Madam Chair, I am pleased to appear before the committee to review Bill 2, An Act to Amend the Condominium Act.
This bill would bring the Condominium Act up to date. A number of amendments were made to address specific issues since the act was first passed in 1969 and the first condominiums were established in 1986, but a thorough review of the act had never been undertaken.
With this in mind, the Department of Justice developed a consultation paper in the fall of 2005. The paper was made available on the department's website and a copy was distributed to numerous stakeholders, including condominium owners, developers, management companies, real estate agencies and lawyers. Last spring, public meetings were held to discuss the proposals in communities that currently have condominiums: Yellowknife, Inuvik and Hay River. Public feedback indicated wide support for the proposed amendments. In addition, the consultations identified further changes that have been included in this bill.
A number of important amendments support the principle of consumer protection. While this legislation recognizes decision-making should be left to the owners because condominiums are privately owned buildings, there is also a need for owners, purchases, lenders and tenants to have the information necessary to make informed decisions.
Fundamental to the review of this act was issues relating to the capital reserve fund and the adequacy of such funds. This bill addresses several critical aspects:
- • every condominium would be required to establish a capital reserve fund;
- • a condominium would be required to conduct a reserve fund study every five years to assess the long-term needs of the condominium and develop a comprehensive plan to repair or replace depreciating property; and
- • the reserve fund study and plan, as well as other relevant material, would be provided to owners in advance of the annual general meeting, and the reserve fund would be a mandatory agenda item at the meeting.
Decisions regarding the amounts to be contributed to the fund would remain with the owners but these requirements will help ensure that owners are able to make knowledgeable decisions in this regard.
Further significant amendments to the act provide for:
- • improved disclosure of information to owners, purchasers, mortgagees and tenants;
- • a more orderly transition of ownership from the developer to the eventual purchasers of a new condominium, including protections for tenants on the conversation of rental accommodations to a condominium;
- • a more appropriate balance in respect of the majority of owners required to terminate a condominium or amend the plan, declaration and bylaws; and
- • the option for developers to develop condominiums in phases or for two or more condominiums to amalgamate.
I would like to thank the Standing Committee on Social Programs for its review of this bill. I look forward to responding to any questions the committee may have.