A.  Two things guide us here. The Alberta Condominium Property Act refers to “...major repair and replacement ... that does normally occur annually.”  So grass cutting, snow shovelling, light bulb replacement, and the like are not included because we know that they will be needed every year.
Second, we deal with that word “major.”  Here we consider the size of the expenditure relative to the overall budget of the Condominium.  For instance, the replacement of a number of pre-cast parking curbs at a total cost of say $500 would be a major expense to a four-plex and should be included in the reserve fund calculations, whereas the same work carried out at a shopping mall or a high-rise apartment would be considered too small to bother going into the reserve fund. 

A.  The penalties are only those inflicted by the marketplace.  There are no Condo Cops checking on condominium corporations, but there are a growing number of knowledgeable real estate agents and conveyancing solicitors who are asking questions on behalf of their purchaser-clients:  Has anyone given you a statement of the reserve fund balance?  May we see a copy of the reserve fund study? 
Far more effective than any governmental enforcement agency is the anger of an owner who can’t sell his unit because the condominium’s board has been unable to provide an accounting of a sustainable reserve fund. 

A. In Alberta, the Condominium Property Act refers to a “qualified person,” as defined in Regulation 21(1).  In cases of properties with not more than 12 units, the condominium corporation is permitted to carry out the functions of a “qualified person.”

A. No.  We recommend that your reserve fund be invested in high-grade securities.  Whether it be your bank, financial planner, or investment broker who handles the money, they should be instructed that security of capital is your primary concern.

 

A.  The plan is effectively a 25-year capital spending budget formally adopted by the condominium’s board of directors pursuant to Regulation 23(4) of the Condominium Property Act.  (The reserve fund plan is not to be confused with the registered plan which is the drawing, or the map, illustrating the location of each condominium unit in relation to the whole, and is registered with Land Titles Office.) 

The report is the signed report submitted to the condominium’s board once the study has been completed. 
The study is a written description of the depreciating assets of the condominium that will require major repair or replacement within 25 years, detailing age, condition, life expectancy, and estimated cost of repair or replacement.  The study also lays out a long-term budget showing how much cash will be required and when, and what level of contributions to the fund will be required to maintain solvency.  Or to put the whole thing in chronological order:

1. The reserve fund planner prepares a written study of the depreciating assets of the condominium.
2. The planner submits his study to the Board, along with his signed report.
3. The Board, after reviewing the study and the report, passes a motion adopting a plan, which is binding on the condominium until the next study is prepared, five years hence. 

 

A. On new construction, you have two years from the date the condominium title is registered.  On conversions (existing properties being converted to condominium title), the reserve fund study must be completed prior to the sale of the first unit.  Once the first reserve fund study is done, a new one must be completed every five years.

 

A. I don’t know, but by talking with tradesmen, referring to industry costing manuals, and looking  back on your records and ours, we can make an accurate estimate.  The cost is then adjusted for inflation, again at an estimated rate. 

 

A.  Some day, someone will provide a full and complete answer to that question, but not until that person has time to write a book.  In the meantime, here is my two-minute synopsis.

Originally, bare-land condominiums were just that – plots of land on which a trailer or motorhome could be parked.  The only common assets were typically a road, some utility lines, a fence, and perhaps an office or clubhouse.  The only measurements needed by the surveyor in preparing the registered plan were land boundaries. 

In the meantime, developers of condominiums like yours were faced with a dilemma.  Before they could sell their projects as condominiums, they needed a registered plan.  A surveyor can only file a plan that includes a structure if the structure is there.  He or she needs walls to measure to.  All very well and good, unless the developer plans a 100-unit project but knows the market can only absorb 25 or 30 units a year.  He likely can’t afford to build 100 all at once knowing it may well take three years to sell them all.   Ideally, he would like to build his 100-unit project in phases.  With a bare land condominium he can do that, as long as he builds each individual unit – in your case townhouse -- within the boundaries of the bare-land condominium unit as shown on the registered plan. 

This idea has caught on but leaves in its wake any number of complications for owners, boards, lawyers, and reserve fund planners.  Bylaws must be carefully crafted to deal with such items as roofs, eavestroughs, and siding; none of which are either “bare land” or “common property” within the generally understood meaning of the terms,  but by any reasonable measure must be treated as common property if the overall appearance of the property is to be maintained.

Hopefully this provides some measure of answer to your question, but you can be sure that the topic will continue to generate discussion for many years to come.