Condo developers in Alberta will have to set firm move-in dates for buyers and be prepared to refund deposits if they miss those deadlines under new condo regulations unveiled Thursday by the NDP government.
Service Alberta Minister Stephanie McLean announced the changes Thursday in Calgary, saying they will be good for both condo buyers and those who build and sell them.
McLean says the new rules include:
- A new onus on developers to stipulate a final move-in date. If that date is not honoured, buyers will have the option of re-negotiating contracts or getting their deposits refunded.
- Deposits will now have to be held by a lawyer while the condo is being built.
- Details such as floor plans and finishes will have to be written into contracts.
- Developers will be required to provide more information to new condo boards — such as building plans and tax records — for a smoother transition to the owners.
"We are also preventing fee shock, by requiring developers to give you a realistic estimate of condo fees that you can expect to pay when you move in," McLean said.
If an estimate is off by more than 15 per cent, the seller must cover that difference for the first year.
"We believe Albertans deserve to be protected when making a purchase, and no purchase is more important or large than buying a new home," McLean said.
"With these protections come consumer confidence."
She says the province held a series of consultations in Alberta's five largest condo markets to make sure the changes benefit buyers, developers and builders.
Developer praises new rules
Changes to the Condominium Property Amendment Act in 2014 gave the province the power to regulate and make other changes.
Jade Mahon, a vice-president at Partners Development Group, said the new rules are a win-win for buyers and sellers.
"We know that these regulations will enhance consumer confidence and their security in making such a large investment in their home, therefore increasing homeownership in the marketplace," she said.
"When we have strong regulatory frameworks, consumers and businesses prosper together."
The province is now conducting an online survey for one month to get feedback on the next set of new rules, which will affect the way day-to-day condo operations are regulated, McLean says.
These rules could address such things as the way meetings and votes are conducted, what qualifications are needed for property managers and whether tribunals should be created to resolve disputes outside the courts.
"We will use the feedback to help draft new rules, with the target of bringing them into effect next year," she said.
A national condominium association says the changes makes for a more balanced relationship between developers and new owners.
"This is actually sorely needed and we are really, really pleased that this has come forward," Anand Sharma of the Canadian Condominium Institute, North Alberta Chapter told The Homestretch.
"Currently developers have a major hand in what these purchase agreements look like and they are tilted in their favour and people get stuck with un-built condominiums for many years in some cases, without a way of getting out of their contract."
Sharma says new owners would sometimes fall for sales pitches.
"This levels the playing field a little, but for new potential owners. In the past it was buyer beware, and now it's still buyer beware but there is some balance," he said.
"In an attempt to sell a condominium, developers would low-ball condominium fees and short-change the owner's condo boards and set unrealistic expectations for new owners."
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With files from The Homestretch