Defining Defects in Condominium Management
What is a Defect?
A defect in a condominium context refers to any issue or condition that affects the safety, functionality, or structural integrity of the condominium property. These defects can be:
Structural Defects: Issues with foundations, roofing, or load-bearing walls.
Mechanical Defects: Problems with HVAC systems, plumbing, or electrical wiring.
Safety Hazards: Fire code violations, faulty security systems, or inaccessible emergency exits.
Water Damage and Mold: Leaks, poor drainage, or moisture problems affecting livability.
Legal Obligations for Defect Disclosure
Defect Disclosure Under the Condominium Property Act (CPA)
Alberta law requires condominium corporations to disclose known structural defects in an Information Statement provided to prospective buyers.
A condominium corporation shall, on request of an owner, purchaser, or mortgagee of a unit, provide a statement setting out the particulars of any structural defects in the real property of the corporation or in the common property that the corporation has knowledge of.
Who is Responsible for Disclosure?
Condominium Corporation: Must disclose defects in common property or assets.
Condominium Manager: Ensures the board is aware of disclosure requirements and that statements are accurate.
Unit Owners: Responsible for disclosing defects within their private units.
Failure to Disclose Risks:
Legal action from buyers if defects are later discovered.
Financial liability for the condominium corporation.
Increased insurance costs due to undisclosed risks.
Impact of Defect Disclosure on Condominium Transactions
How Disclosure Affects Property Value:
Full disclosure builds buyer trust and ensures fair pricing.
Undisclosed defects can reduce property value and lead to disputes.
Failure to disclose can delay sales or financing approvals.
How Defect Disclosure Affects Legal Responsibilities:
Ensures compliance with the CPA and reduces liability risks.
Helps avoid litigation related to misrepresentation or fraud.
Provides transparency for both buyers and existing owners.
Best Practices for Managing Defect Disclosures
Conduct Regular Inspections – Ensure potential defects are identified early.
Document Defects in Writing – Maintain detailed records of maintenance reports and repairs.
Educate Board Members – Ensure they understand disclosure requirements.
Update Information Statements Regularly – Ensure buyers receive accurate and current defect information.
Work with Qualified Professionals – Use certified inspectors for structural and safety assessments.
Task: Develop a Defect Disclosure Checklist
Create a checklist that includes:
A process for identifying defects in common property.
A timeline for updating and reviewing the Information Statement.
A method for communicating defect disclosures to potential buyers.
Steps to ensure compliance with Alberta legislation.
