Special Obligations 

The standard REPC requires you to provide the buyer with an Estoppel Certificate.  The Estoppel Certificate indicates, among other things, whether or not your condominium fees are paid up to date and is typically provided by the Condominium Corporation’s management company.  The management company will charge a fee for us to obtain an Estoppel Certificate on your behalf.  The standard fee assessed by the management company is not included in our all-inclusive fee.  If we do not give the management company sufficient time to provide us with an Estoppel Certificate, they sometimes assess a rush charge.  These situations normally arise when we are not retained until the 11th hour.  In these circumstances, any rush charges will be added to your bill.

Production of the Estoppel Certificate can often delay closing. To avoid rush charges, contact us as far in advance of your sale as possible so that we can order the necessary Estoppel Certificates without the need to pay rush fees.

Many sellers are concerned about the necessity for this document when they have already provided extensive condominium documents to the buyer.  Although the condominium documents provide valuable information regarding the Condominium Corporation and what it may be like to live in the condominium complex, they do not confirm that all condominium fees are paid up to the completion date.  All major lenders require an Estoppel Certificate prior to funding the mortgage.  Buyers are also concerned that all fees are paid.  Accordingly, you are required to provide the Estoppel Certificate to a buyer.

If you are selling a condominium and your condominium board has passed a resolution which issues a special levy or special assessment against the owners of individual condominium units, we recommend addressing how those special assessments will be dealt with directly in the REPC.  For example, will the special assessment be adjusted pro rata based on the period of time in which the buyer and seller have lived in the property, or will the buyer or seller individually be responsible for such assessments.  Sometimes special assessments are levied over a period of time, such as payment by installment over a number of years or months.  You should consider how you wish to deal with these special assessments prior to listing your property.

Condominium Fees

All condominium fees must be paid up to and including the Completion Day.  It is the seller’s responsibility to pay all condominium fees when they are due.  As your lawyer, we will then recover the buyer’s share of the monthly fees as part of the closing.  For example, if your sale closes on the 5th day of the month, you must pay the monthly fee in full, even though your portion is quite small.  You are not entitled to only pay a portion of the monthly fee at the beginning of the month.  You pay the entire amount and we recover the buyer’s share.

Sometimes, the condominium board of directors will determine they require special extra payments to pay for needed repairs and upgrades.  These are called special assessments.  As the seller, it is your responsibility to disclose to the buyer everything you know about any upcoming special assessments.  Payment of these assessments can then be negotiated between the parties.  When the special assessment has been put in place prior to the Completion Day - even where money is not payable until after the Completion Day - the buyer will press to have the seller pay this amount.  The seller may take the position that the assessment is to pay for future improvements that only the buyer will enjoy and the buyer should pay the special assessment.  It is important to disclose the special assessment well in advance of closing so that an agreement can be put in place between the buyer and the seller regarding payment of the special assessment.

Bare Land Condominiums

The standard Alberta Residential Real Estate Purchase Contract exempts the production of a Real Property Report (RPR) for condominiums unless it is a bare land condominium.  What is the difference between a regular condominium and a bare land condominium, and, how does this difference lead to the requirement for an RPR for certain condominiums (bare land condos)?

There are two type of condominiums defined in the Condominium Property Act.  In the style most people are familiar with, the size and dimensions of individual units are defined by walls, floors and ceilings.  All apartment-style condominiums use this method to determine the size of the unit.  The other type of unit is defined by the size of the lot that the building sits on.  For example, in a project with a series of single family houses or duplexes, if the size of the particular unit is defined by the dimensions of the building only, this is a conventional condominium.  If the size of the unit includes the yard surrounding the building, this is a bare land condominium.  When looking at the plan for a bare land condominium, the drawing will only show individual lots or bare land and will not show any buildings.

When buying a bare land condominium, it is important to determine whether the building that sits on the lot is in fact properly located.  No one wants to purchase a bare land condominium lot thinking they are buying a living unit and then discover the living unit is in fact partly built on the neighbor’s land.  Hence, the requirement for an RPR on bare land condominiums.