Reporting and Documentation Requirements for Tracking Purchase Protection Programs
A condominium manager is responsible for tracking, documenting, and reporting on purchase protection programs that provide financial safeguards against construction defects, warranty claims, and deposit protection.
Key Documentation Requirements:
Warranty Certificates & Coverage Details
Copies of New Home Buyer Protection Act (NHBPA) warranty coverage for applicable properties.
Documentation of warranty start and end dates for major systems (e.g., plumbing, electrical, HVAC, building envelope, structural components).
Claims history and any pending warranty disputes.
Deposit Protection & Trust Account Records
Proof of developer-held deposits in trust accounts as required under Condominium Property Act (CPA).
Confirmation of deposit insurance coverage for pre-sale condominium buyers.
Service Agreements with Warranty Providers
Copies of contracts with third-party warranty providers.
Documentation of claim submission procedures and response timelines.
Tracking & Reporting Tools
Spreadsheet or database to track warranty expiry dates, claim deadlines, and renewal requirements.
Monthly or quarterly reports to the condominium board on purchase protection compliance.
Legislative Reference:
A corporation shall keep records of its business transactions and financial affairs, including records of any warranty protections applicable to common property. Failure to maintain proper documentation can result in missed warranty claims, financial losses, and legal disputes.
Ensuring Timely Renewal and Compliance with Protection Program Terms
To maintain compliance with purchase protection program requirements, a condominium manager must:
Monitor Expiry Dates & Renewal Deadlines
Create a tracking system for all warranty expiration dates.
Notify the condominium board well in advance of required warranty renewals.
Submit renewal applications before deadlines to prevent coverage lapses.
Ensure Claims Are Filed Within the Required Timeframes
Identify covered defects early through regular inspections.
Document all repairs and deficiencies to support future claims.
File claims before warranty deadlines to avoid losing financial protection.
Maintain Communication with Warranty Providers
Establish a point of contact with warranty providers for fast processing of claims.
Clarify coverage terms and exclusions to avoid misunderstandings.
Keep a record of all communications related to warranty claims and renewals.
Conduct Regular Compliance Audits
Review the condominium corporation’s financial records to ensure deposits and warranties are properly documented.
Ensure that board members understand their obligations related to purchase protection programs.
Key Takeaway:
Failure to renew coverage or file claims on time can result in unexpected repair costs, disputes with developers, and increased financial burdens on unit owners.
Best Practices Policy for Condominium Managers on Monitoring Purchase Protection Programs
A standardized policy document helps condominium managers track, renew, and ensure compliance with purchase protection programs. Below is a sample policy template:
[Policy: Purchase Protection Program Monitoring]
Purpose:
This policy ensures that condominium managers properly track, document, and maintain compliance with purchase protection programs, including home warranties and deposit protections, in accordance with the Condominium Property Act and New Home Buyer Protection Act.
Scope:
This policy applies to all condominium corporations managed under the Real Estate Act Rules and relevant Alberta legislation.
Responsibilities of the Condominium Manager:
Documentation & Record Keeping
Maintain warranty certificates, deposit protection records, and claim documentation.
Ensure records are readily accessible for the condominium board and auditors.
Tracking & Reporting
Maintain a warranty tracking system to monitor expiry dates, claim deadlines, and renewal periods.
Provide quarterly compliance reports to the condominium board.
Claims Management
Identify eligible repairs covered by warranties.
File claims within required timeframes and track their resolution.
Communication & Compliance Audits
Ensure all contractors and warranty providers are contacted as needed.
Conduct an annual audit of purchase protection records to verify compliance.
Enforcement:
Failure to comply with this policy may result in:
Missed warranty claims leading to financial loss for the condominium corporation.
Legal disputes with developers or warranty providers.
Regulatory action under the Condominium Property Regulation.
Review & Approval:
This policy should be reviewed annually and updated to reflect legislative changes.
Case Studies: Consequences of Failing to Monitor Purchase Protection Programs
Failure to track and maintain purchase protection programs can lead to significant financial and legal consequences for a condominium corporation.
Case Study 1: Missed Warranty Coverage for Structural Defects
Scenario:
A condominium complex in Edmonton was built with serious structural deficiencies, including foundation cracks and water leaks. The condominium manager did not track warranty deadlines, assuming the board would handle it.
Consequences:
The warranty period expired before a claim was filed, leaving the condominium corporation responsible for $1.5 million in repairs.
Owners faced special assessments to cover the cost.
The board filed a lawsuit against the manager for negligence.
Lessons Learned:
Managers must actively track warranty deadlines and file claims on time.
Failure to monitor purchase protections can create financial hardship for unit owners.
Case Study 2: Developer Bankruptcy and Unverified Deposit Protection
Scenario:
A condominium development was pre-sold, and buyers paid deposits to the developer. However, the manager failed to verify that deposits were held in a trust account as required under the Condominium Property Act. When the developer went bankrupt:
Consequences:
Buyers lost their deposits, as there was no deposit protection in place.
The condominium board sued the manager for failing to verify trust protections.
Government regulators fined the brokerage for non-compliance.
Lessons Learned:
Managers must verify that deposit protection is in place for pre-sale projects.
Failing to check compliance with deposit protection laws can result in lawsuits and financial loss.
