When you own a condominium in Alberta you typically will pay a monthly “condo fee”’. This fee is collected by your Condo Corporation to pay for the ongoing common expenses, such as insurance, snow removal, landscaping, repairs and savings for the Reserve Fund. Your share is based on the number of unit factors you own in relation to the other owners. A Reserve Fund is required by the Condominium Property Act to finance major repairs and maintenance (such as replacing the roof). Every Corporation must conduct a Reserve Fund Study every five years, to ensure the fund is at an appropriate level for future needs.
If there are insufficient funds in the reserve fund, the Corporation may increase your monthly condo fees, borrow, or levy a special assessment. Section 39 of the Act authorizes the Corporation to raise funds, including by way of a Special Assessment. An inadequate reserve fund could mean owners will have to pay a substantial Special Assessment, possibly many thousands of dollars depending on the building.
When purchasing a condo it is very important that all relevant condominium documents are reviewed before you remove your conditions. On the question of Special Assessments, you will want to devote careful attention to the financial statements, minutes of the Corporation, and Reserve Fund Studies. If a significant Special Assessment is pending, it may cause you to reconsider your offer, or negotiate a different purchase price.
Who is responsible for a Special Assessment depends on when it was levied. This is a standard clause in the AREA Condominium Contract:
4.7 Unless the Buyer and the Seller otherwise agree in writing, then regardless of when a special assessment states that it is due and payable:
(a) the Seller is responsible for special assessments that are implemented by the passing of a resolution on or before 12 noon on the Completion Day; and
(b) the Buyer is responsible for special assessments that are implemented by the passing of a resolution after 12 noon on the Completion Day.