Our Encounter with a Troll - A Condominium Story

The Internet Troll - A Lesson on Condo Disclosures

Recently a troll attacked one of our listings and a Nice Agents team member on Facebook. This troll claimed we were not being transparent about the financial state of the condo association for our listing. Because the fees were higher than she wanted them to be, she assumed we were hiding something or somehow being dishonest.

Let’s clear the air; the fees on this condo were not unreasonably high. It was just the troll’s uneducated opinion. 

What the troll doesn’t understand is that condo associations in Alberta are governed by very strict laws and regulations that require an extremely high level of disclosure, competence, and diligent accountability. Condos in Alberta are governed by the Condominium Act of Alberta and condo managers are licensed & monitored by the Real Estate Council of Alberta.

FINANCIAL DISCLOSURES

A condominium association must maintain clear & current financial statements which must be audited by an independent accountant on an annual basis. The accountant must perform the audit in adherence with the strict accounting regulations required in Alberta. 

The associations are required to disclose any financial information, expenses, and upcoming expenses facing the association. All meetings of the board must be minuted, and those minutes made available to owners and potential buyers. The whole association must hold an Annual General Meeting where the board presents an annual budget and financial review to all owners.

When buying a condo the association provides the budget, the most recent audited financial records, the current balance sheets for all bank accounts & assets, and the minutes of any and all recent meetings of both the Board and the Association.

THE RESERVE FUND STUDY

Every condo association is required to maintain a Reserve Fund. This is a savings account that is built up over time for capital repairs to the property, such as roofs and fences and sidewalks. Each association must clearly define what the reserve fund will, and will not, maintain and pay for. 

In Alberta condo associations over 12 units must also have a Reserve Fund Study done every 5 years. This document is an engineering assessment of the entire property that details anything that the reserve fund would have to pay to repair or replace. All of these items are detailed and scheduled based upon their life expectancy. Then the engineering firm projects the cost expected to replace them, and budgets how much the owners need in their reserve fund to pay for all of these repairs. A Reserve Fund Study in Alberta projects maintenance, repair, and replacement for the next 25 (or more) years. The Alberta Government requires that all condo associations have an updated reserve fund study done every 5 years. 

Part of the reserve fund study always includes the projected expenses and size of the reserve needed to meet those expenses. Suggested contributions are included in the report, allowing buyers to see the costs they will be facing. 

SUMMARY

In Alberta a condo association must provide incredibly deep information to prospective buyers, allowing buyers to make an educated decision on the purchase of a home in that association. By comparison when buying a single family home or duplex there is no financial records provided and no reserves are in place to pay for repairs to the property. 

Alberta condos provide audited financial reports, full disclosure of the happenings within the association, and an in-depth engineering report of the structure and protected expenses. 

The Troll’s accusation that there is a lack of transparency clearly showed how unknowledgeable they really are about condominiums in Alberta. This is why it’s always best to work with a professional real estate agent, someone who’s familiar with condominiums and the rules surrounding them. There are well trained professionals whose business it is to review condo documents and advise you on if you should, or should not, be purchasing a condo in a particular building or association. We recommend hiring them to review the documents relating to the condo you are considering purchasing. 

It’s always best to hire good professionals, and remember that internet trolls are never reliable advice.