May 22, 2009
FREDERICTON (CNB) - A new act to modernize the New Brunswick condominium sector was introduced today in the legislature. The Condominium Property Act will replace the existing act from 1969.
With the continuing increase in condo development and ownership in New Brunswick, acting minister responsible for Service New Brunswick Jack Keir said that it was time to replace the 40-year-old act with something that better reflects today's situation. Its introduction follows a significant consultation process with all stakeholders in the condominium industry.
"Over the past 15 years, condominiums have become an increasingly popular housing choice in New Brunswick," said Keir. "As this market continues to grow, it is clear that a new act is required. This act will strengthen consumer rights by making the purchase and sale processes more transparent, while also making development fairer and more in line with other Canadian jurisdictions."
The new act contains a modernized consumer protection framework governing the approval, purchase and sale processes for condominiums. It will also provide the necessary tools for a corporation to successfully manage its condominium.
The number of condominium units in New Brunswick has increased by 54 per cent since 2004, with the highest concentrations in Greater Moncton, Fredericton and Saint John.
A condominium is a type of ownership, as opposed to a style of building. A condominium owner owns his or her respective unit, and is a joint owner of the common element. A group of condominium owners form a corporation which directs the operations and maintenance of the common element.
EDITOR'S NOTE: More information concerning condominiums and the new Condominium Property Act follows. MEDIA CONTACT: Brent Roy, communications, Service New Brunswick, 506-453-6775.
New Condominium Property Act
After significant consultations with stakeholders, government will repeal the existing Condominium Property Act, and replace it with a modernized consumer protection framework governing the approval, purchase and sale processes for condominiums in New Brunswick. The act will be proclaimed on Jan. 1, 2010. Properties under development between now and the proclamation date will be grandfathered under the old rules, providing that a building permit has been issued.
Modernization of the condominium sector will make development fairer and more in line with other Canadian jurisdictions.
Increased transparency throughout the purchase and sale process will balance the responsibilities of developers with the rights of consumers. The act is also designed to provide the essential tools for a corporation to successfully administer a condominium.
The new act will address:
The act will create a director of condominiums who will administer the act. To offset the costs of the new framework, the act will introduce fees for developers. The fees will range from $1,300 for a two-unit development, to a maximum of $20,500 for a development of 50 or more units.
Existing corporations having more than 10 units must obtain a reserve-fund study (which is essentially a projection of their major expenses over a 10-year period). The act will allow for at least five years to complete the transition.
In the case of new development projects, a reserve-fund study will be mandatory for the approval process for corporations with more than 10 units.
All corporations will be required to have a reserve-fund account to offset expenditures for significant maintenance and repairs
Purchase and sale agreements for new units will be subject to a 10-day cooling-off period, and will require submission of the proper documents to all potential buyers.
A condominium is a form of home ownership in which individual units of a larger complex are sold, not rented. These units are usually townhouses, apartment-style, or even commercial businesses. Contrary to popular belief, the word "condominium" does not apply to the type of building, but the legal ownership arrangement.
Existing buildings may be converted into condominiums. If the building contains apartments for rent, the rights of the current tenants are protected by the Residential Tenancies Act.
Those who purchase units in a condominium technically own everything from the walls inward. All of the individual homeowners have shared rights to most common areas such as elevators, hallways, pools and club houses. Maintenance of these areas becomes the responsibility of a condominium corporation. Every owner owns an interest in the condominium corporation, plus an obligation to pay monthly fees or, sometimes, special assessment fees for larger maintenance expenses.
The original Condominium Property Act was implemented in 1969.
The number of condo units in New Brunswick has increased by 54 per cent since 2004:
There are 189 condominium corporations in New Brunswick.
The highest concentrations of condominium corporations and units exist in Greater Moncton, Fredericton and Saint John.