What legislation and regulations govern condominiums in New Brunswick?
Do provincial legislation and/or regulations require that developers of new condominiums provide a new home warranty to buyers?
No. Some developers will offer their own home warranty or provide one through a third-party home warranty program.
Taxes & Additional Costs
What provincial and federal taxes do condominium buyers pay on their units?
Buyers pay Harmonized Sales Tax (HST) on new units but not on previously owned units.
If you are purchasing a re-sale condo, the federal portion of the HST will apply to your purchase if:
- You are buying the unit from someone who acquired and used the unit primarily (more than 50 percent) for business purposes (unless this was to earn long-term rental income);
- You are buying the unit from someone who has claimed input tax credits for improvements to the unit; or
- The unit has been substantially renovated. To find out what qualifies as a substantial renovation, see Substantial Renovations and the GST/HST New Housing Rebate, Canada Revenue Agency.
Be sure to enquire about the above before putting an offer on a re-sale condominium.
Are there any GST/HST rebate programs for condominium buyers?
Yes. Like other homebuyers, purchasers of condominiums can apply for a GST/HST New Housing Rebate. This rebate reduces the GST and the federal part of the HST on a declining scale, depending on the purchase price of the new home. For eligibility information, see GST/HST New Housing Rebate, Canada Revenue Agency.
Are buyers of new and re-sale condominiums responsible for any other charges levied by the Province?
Yes. They must pay:
- a $75 registration fee; and
- a land transfer tax, which is the higher of .5 percent of the sale price or of the assessed value of the property, whichever is greater.
Reserve Fund Requirements
Do provincial legislation/regulations require that all condominiums in New Brunswick have a reserve fund?
Yes. For condominiums with 11 or more units, contributions to the reserve fund are determined by a reserve fund study. A reserve fund study anticipates any major repairs and replacements that will be required in the next 30 years and estimates a budget to cover those expenses. Reserve fund studies must be completed every 10 years by a “qualified” person (such as an appraiser or an engineer) and be updated every three years.
For condominiums with fewer than 11 units, the amount in the reserve fund must be equal to 100 percent of the annual operating budget of the corporation, or a greater percentage if specified in the corporation’s bylaws.
How is a new condominium corporation registered?
Prior to registration, the developer submits a declaration and description of the property to the Director of Condominiums.
The declaration describes how the condominium is organized and operated. It also specifies details such as each owner’s proportionate interest in the common elements and their percentage share of the overall common expenses.
The description includes a plan of survey, construction and structural plans, and details of the unit boundaries.
The Registrar of Land Titles then registers the declaration, description and other documents. This creates a condominium corporation, which is a legal entity. The developer — who is now the owner of the condominium corporation — is now free to issue deeds or transfer documents to purchasers.
Sale of Units
What rules does the developer have to follow when selling units?
The developer must provide copies of a number of documents to a purchaser.
What documents is the developer obliged to provide to a buyer?
Before the purchase, the developer must provide the prospective owner with a copy of:
- The agreement of purchase and sale. For new condominiums, this includes:
- the condominium plan or proposed plan;
- a conceptual design of the entire development identifying the location, size, number and general style of the units or land;
- the declaration or proposed declaration; and
- the by-laws or proposed by-laws and rules respecting the use of the common elements.
- For conversion condominiums, this includes all the same documents as a new sale as well as:
- the most current building inspection report if the building has 10 units or less; and
- the most current reserve fund study if the building has 11 units or more.
After receiving any required documents, the purchaser has 10 days to review them. If anything in the documents affects the purchaser’s decision to buy the unit, the purchaser can make a written objection to the vendor during the 10-day period. If the two parties can’t reach an agreement, the agreement becomes void and the deposit must be returned to the purchaser, without interest or liability for any expenses incurred or damages sustained by the purchaser.
What documents must a condominium corporation provide a purchaser of a re-sale unit?
Upon request, the corporation must give the purchaser:
- An estoppel certificate. This information package covers key things buyers need to know including:
- Liens against the unit;
- Common expense contributions and how they are paid;
- How the reserve fund is collected;
- Capital expenses planned by the corporation;
- Insurance policies the corporation holds;
- Lawsuits against the corporation;
- A copy of the declaration;
- A copy of the bylaws; and
- A copy of the reserve fund study, if a study has been done.
The corporation must provide the estoppel certificate within 10 days of receiving a request for it or within 10 days of receiving payment of the fee charged by the corporation, whichever is later.
Estimating Operating Costs
Are there legislation/regulations that stipulate(s) what happens if a developer has inaccurately estimated the operational costs of a condo?
Rules for Initial Reserve Fund Savings
Is the developer of a new condominium obligated to put aside reserves as soon as the condominium is registered?
Yes. Once the condominium corporation is registered, the developer becomes an owner and must contribute.
Does the Province require a condominium to impose any bylaws and rules?
Yes. Condominium corporations must have bylaws that address matters such as the management of the property, the use and maintenance of the common elements, the corporation’s assets and the board of directors. The bylaws must allow the owners to make rules around the use of the common elements.
Does condominium legislation authorize the condominium corporation to borrow money?
Yes, condominium corporations require a vote of owners of at least 60 percent of the common elements to borrow money. The corporation, however, is not permitted to put these funds toward a mortgage against the common property.
Can a condominium corporation place a lien on an individual unit?
Yes, a condominium corporation can do so if the owner has not paid for an assessment, such as his or her contributions towards the common expenses, or for repairs. It also has the right to recover interest and reasonable legal costs and expenses it has incurred while collecting or attempting to collect the unpaid amount.
The lien expires after 90 days unless the corporation registers it. Once the lien is registered, it becomes enforceable and takes precedence over a first mortgage.
Elections & Meetings
What are the requirements for electing the board of directors and for its meetings?
To be elected to the board of directors, an individual must have attained the age of majority and be a legal owner of a unit.
At least three people must sit on the board if a condominium corporation has four or more units. There must be at least two people on the board if the corporation has two or three units.
All corporations must have annual financial statements prepared that show assets and liabilities, as well as income and expenses. At least 10 days before the annual owners’ meeting, the corporation must file a copy of the statements with the Director of Condominiums and mail or deliver a copy to each owner.
Changing the Governing Documents
How does a condominium corporation change its governing documents?
To change a condominium corporation’s declaration, description and bylaws, owners owning at least 60 percent of the common elements must vote for the change and the change must be approved by the Director of Condominiums and be registered.
Can an owner stop paying condominium fees if he/she is unhappy with the condominium’s board of directors and/or property management?
Rules Regarding Special Assessments
Do provincial legislation/regulations have rules regarding special assessments? If so, what are they?
Yes. Special assessments must be approved by a vote by owners of at least 60 percent of the common elements.
Expanding the Scope of the Condominium's Assets and Services
What about additional recreational facilities/services? Could a condominium corporation buy a golf course, for example? Could it change the services an owner expects to receive?
Yes, a condominium corporation can make substantial changes to its common elements and assets. Substantial changes include adding to, altering, improving or renovating the common elements. These changes must be approved by members who own at least 60 percent of the common elements.
The cost of these changes is considered to be a common expense and is paid out of the corporation’s reserve fund.
Other, less substantial, changes may be voted on by owners of a majority of the common elements. The cost of these changes is considered to be a common expense and is paid out of the corporation’s operating fund or contingency fund.
Other Important Things About Buying a Condominium in New Brunswick
Do provincial legislation/regulations govern renting or leasing a condominium unit?
The Residential Tenancies Act applies to a tenancy agreement between an owner and an occupant.
Owners should consult their condominium corporation’s declaration and bylaws for details about renting. Typically, owners who plan to rent out their units must notify the corporation, in writing, and provide their future address and the amount of the monthly rent.
Some condo developments permit only long-term leases, whereas others may allow renting for a single night. The declaration will specify.
For information on landlords’ and tenants’ rights and responsibilities in New Brunswick, see Your Guide to Renting a Home, Provincial Fact Sheet — New Brunswick.
What other constraints do provincial legislation/regulations put on condominium corporations, their boards of directors, bylaws and management?
There are none.
Is There a Process for Handling Disputes or Complaints?
An owner can file a written complaint with the board of directors if he or she has a dispute that involves the condominium’s bylaws, the Act, the regulations or the corporation. If the matter remains unresolved, the owner can pursue mediation and/or arbitration as an alternative to court action.
Service New Brunswick
New Brunswick’s chief provider of front line services to the public, Service New Brunswick publishes “Owning a Condominium in New Brunswick: What Do I Need to Know?”
Go to www.snb.ca/e/2000/2001e.asp for Service New Brunswick office locations.
Canadian Condominium Institute (CCI), New Brunswick Chapter
An independent organization that deals exclusively with condominium issues and represents all participants in the condominium community.