Reporting and Documentation Requirements for Tracking Purchase Protection Programs
Condominium corporations rely on purchase protection programs such as home warranties and deposit protection programs to safeguard against financial risks related to construction defects and incomplete developments. A condominium manager must ensure these programs are properly tracked, documented, and reported.
Key Documentation Requirements
Warranty Certificates and Coverage Details
Copies of New Home Buyer Protection Act (NHBPA) warranty documents.
Breakdown of coverage terms and expiration dates for:
Labour and materials (1 year).
Mechanical systems like plumbing, electrical, and HVAC (2 years).
Building envelope protection (5 years).
Structural defects (10 years).
Deposit Protection & Trust Account Records
Proof that developer-held deposits comply with Condominium Property Act (CPA), requiring them to be placed in a trust account or secured by deposit insurance.
Claims History and Correspondence
A record of past warranty claims, including outcomes and pending disputes.
Communication logs with warranty providers, developers, and service contractors.
Tracking and Reporting Tools
Spreadsheets or software to track warranty expiry dates and claim deadlines.
Regular reports to the condominium board on protection program 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 proactively track expiration dates, submit renewals, and ensure claims are filed within the required timeframes.
Monitoring Expiry Dates and Renewal Deadlines
Establish a tracking system for warranty and deposit protection expiry dates.
Notify the condominium board at least 6 months in advance of required renewals.
Work with warranty providers to ensure timely renewal applications.
Ensuring Compliance with Warranty and Deposit Protection Rules
Verify that warranties cover all eligible repairs to avoid paying for issues that should be covered.
Ensure contractors and repair providers follow warranty procedures when completing work.
Confirm that deposit protection insurance is valid before condominium developments are completed.
Managing Claims and Dispute Resolution
Conduct regular property inspections to identify warranty-covered defects before expiration.
Document all repair issues to support future claims.
File claims before deadlines to avoid financial liability for repairs.
Work with legal counsel if a dispute arises between the corporation and the warranty provider.
Key Takeaway:
Failure to renew warranties, track deadlines, or file claims properly can result in unexpected repair costs, disputes with developers, and financial hardship for unit owners.
Policy Document for Monitoring Purchase Protection Programs
A policy document provides condominium managers with a structured approach to monitoring, tracking, and ensuring compliance with purchase protection programs. Below is a sample policy template:
[Policy: Monitoring Purchase Protection Programs]
Purpose:
This policy establishes best practices for condominium managers to track, maintain, and ensure compliance with purchase protection programs, including home warranties and deposit protections, under Alberta’s 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 a file of warranty certificates, deposit protection records, and claim history.
Ensure records are easily accessible for audits and board review.
Tracking & Reporting
Use a tracking system for warranty expiry dates and renewal periods.
Provide quarterly compliance reports to the condominium board.
Claims Management & Renewal Process
Identify warranty-covered repairs before deadlines expire.
File claims in a timely manner, following the provider’s claim submission process.
Ensure proper renewal of protection programs and report any changes to the board.
Annual Compliance Review
Conduct a yearly audit of warranty and protection program records.
Ensure compliance with Alberta’s warranty and deposit protection laws.
Enforcement:
Failure to follow this policy may result in:
Loss of warranty coverage, requiring the condominium corporation to pay for repairs.
Legal disputes with developers or warranty providers.
Regulatory action from RECA or the Alberta government.
Review & Approval:
This policy should be reviewed annually and updated to reflect legislative changes.
Case Studies: Consequences of Failing to Monitor Protection Programs
Failure to track, renew, and comply with purchase protection programs can lead to significant financial and legal consequences for condominium corporations.
Case Study 1: Missed Warranty Claim on Structural Defects
Scenario:
A condominium board discovered major structural cracks in the foundation, but the condominium manager failed to file a warranty claim before the expiration date.
Consequences:
The corporation had to cover $2 million in repair costs.
Unit owners were charged special assessments to fund repairs.
The board terminated the manager’s contract and pursued legal action for negligence.
Lessons Learned:
Managers must track warranty deadlines and file claims on time.
Failure to document defects can result in financial loss for owners.
Case Study 2: Unverified Deposit Protection Results in Losses
Scenario:
A condominium development was pre-sold to buyers, but the manager did not verify that deposits were held in trust, as required under the CPA. The developer went bankrupt, and the deposits were not insured.
Consequences:
Buyers lost their deposits, with no financial protection.
The condominium board sued the manager for failing to verify deposit protections.
The management company faced regulatory penalties for non-compliance.
Lessons Learned:
Managers must confirm that deposit protection is in place for pre-sale projects.
