When the Manitoba Condominium Act took effect February 1, 2015, new rules began to regulate the sale, operation and ownership of condominiums. Condominium corporations, owners of condo units, property developers, property managers and real estate agents should take note of some the of significant changes in store:
1. Cooling off period changes: One of the most notable changes mandated by the law involves the cooling off period under Section 51. The new law gives purchasers seven days to terminate an agreement with no penalty, and they can receive their full deposit back. The timeframe is calculated from the date of entering the agreement or the date when the seller provided all required disclosures - whichever occurs later. This represents a change from previous requirements, which only allowed for 48 hours.
2. New disclosure requirements: The disclosure section of the Manitoba Condominium Act now requires that disclosure documents provided to buyers for the sale of a unit meet new requirements, as detailed in sections 51(1) and 51(2) of the law. Disclosure requirements depend on whether a unit has been declared and registered, or if it is merely proposed. Sellers are also required to alert buyers to any material changes in disclosure documents. A buyer may cancel before taking possession of the unit based on these changes, and if the changes are not properly disclosed, they may have the option to file a lawsuit.
3. Mandatory reserve fund study: Under the new regulations, every condominium corporation must complete a reserve fund study to provide boards, owners and buyers of units pertinent information regarding the amount of money the reserve fund should hold to pay for major repairs. The reserve fund study must also be updated every five years.
4. Imposition of fines: The law creates the ability for condominium corporations to pass by-laws allowing their boards to impose fines of up to $100 on unit owners (or tenants and other allowable persons on the property) if they breach the corporation rules. For ongoing issues, fines are limited to no more than once a week, and no more than 12 times yearly.
5. Giving notice of unexpected changes: Unit owners must be given notice of unexpected changes under Section 176(2), including a description of the anticipated changes and costs and an explanation of their rights to request a meeting to review the notice. If the proposed change is substantial, written acceptance by 80 percent of the voting members may be required.
6. Other changes: Other changes include requiring declarants who desire to sell their units to prepare a 12-month financial projection statement of costs, including projections of total common expenses, revenue of the condo corporation, contributions to be made to the reserve fund by each unit and reserve fund opening and closing balances. More details about these changes can be found in Section 49.
The new Manitoba Condominium Act is now in effect, and it's important for condo boards, unit owners and property managers to be aware of the changes and their obligations under the law.