The Required Processes for Condominium Sales by Developers
Developers selling condominium units in Alberta must follow a series of legal steps outlined in the CPA and Condominium Property Regulation. These steps ensure that purchasers receive the necessary information before committing to a purchase and that the condominium corporation is properly established.
Key Processes Include:
Preparation of the Condominium Plan – The developer must submit a condominium plan to the Land Titles Office, which defines unit boundaries, common property, and unit factors.
Establishment of the Condominium Corporation – Once the plan is registered, a condominium corporation is created. The developer controls the interim condominium board until turnover to the unit owners.
Disclosure & Sales Requirements – Before selling units, the developer must provide a comprehensive disclosure package to potential buyers.
Financial Protection – Purchase funds must be held in trust, and financial guarantees must be in place to protect buyers.
Turnover to the Elected Board – The developer must transfer essential documents and control of the corporation to an owner-elected board at the first Annual General Meeting.
Developer Obligations Regarding the Sale of Units
Developers have strict obligations under the CPA and Ministerial Regulation to protect purchasers and ensure transparency. These obligations include:
Disclosure Requirements
Before signing a purchase agreement, the developer must provide buyers with a disclosure package that includes:
The proposed condominium plan
The bylaws and rules of the corporation
Estimated operating budget and condominium contributions
A statement of the unit factor assigned to the unit
Information on any recreational facilities, leases, or exclusive use agreements
If there are any material changes to the disclosure documents before the sale closes, the developer must inform the purchaser, who may have the right to cancel the contract.
Purchase Agreements
Purchase agreements must comply with statutory requirements, including a 10-day cooling-off period during which a buyer can cancel the contract without penalty.
Financial Protections
Developers must hold all deposit funds in trust, as required under the CPA and Ministerial Regulation.
If a developer collects funds for construction costs or improvements to common property, they must provide financial guarantees.
Developer Purchase Protection Program Requirements
The Condominium Property Act and Real Estate Act Rules require developers to comply with purchase protection programs to safeguard buyers’ investments.
New Home Warranty Programs
Developers of new condominium projects must be enrolled in a mandatory home warranty program that provides coverage for:
Defects in materials and labor
Structural integrity issues
Common property defects
Trust Conditions for Purchase Funds
Any funds paid by a purchaser must be held in trust until the unit title is transferred. This protects buyers from financial loss if a developer fails to complete the project.
Disclosure of Third-Party Interests
Developers must disclose any third-party financing arrangements or liens that may affect the property.
Documents a Developer Must Provide to an Interim Condominium Board
Before the condominium corporation is fully owner-controlled, the developer must hand over essential documentation to the interim condominium board.
The CPA and Condominium Property Regulation require developers to provide:
A Copy of the Registered Condominium Plan – Establishes unit boundaries and common property.
The Corporation’s Bylaws and Rules – Governs how the condominium will operate.
Financial Records – Includes audited financial statements and records of common expense contributions.
Reserve Fund Study or Initial Contributions – Ensures there are adequate funds for future major repairs.
Insurance Certificates – Verifies coverage for common property.
Service Contracts – Includes agreements for condominium management, maintenance, and other essential services.
