The Basics

September, 17 2020 - CCI Original Content Published by CCI National

Part 1: Introduction – Director Basics

Introduction: Congratulations on becoming a Condominium Director! Directors make a significant community contribution and this course will improve the level of professionalism you can offer to your community.

Introduction

Congratulations on becoming a Condominium Director! Directors make a significant community contribution and this course will improve the level of professionalism you can offer to your community. This introductory course offers insight into the basics of Condominiums and is recommended in conjunction with other courses offered by the Canadian Condominium Institute. Various Condominium experts will be sharing their knowledge and drawing on their real-life experiences. Essential operational concepts are presented to provide structure and insight into the role of Director.

Learning Objectives

Upon completion of this session, participants will have a basic understanding of the following:

  • Governance and Condominium terminology
  • Directors responsibilities
  • How Condominiums are managed
  • Basic financial overview
  • Legislation that affects Condominium Corporations
Condominium Terminology

The following terms are condominium-related terms that are used in the provinces subject to common law in Canada. Terms may vary by Province. A list of Canadian Condominium Legislation from Coast to Coast can be located at the National Resource Centre.

Act: The provincial condominium legislation that creates condominiums and outlines how they are to be administered. The name varies by province: Condominium Act, Condominium Property Act, Strata Plan Act.

Board of Directors: The governing body whose responsibility it is to ensure the smooth running of the condominium corporation. The directors are generally elected by, and from amongst, the unit owners.  

Building Assessment Report: See Performance Audit.

By-law: One of the governing documents for the corporation which supplements the Declaration or Condominium Plan, covering the day-to-day operational aspects of the Condominium, and outlining the responsibilities of the Board of Directors. By-laws can be created or revoked by a majority vote of the owners, voting percentages are dictated by Provincial Legislation.

Common Elements: Refers to all of the property of the Condominium excluding the units (e.g. recreational facilities, hallways, elevators, roof, etc.).

Common Element Assessment: A monthly payment made by each unit owner to cover the maintenance of common elements and other common expenses including the contribution to the reserve fund.

Common Element Fee: See Common Element Assessment.

Common Element Rules: One of the governing documents of a Condominium Corporation, passed by the Board of Directors and generally relating to the appropriate use to be made of the common elements and units by owners, tenants and others.

Common Expense Proportion: a factor included in the declaration that defines the percentage of the common expenses that are the responsibility of a given unit.

Common Interest Proportion: a factor included in the declaration that defines the percentage ownership of the corporation connected to a given unit. This is used upon termination.

Common Property: See Common Elements.

Condominium: A type of property ownership, not a style of building. In a Condominium the owners own their units/lots or parcel of tied land (POTL), as well as an interest in the common elements. There are Standard, Common Element, Bare Land/Vacant Land Condominiums and Leasehold Condominiums, depending on the province.

Condominium Fee: See Common Element Assessment

Condominium Management Services Act: Legislation in Ontario to licence and oversee Condominium Managers.

Condominium Plan: One of the governing documents of the Condominium Corporation. The condominium plan shows the buildings and land being divided into two or more units; sets out the boundaries of the units; illustrates the common property; and includes a unit factor schedule. In some provinces, the description also includes the architectural and structural drawings.

Condominium Corporation: A legal entity that is created at the time of registration, and whose members or unit-owners are the building owners. The mandate of the Corporation is to manage the property and any other assets of the Corporation, which is done through the election of a Board of Directors.

Contingency Reserve Fund: See Reserve fund.

Contingency Fund: Used in Nova Scotia only. Means a true contingency fund, separate from an operating fund,  reserve fund. This is different from the usage in BC, where a contingency fund is a reserve fund.

Conversion: a condominium constructed in a building that has been converted from another use. Some provinces like Ontario have special requirements for conversions with respect to warranty coverage and reserve fund planning.

Declarant: Generally, the developer of the Condominium Corporation who is the owner of the property before registration of the declaration and description (or Condominium Plan) and who, following registration, is also the owner of the individual units prior to their sale.

Declaration: One of the governing documents of the Condominium Corporation, functioning as the equivalent of its constitution. It must be filed with the description to create the Condominium Corporation. Also called Strata Plan in BC, and Condo Plan in some provinces.

Depreciation Report: See Reserve Fund Study

Description: Survey drawings which set out the boundaries of the corporation and the units.

Easement for Exclusive Use and Occupation: see exclusive-use common element.

Estoppel Certificate: A written statement that prospective purchasers of a resale unit should request, which contains pertinent information that may influence the closing of a real estate or financing transaction.

Exclusive Use Common Element: Exclusive use common elements are common elements used exclusively by one (or more) designated owners such as balconies and terraces. In some cases, underground parking spaces are exclusive use common elements, meaning only the person assigned to that space can use it, but it is the responsibility of the Corporation to maintain the whole garage. Referred to as Limited Common Property in BC.

Exclusive-Use Areas: See Exclusive-Use Common Element.

Exclusive Possession: See Exclusive-use Common Element.

Information Certificate: This term is used in British Columbia in lieu of Estoppel Certificate. This is different from a Periodic Information Certificate, New Owner Information Certificate or Information Certificate Update in Ontario.

Information Certificate Update: This certificate is issued to Ontario condominium owners if there are key changes to the information included in a Periodic Information Certificate.

Limited Common Property: See Exclusive-use Common Element.

Maintenance Fee: See Common Element Assessment. 

New Owner Information Certificate: a certificate issued to new owners of condominiums within 30 days of them notifying the corporation. It provides the latest Periodic Information Certificate and any Information Certificate Updates.

Performance Audit: A performance audit identifies deficiencies that the performance auditor believes should have warranty coverage under the terms of the Ontario Home Warranties Plan Act. The auditor compares the as-built condition against applicable codes and the building design documents. In the first year of operation, it is a requirement for any Corporation with at least one residential unit to engage the services of a qualified independent expert to perform the performance audit. The audit must be completed and filed with Tarion before the Corporation's first year anniversary of registration. Similar warranty claims are prepared in other provinces. For example, in Alberta, a corporation requires a Building Assessment report to identify defects that might have coverage under the corporation’s home warranty insurance contract. In Alberta, the regulations require this report to be obtained by the builder. In Ontario, the Performance Audit is obtained by the Corporation itself.

Periodic Information Certificate: A certificate issued to owners of Ontario condominiums twice each year that communicates prescribed information about the condominium includes such important items as the insurance deductible under the corporation’s policy, status of litigation involving the corporation, and the status of the reserve fund.

POTL (Ontario): Parcel of Tied Land means the parcel of land owned by an owner who also has an interest in a Common Element Condominium (CEC). Ontario Only.

Pre-existing Elements Fund Study: this is a special study completed for a condominium that is a Conversion in Ontario that communicates the expected reserve fund expenditures related to the pre-existing elements in the corporation.

Regulations: Regulations provide the details called for by the relevant Act. Several provinces have one or more regulations related to condominiums.

Reserve Fund: The Condominium Corporation must establish and maintain at least one reserve fund. The reserve fund can only be spent for the purpose of major repair and replacement of the common elements and assets of the Corporation. The Corporation collects contributions from the owners as a part of the owners’ monthly fees to the Corporation. Referred to as a Contingency Fund in BC.

Reserve Fund Report: See Reserve Fund Study.

Reserve Fund Study: A study that recommends the contributions to be collected from owners to adequately fund the cost of future major repairs and replacement of the common elements and assets. A reserve fund study will include an review, by qualified persons, of the common elements and assets, and dialogue with the Board of Directors and Property Management. Most Corporations follow one of the cash flows recommended on the reserve fund study in order to fund their reserve fund. Referred to as a depreciation report in BC.

Rule: One of the governing documents of a Condominium Corporation, passed by the Board of Directors and generally relating to the appropriate use to be made of the common elements and units by owners, tenants and others. Also referred to as Common Element Rules or Policies.

Section: In British Columbia only, a subset of a condominium which shares certain common elements. A section has its own council, budget and bylaws.

Special Assessment: A fee paid by all owners to cover extraordinary expenditures when the Corporation does not have sufficient funds.

Standard Bylaws: In British Columbia, the legislation sets out some standardized bylaws.

Strata: Condominium in British Columbia

Strata Corporation: See Condominium Corporation.

Strata Council: See Board of Directors.

Strata Plan: See Declaration and Description.

Status Certificate: See Estoppel Certificate.

Unit Factor: See Common Expense Proportion

Warranty Insurance Contract: warranty coverage provided to warrant against builder deficiencies. In Ontario, this warranty is provided by Tarion. In other provinces, there is a competitive market for this insurance.

DISCLAIMER, USE INFORMATION AT YOUR OWN RISK

This is solely a curation of materials. Not all of this information is created, provided or vetted by CCI. Some of the information is only applicable to certain provinces. CCI does not make any warranties about the reliability or accuracy of any information found in the materials on this website. The information is not updated to reflect changes in legislation or case law and therefore may not always be current and up-to-date. We suggest you seek professional advice with respect to your specific issues or regarding any questions that arise out of the material. We will not be liable for any losses or damages in connection with the use of any of the material found on the website.

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