Suspended: Condo Time Frames and Rights of Entry
UPDATE: The Ministerial Order will expire on August 14, 2020 unless it is terminated prior to that date.
by Erin Berney (Field Law)
Condominium corporations face particularly unique challenges due to the effects of COVID-19 restrictions on public gatherings, among other things. In response to these public health restrictions, the Minister of Service Alberta, the Honourable Nate Glubish, issued a Ministerial Order on April 9, 2020 that temporarily suspends a host of time frames and other requirements under various statutes, from the Business Corporations Act to the Vital Statistics Act. The Condominium Property Act and Regulations were also included in this Order, which can be viewed in its entirety here: Ministerial Order SA 009/2020.
Among the expected changes were suspensions of requirements for condominium corporations to convene an Annual General Meeting (AGM) within fifteen (15) months from the date of the last AGM (Condominium Property Act section 30). The ability of a unit owner to compel a Special General Meeting (SGM), and the corresponding obligation of the condominium corporation to convene an SGM in response to an owner’s petition, were likewise suspended (Condominium Property Act section 30.1). Where the corporation has been forced to delay an AGM due to COVID-19 (including an AGM required for turnover from the developer), the Board of Directors, or interim Board as the case may be, is deemed to continue serving in the meantime.
The Ministerial Order expressly provides that the suspension does not preclude the corporation from convening either an AGM or SGM remotely, via means not requiring in-person attendance (such as by video or teleconference). Practically speaking, however, conducting a large AGM or SGM by video conferencing technology presents several challenges, not least of which includes verifying attendance by actual unit owners, certifying proxies, confirming attendees’ eligibility to vote on resolutions, and calculating results. In my experience, technologies like Zoom and Microsoft Teams are susceptible to disconnecting attendees at various points during the meeting, making it difficult to ensure that the requirements for a fair and just vote have been met.
The Ministerial Order permits condominium developers to delay occupancy of newly constructed units beyond the final occupancy date set out in the purchase agreement due to the COVID-19 pandemic. As with many pieces of legislation we have seen being modified in recent days, “pandemic” was not originally included in the list of circumstances considered to be beyond the control of the parties in a condominium purchase. Thankfully, it has been added by virtue of this Order. As a result, should a condominium developer need to extend the occupancy date in these circumstances (i.e. “delay for legitimate cause”), it will not be liable to the purchaser for any damages, and such a delay does not give rise to the purchaser’s right of rescission under the legislation.
Rights of Entry
Additionally, the right of the corporation to enter a unit without the consent of the unit owner or resident was also modified by the Ministerial Order (Condominium Property Act section 24.1). Absent an emergency situation, condominium corporations were, until now, still permitted to enter individual units without consent, provided that 24-hour advance, written “notice to the owner or person in possession of the unit” was given. This provision exists to enable the corporation to “replace, renew or restore any thing that the dominant tenement is entitled to benefit from” (subsection 24.1(3) of the Condominium Property Act). The “dominant tenement” in this section refers to the corporation, or other unit owners, and is generally invoked for maintenance or repairs to common property that is only accessible through the unit. The Ministerial Order has added a new section that suspends the corporation’s right of entry without consent in the event that any one ordinarily residing in the unit (or the person seeking such entry) is self-isolating, is in quarantine, is displaying symptoms consistent with COVID-19, or has tested positive for the virus.
It is important to note that condominium corporations retain a right of entry to units to respond to emergencies, like unit flooding, notwithstanding the owner/resident’s health status. In those circumstances, the corporation must still be able to address the emergency in order to safeguard the units and common property, and in some cases this will involve entering a unit. But it also has a duty to protect the health and safety of its residents, as well as any agents, employees or contractors who must access the unit. Communication is going to be vital in these situations in order to coordinate access to the unit to deal with the emergency, while still adhering to physical distancing and self-isolation requirements. Unit owners and residents should also consult their insurance adjusters to confirm their coverage, should they be required to move to a hotel while emergency remediation is being conducted in the unit.
Reserve Fund Studies and Access to Funds
Further, under the Regulations, the requirement to carry out a reserve fund study, prepare and approve a reserve fund report and provide copies of the report to unit owners every five (5) years is also suspended by the Ministerial Order (Condominium Property Regulation, section 30). Unfortunately, a concomitant suspension of the restrictions on use of reserve funds by condominium corporations to subsidize operating shortfalls is notably absent. It is expected that many condominium unit owners will begin to experience extreme financial difficulties as a result of COVID-19, causing them to default on payment of their monthly condominium fees. Temporarily suspending the provision that restricts use of reserve funds to paying for capital repairs and replacements would have permitted condominium corporations to offset such reductions and continue paying their monthly bills. Condominiums will continue to incur expenses necessary to maintain their properties notwithstanding the fact that most businesses are now shut down. The Minister would be advised to consider making this Order to ease the financial burden condominiums will inevitably face.
Duration of Suspensions
The Ministerial Order will continue in force until 60 days after the Lieutenant Governor in Council declares that the public health emergency caused by COVID-19 has passed, or the Order is otherwise terminated by either the Minister of Service Alberta or by the Lieutenant Governor in Council..