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  • Questions About Default Bylaws

    Posted by Karen on April 10, 2022 at 4:40 pm

    jonfklein@gmail.com

    I have a couple of questions about adopting the default bylaws found at the end of the Alberta Condominium Property Act Regulations.

    1) The default bylaws do not include insurance requirements. So how does a corporation that adopts the default bylaws handle their insurance requirements?

    2) At the start of the default bylaws in the Regulations is stated:

    Note: Section 33 of the Act provides that the bylaws in

    this Schedule apply only until they are repealed or

    replaced by special resolution and registered at the land

    titles office.

    My building has been using an old set of bylaws that were adopted decades ago. Is it allowed to repeal these old bylaws and revert back to the default bylaws, or are the default bylaws only allowed for new condominiums after registration of a condominium plan?

    Karen replied 7 months, 3 weeks ago 1 Member · 0 Replies
  • 0 Replies
Please spread the word!
  • Karen

    Administrator
    April 10, 2022 at 4:41 pm

    GibsonT

    Hopefully someone with more legal knowledge than I will be able to help with some of these questions Jon.  To me, it would seem prudent to accept the default bylaws AND add an insurance clause(s).

    I think the question is: are the bylaws fit for purpose?

    For example, many small condos will find it best to use the default bylaws – certainly 12 units or less.  However, if the condo is larger or more complex, then it is worthwhile and essential to have site specific bylaws, in my opinion.

    Please spread the word!
    • Karen

      Administrator
      April 10, 2022 at 4:42 pm

      MarkH

      Posted by: @jonfkleingmail-com

      I have a couple of questions about adopting the default bylaws found at the end of the Alberta Condominium Property Act Regulations.

      1) The default bylaws do not include insurance requirements. So how does a corporation that adopts the default bylaws handle their insurance requirements?

      MarkH: Section 47 of the Condominium Property Act (CPA) applies and requires the Corporation to undertake certain insurances.

      2) At the start of the default bylaws in the Regulations is stated:

      Note: Section 33 of the Act provides that the bylaws in

      this Schedule apply only until they are repealed or

      replaced by special resolution and registered at the land

      titles office.

      My building has been using an old set of bylaws that were adopted decades ago. Is it allowed to repeal these old bylaws and revert to the default bylaws, or are the default bylaws only allowed for new condominiums after registration of a condominium plan?

      MarkH: Sections 34 and 34.1 of the CPA tell you the answer to your question. If you were using the old default bylaws (as I believe you indicate above), they are now by virtue of the CPA and with no action required by your corporation, replaced by the default bylaws set out in the CP Regulation.

      MarkH: If your old bylaws were not the old default bylaws, but developed and adopted by your corporation, they will endure until replaced by new bylaws which you would adopt by Special Resolution. However, in the interim, your old bylaws (if in conflict with the current CPA and Regulation [CPA&R]) would be over-ruled by the new legislation.

      MarkH: Sections 34.1(2) and (3) introduce complications regarding adoption. If a part of your current bylaws is in conflict with the revised CPA&R, you can amend that part by Ordinary Resolution.

      MarkH: I believe that if you want to use the new default bylaws, you should repeal your old bylaws and adopt the new bylaws by Special Resolution. Please only do this if the new default bylaws truly meet the needs of your development and corporation, including the insurance requirements you first asked about.

      Please spread the word!
      • Karen

        Administrator
        April 10, 2022 at 4:43 pm

        jonfklein@gmail.com

        Posted by: @terry-g

        TerryG: Hopefully someone with more legal knowledge than I will be able to help with some of these questions Jon.  To me, it would seem prudent to accept the default bylaws AND add an insurance clause(s).

        So, basically a new set of bylaws would be prepared by copy-pasting the default bylaws into a new document then adding an insurance section. Then this document would be registered with land titles, assuming it is passed with a special resolution. Correct?

        I was speculating that maybe our current bylaws could simply be repealed so that our corporation would have no registered bylaws – the same situation as for a new condo corporation. We would then deal with our insurance requirements the same as a new corporation that has no bylaws would.

                TerryG: I think the question is: are the bylaws fit for purpose?

        I haven’t looked into that yet. Right now I am just exploring how the default bylaws would be adopted. If they appear to be fit for purpose I might propose it to my board as an alternative to allowing the manager to prepare new bylaws for us – which I am not in favor of.

        TerryG: For example, many small condos will find it best to use the default bylaws – certainly 12 units or less.  However, if the condo is larger or more complex, then it is worthwhile and essential to have site specific bylaws, in my opinion.

        My condo building is 12 units, 40 years old, wood structure, boiler for hydronic heating, hot water heater, make-up air unit, wood-burning fireplaces, no elevator or amenities to speak of. Pretty basic I think.

        Please spread the word!
        • Karen

          Administrator
          April 10, 2022 at 4:44 pm

          jonfklein@gmail.com

          Posted by: MarkH

          Posted by: @jonfkleingmail-com

          I have a couple of questions about adopting the default bylaws found at the end of the Alberta Condominium Property Act Regulations.

          1) The default bylaws do not include insurance requirements. So how does a corporation that adopts the default bylaws handle their insurance requirements?

          MarkH: Section 47 of the Condominium Property Act (CPA) applies and requires the Corporation to undertake certain insurances.

          Ok, understood.

          But how does a condominium corporation that doesn’t have any bylaws, such as a new condominium, go about obtaining the required insurance? Would they simply contact an insurance broker and ask for an insurance package meeting the requirements of the CPA&R?

          2) At the start of the default bylaws in the Regulations is stated:

          Note: Section 33 of the Act provides that the bylaws in

          this Schedule apply only until they are repealed or

          replaced by special resolution and registered at the land

          titles office.

          My building has been using an old set of bylaws that were adopted decades ago. Is it allowed to repeal these old bylaws and revert back to the default bylaws, or are the default bylaws only allowed for new condominiums after registration of a condominium plan?

          MarkH: Sections 34 and 34.1 of the CPA tell you the answer to your question. If you were using the old default bylaws (as I believe you indicate above), they are now by virtue of the CPA and with no action required by your corporation, replaced by the default bylaws set out in the CP Regulation.

          No, not this situation.

          MarkH: If your old bylaws were not the old default bylaws, but developed and adopted by your corporation, they will endure until replaced by new bylaws which you would adopt by Special Resolution. However, in the interim, your old bylaws (if in conflict with the current CPA and Regulation [CPA&R]) would be over-ruled by the new legislation.

          Yes, this situation – our bylaws were developed and adopted by our corporation.

          So, once a set of bylaws have been adopted they can only be replaced by a new set. They  cannot simply be repealed leaving the corporation with no bylaws filed with land titles. Correct?

          MarkH: Sections 34.1(2) and (3) introduce complications regarding adoption. If a part of your current bylaws is in conflict with the revised CPA&R, you can amend that part by Ordinary Resolution.

          In our situation the bylaws are so out of date they need to be totally replaced. They were adopted shortly after registration of the condominium plan 40 years ago. There has been only one amendment since then.

          But that’s an interesting point. If I understand 34.1(2) correctly it allows a corporation a window of one year to amend a conflict with the CPA&R by ordinary resolution every time the CPA&R are revised.

          MarkH: I believe that if you want to use the new default bylaws, you should repeal your old bylaws and adopt the new bylaws by Special Resolution. Please only do this if the new default bylaws truly meet the needs of your development and corporation, including the insurance requirements you first asked about.

          The problem is the default bylaws do not deal with insurance requirements. So I am wondering how to deal with this. Should we add a section to the bylaws that specifies our insurance requirements? I suppose this section should be written by a lawyer then. Or can we leave the insurance requirements out of the bylaws entirely and instead specify our insurance requirements simply through communication with our insurance broker?

          Please spread the word!
          • Karen

            Administrator
            April 10, 2022 at 4:45 pm

            MarkH

            Jon, if the bylaws do not comply with the CPA&R, the provincial legislation overrides the bylaws (unless the CPA&R grant permission to vary the requirements of the legislation). Similarly, if the bylaws are silent about insurance, you are guided (or told what to do) by the CPA&R.

            You asked (re Section 34.1(2)) about the one-year window to amend an out-of-date bylaw by ordinary resolution. I believe (I haven’t checked) there is a one-year window after the proclamation of the relevant part of the Act. I think the PC Government in 2014 considered the whole Act would be proclaimed in one Order in Council, not piece-meal as has now happened, so Service Alberta would have to answer that question.

            I don’t know what an insurance company would say about the absence of bylaws; I believe they would rely on the requirements of the Act.

            You asked “Would they simply contact an insurance broker and ask for an insurance package meeting the requirements of the CPA&R?” I recently received a notice from my insurance company telling me what the changes in the Act required and noted that some risks are not covered. I had already covered most of those issues (such as damage caused by sewage flooding the basement of my apartment building) in MY policy (not a standard package). You should consider the needs of your project, not the convenience of a one-size-fits-some package.

            It isn’t in your query, but if I were a potential purchaser of a unit in your project, and I found you had no, or very old, bylaws, I would walk away from the purchase. If the bylaws and possibly other documents are not up-to-date, what else about the project has been neglected? (Rhetorical Q for your consideration, please don’t answer!) Up-to-date documents would/should be a good selling point and enhance the value of your project.

            Please spread the word!
            • Karen

              Administrator
              April 10, 2022 at 4:46 pm

              jonfklein@gmail.com

              Posted by: MarkH

              MarkH: You asked “Would they simply contact an insurance broker and ask for an insurance package meeting the requirements of the CPA&R?” I recently received a notice from my insurance company telling me what the changes in the Act required and noted that some risks are not covered. I had already covered most of those issues (such as damage caused by sewage flooding the basement of my apartment building) in MY policy (not a standard package). You should consider the needs of your project, not the convenience of a one-size-fits-some package.

              I wonder what your building insurance company meant by “some risks are not covered.”

              Maybe they were referring to 61(3),(4),(5),(6) in the regulations which appear to give the insurance companies some flexibility in insuring the required perils to be covered under 61(1).

              Or maybe they were trying to sell you “all risks” insurance, which I understand covers everything that is not explicitly omitted in the policy.

              Please spread the word!
            • Karen

              Administrator
              April 10, 2022 at 4:47 pm

              MarkH

              Jon, I abbreviated the two-page letter from MY insurance company (not the CORPORATION’S). My apologies, I should have clarified. You can’t compare the two in terms of the legislation. I provide my broker with a copy of the corporation’s policy summary annually and consult him as to whether I need additional coverage. The letter from my insurance company (not the broker) was generic to the owner-clients, not the corporation. I looked at my risks and needs and amended my policy to cover what the corporation’s policy didn’t. The biggest difference is that the corporation’s deductible is high, and I have added coverage to ensure my potential (corporation’s deductible) $50k bill will be reduced to a manageable $500.00.

              You could argue that I am overpaying for insurance until some event happens like the massive hailstorms in NE Calgary earlier this year. Some of the hail damage will be covered, but on a depreciated basis, unless owners decided to upgrade their coverage to replacement value. Basement flooding might have been covered if ‘overland’ water had been included in a policy, but that would not cover basement flooding caused by a sewer back-up.

              Basically, you must determine what you need and you get what you pay for.

              Please spread the word!
            • Karen

              Administrator
              April 10, 2022 at 4:48 pm

              jonfklein@gmail.com

              @MarkH-2

              OK, it seems there was a misunderstanding there.

              When I asked “Would they simply contact an insurance broker and ask for an insurance package meeting the requirements of the CPA&R?” I was referring to the condo board, not individual owners.

              In other words, if the board was using the default bylaws, which don’t have an insurance section, how would they specify the corporation’s insurance requirements to an insurance broker? Would they simply phone up an insurance broker and say ‘Give me a quote for an insurance package meeting all of the CPA&R requirements”?

              This must be possible somehow because new condominiums use the default bylaws until they are replaced by special resolution with something else, and they would be required to have insurance during this time.

              Please spread the word!
            • Karen

              Administrator
              April 10, 2022 at 4:48 pm

              MarkH

                      @jonfkleingmail-com

              Since the CPA&R cover the basic minimum insurance requirements, there is no need to enact insurance provisions in the bylaws – unless the corporation wants to depart from the basic minimums required by the legislation.

              Please spread the word!
            • Karen

              Administrator
              April 10, 2022 at 4:49 pm

              jonfklein@gmail.com

              Ok, thanks for the info.

              Ultimately I’m trying to figure out how a condo corp. would implement the default bylaws. It sounds like it can be done by simply copying them from the regulations and pasting them into a new document. Assuming it passes a special resolution the document would then be filed with land titles, and insurance requirements would be communicated to a broker separately from the bylaws.

              Please spread the word!
            • Karen

              Administrator
              April 10, 2022 at 4:49 pm

              Jan and Roy

              The reason that insurance was not included in the default bylaws is that the issue of insurance is covered extensively in part 6 of the Regulation.  Any broker or agent providing corporate or owner condo insurance should be fully conversant with these requirements.

              The link to the Regulation is https://www.qp.alberta.ca/documents/Regs/2000_168.pdf.

              A lawyer should be consulted to see if any current bylaw provisions are not

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            • Karen

              Administrator
              April 10, 2022 at 4:50 pm

              jonfklein@gmail.com

              @jan-and-roy

              I was thinking it was left out because insurance is a subjective thing – some people might prefer more insurance, some people might prefer less.

              I also thought that maybe the insurance industry lobbied the government to get it taken out so that they have more freedom to over-sell insurance to condo corporations. But that’s just my speculation.

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