, managers are not regulated in Alberta and run on a “free market” contract basis, many unqualified to manage millions of dollars in real estate.  We worry that without a timeline, there will be ample time for current trade groups to lobby the government and possibly derail this process once again, leaving Owners with no where to go to file complaints or hold professionals to account.
7. No Tribunal timeline. For years, condo Owners have been begging the Alberta government to establish a Conflict Resolution Tribunal (CRT) in order to have affordable means to settle disputes with their Boards. Currently, in order to seek any recourse against the Board, an Owner must seek action through the court.  This is an expensive proposition and not a feasible one.  For reality’s sake, if an Owner cannot get access to documents, is it fair them to go to court and spend hundreds of dollars on a claim in order to receive $10-$500 worth of information?  There are other instances of Owners taking corporations successfully to court which have cost them thousands of dollars and they still walked away with a fraction of their legal expenses. This article from 2013 brings back frustrating memories of how long government has been promising to establish a CRT and it’s now 2019 and we are still waiting.

As fierce advocates for condo Owners in Alberta, COCOA has been in very clear communication with government about these issues and our suggestions for possible solutions based on real-life difficulties faced by Owners.  Owners email us frequently with issues ranging from simple questions down to major distress, some facing depression, suicidal thoughts, and financial bankruptcy due to matters escalating beyond repair in their condo complexes.  The volume of emails is greater than we can handle most days.

COCOA is a private non profit organization, receives no government or trade funding and operates strictly on minimal donations from Owners.  The COCOA board consists of knowledgeable condo Owners, a professional mediator, professional condo document reviewer, condo managers and a finance professional.

Some individuals have stated that with these upcoming changes to Regulations, condos will be “better managed, improved condo living, etc.”

Sadly, we do not see how any form of improvement will take place without the government taking real and swift action in establishing an enforcement mechanism such as a Regulator of Condos or the CRT to follow the enactment of Regulations. These missing parts to Regulations have become urgent desperation.

The main voices of the stakeholders that should have been taken into account are the people who pay the bills – Condo Owners.

We remain hopeful that this government will come through on prior promises and give Owners what they truly need: Enhanced Consumer Protection and not caving to industry.

Condo Owners Council of Alberta

Media Relations:
Shelly MacMillan
shelly@condoownerscouncilab.ca

Sharon Blondin
secretarycocoa@gmail.com