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Advocacy

AREA & RECA Reach $900,000 Settlement Agreement


This summary has been prepared with facts drawn from Court and government documents for the exclusive use of Members to understand relevant context for the recent settlement between the former Council of the Real Estate Council of Alberta (“RECA” or “Council”) and AREA. AREA is pleased to have resolved this matter with RECA and is proud of its efforts to defend the rights and reputations of Members.

Statement to Members

Policy Positions

Preventing Land Transfer Tax in Alberta
The Issue

Many provinces and municipalities in Canada have turned to the implementation of a Land Transfer Tax (Home Buyers’ Tax) as a source of revenue. British Columbia, Manitoba, Ontario, Quebec, New Brunswick, Newfoundland and Labrador all have a provincial land transfer tax. Municipal land transfer taxes are in place in Toronto, Montreal and several Nova Scotia municipalities. If a provincial or municipal Land Transfer Tax were implemented in Alberta, it would:

  • Reduce affordability and create barriers to home ownership;
  • Hurt Alberta's economy and jobs;
  • Cause additional pressure on transit systems and transportation infrastructure; and
  • Create inconsistencies for government budgeting due to the high degree of year-over-year variability.

What AREA Advocacy is Doing

While provincially there has not been an expressed interest in land transfer tax in Alberta, the power to generate additional revenues from taxation, along with the specific format those taxes would take, are common topics in sustainability discussions between municipalities and the provincial government. In 2016, the Service Alberta Minister confirmed in a letter to AREA that it is not planning to introduce a land transfer tax.

Under Alberta’s Municipal Government Act, municipalities’ revenue sources are largely limited to property taxes and user fees, with the exception of some special levies to fund specific applications. Amendments were made to the Municipal Government Act (Bill 20) in spring 2015 and additional amendments related to taxation authority are expected to be reviewed in the fall 2015 legislature sitting. Changes within this Act could provide municipalities with the authority to implement new taxes, including a municipal land transfer tax. Alberta REALTORS® understand that predictable, sustainable revenue is necessary for large cities to provide necessary infrastructure for their constituents; in that vein, AREA Advocacy encourages the province to explore alternative tax levers for municipalities.

In addition, the platform on which the government ran suggests the province will be continuing work with Edmonton and Calgary to ensure the city charter process is developed, which offers another potential opportunity for the introduction of land transfer taxes. REALTORS® are concerned that Edmonton and Calgary will request that the province provide additional municipal taxation authorities, including the ability to implement land transfer taxes, which could easily spread to other Alberta municipalities. AREA Advocacy is asking municipal politicians to support Alberta REALTORS® in protecting consumers by advocating against any future land transfer tax/fee proposals.

Alberta Land Title Registry System Enhancement
The Issue

Under Alberta’s Torrens System of land registration, the Government has custody of all original titles, documents and plans and has the legal responsibility for the validity and security of all registered land title information. The Government guarantees the accuracy of title and an Assurance Fund is available to anyone who suffers loss due to errors on title or fraudulent activities. Ensuring the integrity of the system’s data and the continued application of the Assurance Fund are the foremost concerns to Alberta REALTORS® as Service Alberta reviews methods for modernizing and improving the delivery of land titles and registry services.

What AREA Advocacy is Doing

AREA Advocacy is asking the government to move towards 24/7 access to Alberta's Land Titles System.

Condominium Property Act Regulations
AREA Position

After reviewing the policy options proposed by Service Alberta and the ensuing stakeholder roundtable discussion, AREA supports the following:

  • Provision of electronic copies of the documents specified in the Condominium Property Amendment Act to the owner or their designate free of charge regardless of intended use;
  • When an owner requests a printed copy, the regulations should set a maximum fee of 25 cents per printed page plus postage/courier fee (if required) that aligns with the actual cost.
  • Setting a maximum fee for the estoppel certificate of $35 (aligned with the BC Strata Property Act); and
  • Establishing a maximum fee for expedited/rush provision of documents.
Rationale
  • Condominium owners should have a basic right to documents pertaining to their property.
    It is the property management companies' basic administrative responsibility to keep records and provide document custodianship for the condominium corporation that hires them. These companies must have adequate resources (e.g. IT infrastructure and/or staffing) to ensure the condominium documents and records are properly maintained and readily retrievable when required. As such, the argument that there are additional costs associated with producing these documents at the time of request - costs often in the hundreds of dollars - is indefensible. Requiring owners to pay for electronic access to their condominium documents is, in effect, double charging for the same service.


    Management companies have long exploited the need for condominium documents - quoting low management rates to secure contracts with condominium corporations and compensating by levying high document fees when they're requested. To level the playing field and help condominium corporations make informed decisions when hiring property management companies, the cost of document collection and maintenance should be included upfront in monthly management rates. Prohibiting document access fees through regulation would facilitate this, requiring property management companies to be more transparent with their costs and thus create a contract bidding process that is fairer to both management companies and to Albertans.

  • Considering intended use of condominium documents as a factor in determining whether fees should be charged is impractical.
    Management companies have argued that condominium sales are private transactions and that documents provided for this purpose somehow impose costs they believe they shouldn't have to bear. But it is the condominium owner's rights to have access to their property's documents specified in the Condominium Property Amendment Act's regulations, and how they intend to use them is therefore inconsequential. In addition to this, differentiating between the intended use of requested condominium documents - to sell a condo unit or other - as a mechanism for determining fees is unenforceable and thus impractical.


  • AREA opposes the recommendation for a dispute tribunal to arbitrate when management companies are accused of charging unreasonable fees.
    Putting the burden of policing management companies on consumers is an unfair and inefficient solution to a problem easily resolved by eliminating condominium document fees altogether. The cost of a tribunal, coupled with the time and hassle of the process - without any guarantee of a favorable resolution - will deter owners from pursuing complaints and thus reinforce the status quo. Charging excessive fees for condo documents is a systematic issue that requires a regulatory resolution. We reiterate that condo document provision is inherent to a management company's responsibilities, making any solution other than eliminating fees irrelevant.
Summary

AREA estimates that, in 2018, Calgarians and Edmontonians alone will pay nearly $3.2 million to management companies for property-related documents. That is $3.2 million for services condominium owners have already paid for in their monthly fees. This is unacceptable.

Most Albertans live in Calgary and Edmonton, where housing is deemed seriously and moderately unaffordable and where condominiums present an important, more economical alternative for homeownership. According to the Calgary Real Estate Board, the average price for a detached house in Calgary in January 2018 was $545,834, while the corresponding price for a unit within a high or low-rise condominium was $298,942. Furthermore, the annual household total income for condominium owners reported by Statistics Canada was more than $33,000 below that of other homeowners in 2011.

Charging fees for condominium documents adds unwarranted costs to condominium resale transactions and creates an unnecessary barrier to the mobility of middle-income Albertans. As such, AREA's position strongly supports removing fees for electronic copies of condo documents and setting appropriate maximum fees for printed copies and estoppel certificates, as a measure to protect Albertans from gratuitous charges. We encourage Service Alberta to make the recommended updates in the spirit of modernizing condominium legislation to better protect condominium owners.

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