Glossary

Accrual Basis Accounting

The keeping of accounts so as to show accrued earned income and accrued expense without regard to actual received income and disbursements.

Action

Legal proceedings brought by or against the Corporation and requiring, in specific instances, the delivery of written notice to all owners and mortgagees of the units of the Corporation’s intention to institute legal proceedings either on its own behalf or on behalf of any owner.

Agenda

A list of meeting activities in the order in which they are to be taken up, by beginning with the call to order and ending with adjournment. It usually includes one or more specific items of business to be discussed. It may, but is not required to, include specific times for one or more activities.

Annual General Meeting

A meeting of all owners held once each calendar year (but no more than 15 months after the previous AGM) according to the Act and Bylaws.

Annual Reserve Fund Report

A report on the status of the Reserve Fund, prepared by the Board or Manager and distributed to the owners.

Arbitration

A process where the disputing people present their case to a neutral outside party and that party makes the decision for them.

Arrears

Those portions of Condominium contributions that are overdue and unpaid.

As Built Drawings

The blueprints of the Condominium showing the actual physical location of all underground services, buildings, wiring, plumbing, heating, etc.

Asset

The real and personal property of the Corporation acquired for the use and enjoyment of the property, which owners can share and enjoy in the same proportions of their common interests. Anything owned that has value.

Audit

An examination of accounting documents and the supporting information to verify their correctness.

Auditor

A person licensed as a public accountant under the Regulated Accounting Profession Act appointed and removed according to Bylaws.

Balance Sheet

A report showing all the property or resources of the Corporation and money or liabilities owed.

Bareland Condominium

A Condominium where the unit owner takes title to the physical land as opposed to part of a building or air space. A bare land Condominium unit may or may not have a building on it.

Board of Directors

The elect representatives of the unit owners who assume the responsibility for the management of the Condominium property and its business affairs. Commonly referred to as the “Board”.

Budget

A plan expressed in financial terms which is designed to coordinate and control the various operations of a Corporation.

Budget Resolution

A motion adopted by the Board to accept the budget and levy Condominium contributions.

Bylaws

The written rules dealing with the daily operation of the Corporation and the duties’ and responsibilities of the board and owners which are adopted by special resolution and registered at Land Titles office.

Caveat

A prescribed form of notice that an interested party (the caveator) files with Land Titles advising a person of the caveator’s interest in the land. The Corporation’s right to overdue Condominium contributions may be the subject of a special caveat authorized under Section 39(7) of the Act.

Common Expenses

Expenses incurred by the Corporation in maintaining the common property and in carrying out the duties and responsibilities specified in the Bylaws and The Act.

Common Property

Those parts of the Condominium property that are shared and jointly owned by the unit owners, meaning all of the property except the units as set out in the plan.

Component

The individual line items in the Reserve Fund Study, developed or updated in the Physical Analysis.

Component Inventory

The task of selecting and quantifying Reserve Fund components. This task is accomplished through an on-site inspection, review of Corporation design and organizational documents and a review of established Corporation precedents and scheduled future components.

Condition Assessment

Assessment of the present condition of the Reserve Fund component. The task of estimating Useful life, Remaining Useful Life, and Repair or Replacement Costs for the Reserve Fund. Also referred to a as a Physical Analysis.

Condominium

The term applied to a specific type of property ownership rather than to any distinct style of building. A style of property ownership where the owner owns a unit and a share of the common property and is governed by the Bylaws in the use of his/her property.

Condominium Contributions

Each owner’s share of the Common expenses of the Corporation presently determined in proportion to the owner’s unit factors or another formula as specified in the Bylaws, under section 39 (1)(c) of the Act

Condominium Corporation

The legal entity created upon the registration of the Plan. The Corporation, unlike a private business corporation, does not enjoy limited liability and any judgment against the Corporation for the payment of money is also a judgment against each owner for the owner’s portion determined by the unit factors or other formula as specified in the Bylaws. Commonly referred to as the “Corporation”. A Corporation is a body of persons recognized by law as an individual entity having its own name and identity with rights, privileges and liabilities distinct from those of its members.

Condominium Manager

The person or company hired by the Corporation to carry out certain areas of the Board of Director’s delegated duties or to act as the agent of the Board. Referred to as the “Manager”.

Condominium Plan

A detailed plan of the layout and location of the development, its units, common property and, at times, exclusive use areas. It includes a survey of the land, building outlines and structural plans. It also includes the Condominium Additional Document or Plan Sheet which, amongst other things, records the Address for Service, Notices of Change of Bylaws and Notices of Change of Board Members filed with the Land Titles Office. Referred to as the “Plan”.

Condominium Property Act

The Alberta Condominium Property Act, R.S.A. 2010, C-22.

Contract

An agreement between two or more parties.

Conversion Development

A residential dwelling, commercial space, warehouse building or bare land, which is changed from single title to Condominium title. Usually, these buildings have been used for rental purposes before the conversion and may remain rental afterwards or the units may be sold to individuals.

Cost Estimates

The estimation of the costs of components based on current market prices, as used in a Reserve Fund Study.

Demand Letter

A written request to pay a claim (usually Condominium contributions or a rental deposit) that is due or to comply with Bylaws.

Developer

The company or persons who create the Corporation, usually for the purpose of selling the units for a profit.

Easement

A legal grant of rights to a person or persons which allows the person to pass over property not owned by that person.

Effective Age

The difference between Useful Life and Remaining Useful Life of components in a Reserve Fund Study. Not always equivalent to chronological age, since some components age irregularly.

Engagement Letter

A letter spelling out the conditions under which an audit will be undertaken by the auditor.

Estoppel Certificate

A document issued under corporate seal by the Corporations under section 39 (6) certifying specific information concerning the status of contributions by the unit owner toward common expenses, which the Corporation is prevented or stopped from denying once issued.

Exclusive Use Areas

Parts of the common property whose use is restricted to the owners of one or more units, i.e.: balconies, parking stalls, lockers.

Extraordinary General Meeting (General Meeting)

A meeting of the owners called between annual general meetings, usually initiated by a Bylaw prescribed minimum percentage of unit owners.

Financial Analysis

The portion of a Reserve Fund Study where current status of the Reserve Fund and a recommended annual Reserve Fund contribution rate are derived. The Financial Analysis is one of the two parts of a Reserve Fund.

Fiscal Year

The financial year for the Corporation as determined by the Board.

Foreclosure

To seek a court ordered sale of the unit to enable the Corporation to collect a debt owing, usually arrears, against the unit.

Funding Plan

A plan included in the Reserve Fund Study to recommend income levels for a Reserve Fund to offset anticipated expenditures from that Fund. The funding plan is part of the findings of the Reserve Fund Study.

Funding Plan Term

The number of years where projections are made to establish a funding plan. Typically, funding plan terms are 25 to 50 year projections.

General Ledger

A journal in which all transactions of income and expense are recorded for the month and/or cumulatively for the year to date.

Impeachment

A process set out in the Bylaws which enables owners, at an extraordinary general meeting, to remove one or more Board Members and replace them with other qualified persons until the next annual general meeting.

Improvements and Betterments

Anything added to or upgraded in a unit from the original condition of the unit when sold by the developer.

Information Meeting

A general meeting of the owners called by the Board to provide owners with information.

Information Statement

A written statement given by the Board of Directors under Section 44 of the Act, containing general information concerning the operation of and financial status of the Corporation.

Journal Entries

Specific items recorded in the general ledger. They are often identified with a reference code so that in a double entry system both parts of the transaction may be located.

Liability Insurance

Insurance obtained to protect the Corporation (and others) from costs of defending a lawsuit and paying any judgment awarded in lawsuits where others claim to have been injured (their body or reputation) or sustained losses caused by an action of the Corporation or Board.

Life Adjustment & Valuation

Adjustments made to the Useful Life, Remaining Useful Life, and Repair or Replacement Cost of each Reserve Fund components. These adjustments may be used on the findings of the Condition Assessment in Reserve Fund Studies.

Mediation

The process of two or more people negotiating their own solution to a dispute with the assistance of a neutral party.

Minutes

An official record of the business discussed and transacted at a meeting.

Mixed use Development

A Condominium complex that combines more than one Condominium style, such as residential, office and retail.

Mortgage

A conditional transfer of property pledged as security for the repayment of a loan.

Motion

A proposal formally made in a meeting, usually to take action, and upon which the others in the meeting will vote. Normally, a motion is phrased as: I move that we… Most motions are seconded and then discussed before the vote is taken.

Phased Development

Refers to the manner in which the developer completes and markets the Condominium development, usually meaning the developer builds and sells one part of the complex before completing the next part.

Physical Analysis

The portion of the Reserve Fund Study where the component inventory, condition assessment, and life adjustment and Valuation tasks are performed. This represents one of the two parts of the Reserve Fund Study.

Policy

A course or plan of action designed to influence future decision or actions.

Poll Vote

A vote by the owners, which is directed by the chairperson of the meeting and usually involves each entitled owner voting his or her share of the unit factors.

Proxy

A document used to authorize an individual, other than the person entitled, to vote at meetings on that person’s behalf. The proxy may be general in form or limited to a single meeting or issue.

Qualified Person

A person or company who is qualified under the requirements in the Regulation to provide reserve fund studies.

Quorum

A quorum is the minimum number of members of a deliberate assembly (a body that uses parliamentary procedure, such as a legislature)necessary to conduct the business of that group.

Regulations

The Condominium Property Regulations, Alberta Regulation 168/2000 with amendments up to and including Alberta Regulations 23/2001. An essential governing document that accompanies the Act and contains requirements and forms a Corporation will need to comply with or use.

Remaining Useful Life

Also referred to as “Remaining Life”. The estimated time, in years, that a Reserve Fund component can be expected to continue to serve its intended function. Components anticipated to be replaced in the initial year of the Reserve Fund Study have “zero” Remaining Useful Life.

Replacement Value

The current market price to replace a component without consideration for depreciation.

Representation Letter

A letter provided to the auditor that states that all information and pertinent records have been made available to the auditor and stating the author has no knowledge of any pertinent information that was not provided to the auditor.

Reserve Fund

The fund set aside by the Corporation for the repair and replacement of the common property, the units and the Corporation’s real and personal property that are not repaired or replaced annually, in accordance with the Act and Regulations. The appropriate level of funding must be determined by conducting a reserve fund study.

Reserve Fund Balance

Actual or projected funds, as of a particular point in time, used to defray the future repair or replacement of those major components that the Corporation is obligated to maintain. The Balance is the starting point of any Reserve Fund Study.

Reserve Fund Plan

A plan, prepared in accordance with the requirements in the Regulation and approved by the Board, based on a reserve fund study report, which identifies how the Board will raise the funds required, spend the money allocated, maintain the property to extend the life of components and meet the recommendations in the Reserve Fund Study report.

Reserve Fund Report

A written document describing the findings and recommendations of the Reserve Fund Study, provided to the Corporation by a qualified person.

Reserve Fund Study

An inspection conducted by a qualified person in accordance with the requirements of the Regulations, of the common property, the units and the real and personal property of the Condominium to determine the age of the components, their life expectancy, the cost of replacement of each component and the estimate of the funds needed by the Corporation to meet those replacement obligations. Also a budget planning tool which identifies the current status of the Reserve Fund and provides a stable and equitable Funding Plan to offset the anticipated major repair or replacement expenditures of components whose re-occurrence is more than one (1) year. The Reserve Fund Study consists of two parts; the Physical Analysis and the Financial Analysis.

Reserve Fund Study Provider

A person or company who is qualified under the requirements of the Regulations to perform reserve fund studies.

Resolution

A motion made either at a meeting or in writing upon which the owners/Board have voted in favour.

Rules and Policies

The in-house guidelines for owners within the Condominium complex. Normally passed by the Board. Are superseded by the Bylaws and the Act and probably cannot be legally enforced unless registered as a Bylaw.

Signing Authority

The persons authorized by the Board to sign cheques and other legal documents on behalf of the Corporation.

Special Assessment

An assessment for Condominium contributions levied on the unit owners of a Corporation in addition to annual Condominium contribution.

Special Resolution

A vote by the owners on a motion which requires acceptance by 75% of the unit owners entitled to vote and 75% of the total unit factors.

Title Search

A search of the records at Alberta Land Titles to disclose the name(s) of the owner(s) of a unit, the names and addresses of any mortgagors and the status of any encumbrances registered against the title.

Trade Name

The descriptive name by which the Corporation is known.

Trust Account

A bank account committed to the care of a person or party to manage in trust for another person or a party who owns the funds that it contains.

Unit Factors

The share of the common property allocated to each unit as denoted on the Plan and title to each unit.

Voting Rights

The voting rights of the Condominium owner should be clearly outlined in the Corporation Bylaws and must be referred to specifically each time they are called into use. For example, the voting rights can be determined by a percentage of the total unit factors or a percentage of the total units in the building. Section 26 (5) A & B of the Condominium Property Act, states all condominium contributions and assessments must be current to vote at the Annual General Meeting.

Writ

A writ (court order) is an order written by the court which orders the party for whom the writ is created to either perform and action or to stop performing an action. For instance, a writ may order a person to clean up a back yard which resembles a junkyard or it may order a person to stop dumping raw sewage into a public lake.