Owner

Owning a Condominium in New Brunswick: What do I need to know?

The popularity of Condominium living in New Brunswick is growing in leaps and bounds. Since 2004, the number of Condominium units in the province has increased by 54 per cent.

To properly reflect this growing market, the New Brunswick government has updated and modernized the Condominium Property Act to better protect you during the approval, purchase and sale process. The new Act will take effect on January 1, 2010.

If you are new to the Condominium market, you probably have a lot of questions about how it all works. Not to worry. We’ve got all the information you’ll need right here:
 

Condominium Property Act  CHAPTER C-16.05

• Condominium Property Act
• NB regulation 2009-169

Canadian Mortgage and Housing Corporation (CMHC) has a Condominium Buyers’ Guide which provides a great general overview on buying a Condominium and identifies the kinds of questions you should be asking.
 

The Condominium Property Act sets out the rules for operating and managing Condominiums in New Brunswick. The current Act from 1969 will be replaced by a more modern Act on January 1, 2010. The new Act contains a framework created to better protect consumers during the approval, purchase and sale process for Condominiums.

The new Condominium Property Act will make Condominium development fairer, safer and more in line with other Canadian jurisdictions. Increased transparency throughout the purchase and sale process will balance the responsibilities of developers with the rights of consumers. The Act is also designed to provide the essential tools for a Condominium Corporation to successfully administer a Condominium.

Check out these FAQs on the Condominium Property Act for more information.
 

Contrary to popular belief, a Condominium is a type of ownership, not a type of building. Condominiums can be any type of housing, such as apartment-style units, townhouses or even commercial space.

With a Condominium unit, you individually own your unit, and you share ownership of the common area with the other unit owners. Sometimes, parts of the common property like balconies, parking spaces and storage lockers are dedicated to the exclusive use of particular owners. The exclusive use is a right and not ownership.

For more information, check out these FAQs on Condominiums and their Ownership.
 

A Condominium complex is a small, dynamic community of people living in very close quarters. To ensure the smooth running of the complex and the happiness of the residents, the community must work together to govern the complex appropriately and the residents must live within the rules set out in the by-laws.

Every Condominium has a Condominium Corporation, a legal entity set up to manage the Condominium’s property and business affairs. Condominium Corporations are exempt from the Companies Act and Business Corporation Act. The declaration is its charter document and is regulated by its by-laws.

Every owner in the Condominium complex is a member of its Corporation. As an owner of a unit, you have the right and obligation to vote on matters presented at any general meeting, as well as changes to common property, regulations and by-laws.

The Declarant (the developer) must provide the Corporation with all necessary documents for its operation when he or she ceases to own a majority of the units. The Corporation is responsible for keeping all corporate records, including the declaration, description (plans), by-laws and any other documents deemed useful for the Condominium’s operation. The Corporation must also keep financial statements for the current year, as well as the previous six years.

Take a look at these FAQs on Condominiums and their Governance for more information.
 

As you can imagine, there are numerous costs and expenses associated with running a Condominium complex, as well as maintaining and repairing the common property. These costs are covered by two mandatory funds:

Operating Fund – The day-to-day costs, such as insurance premiums, snow removal, gardening, property management fees, maintenance and repair, are covered by Condominium fees, a monthly fee that each Condominium owner must pay to cover their share of the common expenses. Fees are generally set based on an estimated annual operating budget for the complex.

Reserve Fund – Major repairs and replacements, such as getting a new roof or painting the exterior of the building, are covered by a mandatory reserve fund, which is typically funded by a portion of each owner’s Condominium fee. The contribution amount is determined through a reserve fund study, which seeks to anticipate any major repairs or replacements needed in the next 30 years, and estimates a budget appropriate to cover those costs.

Self-sufficiency a priority
The Corporation may not take out a mortgage for maintenance, repairs or replacements of the common property – they almost always have to be funded through Condominium fees. If the operating budget or the reserve fund doesn’t have enough money for unforeseen expenses, Condominium owners may be asked to pay an additional fee called a special assessment to cover the shortfall.

For more specifics, please see the FAQs on Condominium Fees, Reserve Funds and Reserve Fund Studies.
 

Condominium living can be a great choice for those who are looking to get into the real estate market in more expensive areas, and those who don’t want the responsibility of day-to-day maintenance. But it’s not for everyone. Community living and group decision-making can be a drawback for some.

If you are considering buying a Condominium, start by doing some research. Find out if it is a new development or an existing Condominium. If it is an existing complex find out how the complex is run and financed. Talk to other owners, the manager or a member of the Board of Directors.

Next, you may want to learn a bit more about the process of buying a Condominium:

• Buying a New Condominium from a Developer
• Buying a Conversion
• Agreement of Purchase and Sale
• Buying a Previously-Owned Condominium
• Estoppel Certificate

Find out more with these FAQs on Buying a Condominium.

Buying a New Condominium from a Developer

If you are buying a new unit from a developer, make sure you find out what work still needs to be done on the Condominium development and what the expected completion date is. Ask the developer for copies of:

• The agreement of purchase and sale
• The proposed declaration, and proposed bylaws
• A plan showing the development and the unit.

Sometimes, Condominiums are developed in phases or over time. If this is the case for the Condominium you’re interested in, be sure to review the phased development disclosure statement in the declaration.

Buying a Conversion

A conversion is when a previously existing building, like an apartment building, is converted into a Condominium. Buying or selling a conversion in the early stages of development is similar to buying a new Condominium, except that the exterior of the building already exists and repairs might be needed at an earlier stage. This will require a critical decision on how to build the reserve fund.

As with new Condominiums, everyone should be aware of what work still needs to be done on the Condominium development and what the expected completion date is. The developer should provide the buyer with copies of:

• The agreement of purchase and sale
• The proposed declaration and proposed by-laws
• Included in the agreement of purchase and sale should be a copy of a reserve fund study (if 11 units or more) or building inspection report (if 10 units or less).

Agreement of Purchase and Sale

For the purchase of a new Condominium or a conversion, an agreement of purchase and sale is the contract used to outline the details of the sale. It’s a good idea to consult with a lawyer before you sign an agreement so that you are fully aware of all of the provisions in the agreement and there are no surprises down the road.

You can cancel an agreement of purchase and sale with the seller by giving them written notice. The notice must be given within 10 days of receiving the signed agreement. The seller must then promptly refund any deposits without interest.

Buying a Previously-Owned Condominium

When you buy a previously-owned Condominium, you should obtain and examine the following documents before you make an offer:

• Condominium plan
• Certificate of title for the unit
• Information about any restrictive covenants
• Declaration and by-laws
• Estoppel certificate
• The phased development statement, if appropriate.

The seller, real estate agent, Condominium Corporation or your lawyer can help you track this paperwork down. It’s a good idea to consult with a lawyer on these documents.

Estoppel Certificate

An estoppel certificate is a signed statement from the Condominium Corporation that certifies that the documentation and or information they have provided you for the purchase of a unit in their complex is accurate.

Among other things, the estoppel certificate tells you:

• The current Condominium fees for the unit and when it gets paid
• If there are any Condominium fees that remain unpaid by the current owner
   

Living in a Condominium can be quite different from living in a house or apartment. Because you share ownership of the common areas in the complex, the owners must make decisions together about the running of the Corporation. This unique ownership has implications in a number of areas:

• Your Rights and Responsibilities
• Rules, Regulations and By-Laws
• Taxes and Insurance
• Repairs and Maintenance
• Resolving Disputes

Your Rights and Responsibilities

When you own a Condominium unit, you have the right and obligation to vote on matters affecting unit owners. You also have the right to use the common areas; get information on the management or administration of the Corporation; and use arbitration to resolve disputes.

As an owner, you must abide by the Act, regulations, by-laws and general rules; attend general meetings and read the minutes; maintain your own unit; and pay all Condominium fees on time. As an owner, you also have the responsibility to participate in the governance process for your own and other owners’ benefits.

Rules, Regulations and By-Laws

Every Condominium is governed by its own unique rules, regulations and by-laws. There may be rules regarding the number of occupants per unit, pets, noise, parking and when certain amenities may be used. In most cases, you can rent out your Condominium, but check the by-laws to be sure.

Many Condominiums have strict rules about altering the unit space or appearance. Additionally, you may need to get permission from the Board before you can do things like change exterior fixtures, install a satellite dish, set up a clothesline or put an air-conditioning unit in your window.

Taxes and Insurance

You will need to pay municipal taxes on your Condominium unit and your share of the common areas. The current taxes should be noted in the purchase documents, but it’s a good idea to check with the municipal government to confirm that figure.

Repairs and Maintenance

One of the great things about Condominium living is not having to shovel snow or mow the lawns. Day-to-day maintenance and repair of the shared areas like hallways, exterior walls and grounds are managed by the Board of Directors on behalf of the Corporation. Each owner shares in these costs by paying a monthly Condominium fee.

You are simply responsible for the repairs and maintenance within your own unit. This could include plumbing, appliances, and heating or electrical systems that are in your unit and used only by you.

Resolving Disputes

In an environment where people live very close to one another and group decision-making is necessary, there can be, from time to time, disputes that arise between owners, the developer, the Corporation, an employee of the Corporation or a Director.

If you have a dispute with someone, speak directly to them and try to resolve the problem. If the conflict involves the by-laws, the Act, the regulations or the Corporation, you can file a written complaint with the Board of Directors. Mediation and/or arbitration can be used as an alternative to court action if the dispute remains unresolved. The party will need to apply to the Director to appoint an arbitrator.