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Join former CBC radio host Mark Connolly as he sits down with real estate insiders to bring you behind-the-scenes perspectives that answer your questions about home ownership.
With topics that matter whether you’re buying, selling, or staying put, this is the place to get the latest market updates for the Edmonton housing market, hear conversations about housing affordability, learn about mortgage options, and so much more.
Join us twice a month for episodes that cover local trends with context you won’t find in the national news, and get actionable insights that give you confidence for your next move.
The RAEdio podcast is presented by the REALTORS® Association of Edmonton.
Welcome to the RAEdio Podcast brought to you by RAE, the Realtors Association of Edmonton. So that's the RAE in our radio. We deliver easy to understand market insights, some homeowner tips, perspectives from industry experts so that you can feel informed and empowered wherever you are in your home ownership journey because better decisions start with better information. Today, our guest is Michael Gibson, partner at Miller Thompson LLP and a specialist in real estate law. We're gonna chat about condominiums, how the ownership of a condo is different from owning a single family home.
Mark:Hello, Michael, and welcome.
Michael:Hi. Thank you for having me.
Mark:Now, Michael, you literally co wrote the book on this subject because you teach condo law, right, at the U of A, and you wrote the legal textbook for your students. So tell tell me how that came about. How how did you come to write this book?
Michael:Well, actually, the teaching at the university came first. So I've been doing condominium law and then sort of collective multifamily real estate law for, well, probably over a decade now if I'm counting the years. And I put together the course at the UFA, and I taught that for a number of years. And it just kinda felt like there wasn't a lot of material in Alberta that was relevant to this area. And so we'll kinda put the course together, figured I've got the materials already.
Michael:Let's write the book. So we put that together as well a couple of years ago now.
Mark:Well, it's interesting what you said in there to referring to Alberta condo law. Because I imagine, is the law slightly different across the country? Are there some sort of nuances that people have to know?
Michael:Yeah. Exactly. There's a little bit of nuance to each province. It's provincially regulated area of law. So Ontario's a little bit different from Alberta's, a little bit different from BC, but they all share the same underlying structure because we're all basically trying to do the same thing with it.
Mark:Right. Alright. Let's start at the very basics of it by defining what a condo is and what it is not.
Michael:Sure. So there's what I will say is that a lot of people have an image in their head when you say condominium, and they're probably thinking some kind of high rise or low rise apartment style living where you own the unit. And and it can be that, but it's actually so much more. What it is is fundamentally a form of property ownership. So a condo could be anything from that apartment style in the high rise.
Michael:It could be a townhouse. There's even bare land condos. I've seen condos that are golf courses. I've seen condos there's commercial condos that are warehouse based. So it's really a form of property ownership.
Michael:And and so what makes it different from single family homes is if I own a house, I own title to the house, to the land, and and there's the, that famous saying that every man is the king of his castle. Well, in a condo, it's a it's a shared ownership structure. So you share a certain amount of that sort of kingdom with, with the other owners. And it started many years ago in the nineteen sixties as a way to improve, homeownership and and create an affordable housing solution. So the idea generally being, you may not be able to afford a house yourself, but if a group of people got together and bought a parcel of land, they can each afford a little piece of that, as well as the services that they all pay for going along with that.
Mark:So how would it differ then from owning, say, a unit in a fourplex, or even a single renting an apartment? How is your ownership structure different, and your responsibilities? Because a fourplex, I guess that could be a condo, but it might not be?
Michael:It could be a condo, but it might not be. Many of them are. The minimum you need for a condo is 2 units. So it's purely a real estate creation. It's registered at Alberta Land Titles, and I can take a condo plan.
Michael:And as long as it defines two units and checks a number of other boxes required under the legislation, we have ourselves a condo. The difference so let's take let's say a duplex. A duplex would have a what's called a party wall, which is that shared wall between the two sides of the property. Each owner owns their their title to that property, and there would just be an agreement registered on title that deals with the maintenance of the structure of the wall between them.
Mark:Oh, k.
Michael:A condo is different because a condo actually, it's a statutory creation. And once you register a condo plan, there's actually a new legal entity that comes into being and that's the Condominium Corporation. And based on those documents that are registered at land titles, there will be a defined barrier between, so what is your unit? And your unit is your private. You will have title to that unit that's private property, but that comes with a share of what we call common property.
Michael:And so let's just take the apartment style example. If I live in 501 on the 5th Floor, I will have title to what is defined as sort of my apartment space, but I actually will also be an owner of the common properties. So the elevator, the stairwells, the underground parkade. I actually own a small piece of that as a condo owner. And the way that that ownership is managed, the statutory entity that's created that condo corp, I pay condo fees to the condo corp, and that condo corp manages, my shared property that allows me to enjoy my lifestyle, live in 501, take the elevator to my unit, keep my car in the heated underground parkade, and generally keep the lights on.
Mark:And at the same time, you have some responsibility too possibly because is there always a condo board, and the condo board is made up of the people who own a condo in that unit? So say if you're in a 100 unit place, you know, your condo board might have 10 people on it representing everybody. If you're in a six condo unit, everybody might be on the board, would think. But what role does the board play?
Michael:So the board is basically the democratic voice and and the directing body of the condo corp. So you're absolutely right. Typically, boards are taken from the owners in a democratic process at a general meeting, and they run the day to day. So I I mentioned the elevator, for example, in our apartment with where I live on 501. So the board would be responsible for maintaining the elevator, making sure that it functions.
Michael:So that involves hiring, the elevator contractors, the cleaning and service people, and they set those fees that pay for that. So they will set a budget for the condo, but we need to cover all of the garbage collection, electricity, elevator, you know, you name it. And there will be a number out of that budget. And then based on my ownership share in the condo, that will inform what my condo fees are gonna be to pay for all of that.
Mark:Oh, yeah. We're gonna come back to condo fees because that's a big one, I think, for a lot of people. But let's go back to the origins of condominiums. You you mentioned that, you know, it began in the nineteen sixties. Did Edmonton have a significant role to play in in this creation?
Michael:Edmonton sure did. It's actually a really interesting history. If you go to Northeast Edmonton, there is a condo complex there. It's called Brentwood Village. Brentwood Village is a 56 unit townhouse development.
Michael:It was first developed in 1966 and '67, I believe, and that was the first legally registered condominium in all of Canada.
Mark:It should be on the Edmonton real estate tour.
Michael:It should be. And, you know, there is actually a plaque outside of Brentwood Village.
Mark:Seen
Michael:it. It's a historical society plaque commemorating the first condo in Canada.
Mark:And how how did that come about? Did did they, the people in that, condo village or whoever was developing it, say, we need this new legal framework for this? Or did the free legal framework come about it framework rather come about, and then those people decided, yeah, this is gonna work for us.
Michael:Well, there's an interesting sort of the legal history there. Pre nineteen sixties, developers were attempting to develop ownership structure of a collective multifamily property. And it was actually a little bit of a mess. Because if you can imagine without any structure around that, whatever the developers were doing, whatever they were registering on title, they were getting creative and quite messy. And so Right.
Michael:There was some commentary at the time from politicians and from courts that we need to have a structure here. And so Alberta was one of the pioneering jurisdictions in Canada. They actually looked to Australia for our first condo legislation, and that was passed in 1966. And the developer who developed Brentwood Village was the first to make use of that in Canada.
Mark:Cool. Now you hear a lot today about different forms of of ownership and different ways of living. And one thing we hear a lot about when it talks to about affordable living and developing new properties is about coops. Is it how is a coop different from a condo, or are there some similarities?
Michael:There's some governance similarities, but the structure is very different. So I I do a lot of work with housing coops as well. And the idea with a coop is that it's somewhere between renting and owning. So if you live in an apartment and you rent it, you'll have a landlord. You'll be probably governed by the residential tenancies legislation in any province.
Michael:If you own a condo unit, you actually are the titled owner, and and within that structure, you have your share of the overall collective. It's rules based living, so whatever the collective rules are, you'll have to follow those and the bylaws and policies and things with a condo. So a co op kinda comes in the middle of that. It's another legal structure where there is a separate entity that is created. That entity owns the the real estate, but when I wanna live in a co op, I apply to that entity for membership, and I pay a membership share.
Michael:It's usually, you know, you buy a condo unit, you're paying probably getting a mortgage, couple $100,000. Co op membership, it's usually 1,000 or $2,000 membership share subscription. But then the co op, once it accepts you as a member, it has certain obligations to you. One of those is to provide you, excuse me, with housing. And so the coop owns the property.
Michael:Its members live in the property. And it's similar to condos in a governance structure because those members democratically elect a board. That board runs the coop, sets the housing fees, sets, you know, through the democratic process with the membership, what the rules and policies are gonna be. They too have bylaws. So it's kind of like democratically being your own landlord.
Mark:I see. Okay. So let's talk about some of the things you mentioned there. So you buy a condo. I put my money down.
Mark:I got my mortgage. I move into my condo. What should I know about the board, the bylaws, the rules that I have to live by in a condo? What are my obligations, and I guess somewhat, my responsibilities?
Michael:Well, this is why getting your condominium document review done before you buy is critical. So registered at Land Titles, again, it's all Land Titles construction. So these are public documents. Once they're registered, There'll be a set of condo bylaws. So those are basically the governing rules and obligations and all of these things that owners and the condo corporation and the boards have to follow.
Michael:So the bylaws will set out who's eligible for the board, how the board operates, how meetings in the condo are structured, and it will also set out the the powers and the duties of the condo, the board, and the obligations of the owners. It's very important for owners to know what's in those documents because under our legislation, and it's the same across Canada and the other jurisdictions, is that whether you read them or not, you're bound by them. So you better know what they say before you move in.
Mark:And so are those documents an important thing to do before you actually make an offer on a property? Get go through those documents, or or where does it happen in the process?
Michael:Usually, it it happens at you can make an offer, and it's usually one of the conditions before you will actually go to an unconditional offer and close on the property
Mark:Nice.
Michael:Transaction. You'll review those documents.
Mark:And in those documents, would would it have, say, the condo fees, or is that part of a separate document? Because condo fees are important. I mean, I've seen condo fees anywhere from, say, 300 a month to close to 1,000 a month, and that can make a big difference for people whether they wanna buy a condo and move into one, because, obviously, that's a huge chunk of change.
Michael:Absolutely. I've actually seen some condos where their fees are over 1,000 a month. So it really depends. So what I will say, the bylaws document, that will set out how the fees are calculated, but it probably won't have the budget or the monthly fees. So listed in in in the registration at land titles.
Michael:But when you do a condo doc review, there's a host of documents that the condo has to give you when you make that request for, you know, send me the documents, your information, all of this. And part of that is the current budget and something called, which will come up in the closing, generally, is called an estoppel certificate. And that it's the estoppel certificate that will set out what is owing on this unit today. So if we've got a closing date, the end of the month Yep. You tell me what the current monthly fees are.
Michael:You tell me if the seller owes anything, and that's listed very specifically in that document.
Mark:Now I've owned a couple of condos, and I I've actually never heard that term, the estoppel statement? Or
Michael:Yeah. The estoppel certificate.
Mark:Certificate. Perhaps it's
Michael:something that your your lawyer looked at.
Mark:Yeah. I hope so. Well, let's talk about that because how does the lawyer support the realtor when it comes to a buyer or seller, you know, involved in the condo process? What are the main issues that come up that involve legal representation?
Michael:So the argument, perhaps it's an unfortunate reality, but by the time your real estate lawyer actually gets the deal on their desk, you've it's probably unconditional. Because a lot of the negotiation, the condo doc review that you might hire a document reviewer for, and most realtors have their favorite reviewers that they will recommend to the client. But usually by the time, like, if I'm doing a real estate transaction for a condo unit, it's already unconditional by the time it hits my desk. So if I have any issues, we're talking about a renegotiation of the contract after the fact. So what what people may get tripped up with, and we've seen this before, is maybe something that was missed in a document review.
Michael:Maybe they close and find out that there's actually some big problem with the building and there's a big special assessment. And then what do we do? And and, you know, what you do could result in maybe a holdback or renegotiation of the price, or, you know, a lot of what I do is litigation, and unfortunately, sometimes it ends up there.
Mark:Yeah. I was gonna ask you about sort of things that when someone's buying a condo for the first time, there's those I don't know, I didn't know that moments. And then you just mentioned a couple there. Is there anything else that people that come up for people that you're like, oh, no. This is what happens
Michael:every If it's their first condo or your first real estate purchase in general, you know, the the original concept with condos of making them affordable and getting getting people into the housing market, no matter what market you look at, the apartment style condo is still the most affordable real estate for in Canada. Right. And I pulled up a couple of, sort of recent stats. So the apartment style condo, the average price in Edmonton is currently sitting at 219,000 on May, June 2026 numbers.
Mark:Right.
Michael:And then in, you know, you you look at some of our other jurisdictions, Vancouver's at a whopping 771,000 for the average condo. So, you know, it's probably going to be your first home. And for many people, it may also be their last home as as retirees sell the big house and downsize. So what I would say whether you're in that position and you've owned property before or if it's your first home purchase, it is a a community you're buying into. That community has rules.
Michael:It probably has a lot of great things going for it, but also may you know, maybe it has some building envelope work or the roof needs fixing, and there might be one of those dreaded special assessments coming up. So what I would say is do your document review. Ask questions if there's something you're not sure about. You say, well, what does this mean with roof repairs? Do they have enough money to cover that, or am I gonna have to budget for a $5,000 or $10,000 assessment if I buy this property?
Michael:Just know what you're getting into is very important.
Mark:Alright. Let's cover a couple of those topics then because you mentioned special assessment. We'll get to that secondly. First of all, let's talk about the reserve fund, and that's sure I'm sure that's something many people would never have heard about, but that's it's basically a fund that the condo might have for these expected repairs? At some point, you know, your roof's gonna need some maintenance.
Mark:That might be what the reserve fund is for. Right? But it might be for many other things. So may tell me a bit more about the reserve fund.
Michael:Sure. So the reserve fund is basically the savings account to cover those major capital repairs. So it's one of the probably key jobs of any condo board is to make sure that they are implementing a proper reserve fund plan, and there's experts you can hire to assist with that. So every condo, every five years in Alberta has to get what's called a reserve fund study. This is where typically an engineer or some other construction industry professional will come in, take a look at your building systems and your infrastructure, and give you an idea of what needs to be budgeted for within the next five years and ten years and so on.
Michael:Condos are supposed to be keeping those reserve fund studies up to date, they are one of the documents that you can request on a document review. See what's coming up, see what the estimated cost of that is, and then see, well, do they have a reserve fund plan that's gonna cover this? So if it says, you know, you need a $100,000 roof repair within this five year period, is is that budgeted for? Is that saved in the reserve fund, and will it be covered? If it's not covered, that's where those special assessments come in because the roof's gonna have to be repaired so the condo may have to cash call from amongst the owners to get that money if it doesn't have it already.
Mark:Alright. Well, that gets us right to the special assessment. I bought a condo one time, and I think six months after I bought it, they had to redo all the balconies. So that was a special assessment. So let's That's a good one.
Mark:Let's lay that out for people what that is.
Michael:Sure. So you have your monthly condo fees based on the budget. And within that, there's going to be whatever the monthly expenses that condo has to cover and hopefully some reasonable contribution to the reserve funds that they're saving every month to build up the balance so that those big items will be covered when the time comes. But maybe whether it's something unexpected or maybe the budget isn't enough for for what ends up happening, it's possible that, the condo may levy a special assessment. So that legally is effectively the same as the condo the regular monthly condo fee, but it's an extra cash call.
Michael:So if we need that $100,000 to repair the roof, we don't have it in the reserve fund, we don't otherwise have room in the budget, The condo may go to the owners and say, you know, we we need a bit of money here. You guys have to kick it up. And there's no limit on what it can be. I've seen special assessments as low as a couple of thousand dollars. I've seen them be some kind of top up on your monthly fees, a couple $100 for so many months.
Michael:And I've seen special assessments that are a $100,000. Oh.
Mark:Those would be painful. Now as a community, you're you're part of this condo association or whatever it might be. Do all condo owners have an equal say when it comes to decisions, or how is the, I guess, democratic voting process distributed among owners?
Michael:So what they have is, I would call it, proportion, let's say. So when you buy a condo, if you especially if you've seen other real estate purchases before, take a look at the title certificate. There's something special on a condo certificate that you won't see on a single detached family home, for example, and that's, called a unit factor allocation. So you'll see on your title that you have some share of the common property. That is basically you can think of it like buying shares in a corporation.
Michael:The more shares I buy in any publicly listed company, the greater my vote is gonna be at the shareholders' meeting. It's not dissimilar with condos. If you've got a big number for those unit factors, you've got a bigger vote. It's weighted by vote. So typically and you really have to check the condo docs because it can change.
Michael:But typically, the bigger the unit, like if it's the penthouse unit versus the one bedroom, it probably has more unit factors. And if the vote is weighted on unit factors, that's that's what it'll be.
Mark:So that's gives you an extra vote because you have that bigger property or the more expensive property. But also at the same time, does that also affect the special assessment? Would you have to pay more than, say, someone with a smaller unit factor?
Michael:Absolutely. So the default is that your condo fees and your special assessments and all of that are based on your unit factors. So if you own more of that shared property, you owe more to the budget to maintain it for everybody.
Mark:So tell us a little bit about the liabilities and legal risks that exist in condo ownership.
Michael:Well, it's very it it it's similar to single family home ownership, but you have to remember that if you're, say, in an apartment building, your home sits on top of somebody else's home as well as the shared hallways that you all own.
Mark:Right.
Michael:So, you know, a $500 toilet line leak, for example, if it if it's a simple little water loss. If that happens in the basement of a home, it's probably not gonna be a lot of damage. If it happens on the 10th Floor and it impacts all the units below you, the damage could be quite significant because these are often commercial scale properties. And so what I do in my own home, you know, same liability. I have an impact on my neighbors, but in a building that's a commercial scale, just the dollar value of that impact could be so much more significant.
Michael:And that's why owners should make sure that they protect themselves by getting adequate insurance because the condo can actually charge back some of those repair costs to the owners. So if they have to repair, say there's a water loss, your bathtub overflows, it impacts units below you, it impacts the common property hallways, they have to do a bunch of water repair work, they could be looking to that owner who owns the unit, where the source of the loss was for some compensation for that. And owners can get insurance for those kinds of chargebacks, and I very much recommend that they do.
Mark:I mean, there are different kinds of insurance too because the condo board itself would have one kind of insurance, where you would have another kind on your individual condo. Right? And those would be two different things, I would think.
Michael:Absolutely. So the condo wouldn't have condominium insurance, and there's a number of things that that covers. They also part of that would be directors and officers liability insurance. We wanna make sure that the people on the board are kept honest, or the owners, if there's a problem, are made whole. But owners privately can get insurance to cover I actually have heard of insurers covering at least some special assessments even, as well as those types of chargebacks for any damage.
Mark:So if there's one thing that people should take away from this first episode about condos, because we have a lot more to come, what would you say it should be? What should should people think about when buying a condo that that really they have to get their head around that's different from buying a single family home?
Michael:I would budget the condo fees for sure. Do that document review. See how the financial health of the building is, and make sure that you have proper insurance. So this involves in terms of the budget, you'll be working with your mortgage broker, your bank, or whoever your lender is to make sure that not only can you afford the the dollar price for the purchase, but also that you can afford the regular monthly fees. Because if they're too high, that will have an impact on the mortgage that you'll qualify for.
Michael:And as well, you know, those chargebacks, if there's a loss out of your unit, like I said, a $500 simple sink leak could end up being thousands of dollars because it impacts so much more property below you. Make sure you get proper insurance for that. And insurers, there is condo unit owner's insurance, and and there are standard policies that do cover for that. Just make sure you get the proper coverage.
Mark:Well, we have a lot more to talk about. We're gonna do that in our next episode. So, Michael, we invite you to come back and do that. You're you're good that for another episode of this?
Michael:Happy to come back. Excellent. Having me.
Mark:Alright. So thanks for joining us on the Realtors Association of Edmonton Radio Podcast. We're gonna tune in for more condo info, and Michael will rejoin us for that. Thanks very much, everybody.