26 Feb 2013
February 26, 2013

The Bare Land Condo Conundrum

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There has been a great deal of talk lately regarding bare land condos and just as much confusion amongst those that live in these types of condominiums. The reason for this is a recent judgment, commonly referred to as The Shores, which affects the way in which all bare land condominiums have to operate moving forward.

Let’s try to clarify the issue.

First, you’ll want to know, if you don’t already, if you own a bare land condo. So, what’s the difference between a bare land condo and a conventional condo?

    A bare land condo is a type of condominium that is identified by ‘pins’ in the ground at the perimiter of the land. Everything within that marked area, including any structures or improvements, are the property of the owner and would, therefore, be the responsibility of the owner. Everything outside the perimiter of the ‘pins’ would be common property and the responsibility of the condominium corporation.
    As compared to a conventional condominium wherein you would own ‘paint to paint’ only, inside the unit. Everything outside your paint would be the common property.

Alright. Now how does this affect real life?

Here is a particular excerpt from the Condominium Property Act (CPA):

38(1) A corporation shall, subject to the regulations, establish and maintain a
capital replacement reserve fund to be used to provide sufficient funds that
can reasonably be expected to provide for major repairs and replacement
of

      a) any real and personal property owned by the corporation, and
      b) the common property,

where the repair or replacement is of a nature that does not normally occur
annually.

The CPA firmly establishes that a condominium corporation can maintain a reserve fund for only common property and property owned by the corporation. This means that in the case of a bare land condominium, the ‘pins’ establish that structures/improvements are the responsibility of the unit owner.

Now, your bylaws may also outline your condominium corporation’s duties to include replacing/maintaining certain exterior improvements, such as shingles, siding, decks, sidewalks, driveways…etc, and your bylaws may even go so far as to have created a separate category called ‘managed property’ or some such phrase but, this doesn’t solve the problem.

The most recent judgment to date, The Shores case – Citation: Maciejko v. Condominium Plan No. 9821495, 2012 ABQB 607 (Honourable Mr. Justice A.W. Germain) sets out the following:

It is not ultra vires [beyond the powers] for The Shores to maintain the managed property for the betterment of the condominium project. However the condominium may not pre-collect for those repairs by creating a parallel reserve fund for managed property.

Basically, if your bylaws state that it is the duty of the Corporation to maintain the ‘managed property’, then the Corporation must but, cannot pre collect to do so.

As of right now, this is law so if you think your corporation is functioning in contradiction to this ruling you should seek advice from your property manager, who should be well informed of the case law and be able to direct your corporation on measures to take.

To read the full judgement, click here

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