The provincial government has heard about Alberta condo owners facing big increases on their insurance rates, but at this time, is not considering a cap.
Officials were asked about the issue on Wednesday, at an event announcing changes to condo regulations.
“At Service Alberta, we’re responsible for the Condominium Property Act,” Service Alberta Minister Nate Glubish said. “The only piece of that legislation that talks about insurance is to say that condos need to have insurance for the full replacement cost of the building.
“As you can imagine, if there is a catastrophic event, we want to make sure that owners and residents are protected. That is the extent of our legislation related to insurance — to say you have to have it.
“In terms of regulating the insurance industry itself, that’s more of a Finance and Treasury Board portfolio. I can say we are aware of the increases that condos are facing across the province. We’ve been having some conversations with the Ministry of Finance and Treasury board — as well as with the insurance industry — but at this time, we’re still looking into these effects.”
Potentially capping condo insurance premiums wasn’t part of review, Glubish said.
“We have not talked about a cap at this time. We’re currently working with our colleagues in Finance and the insurance industry to understand all the factors at play that are leading to these increased costs,” he added.
Earlier this month, several Alberta condo owners spoke with Global News, saying insurance premiums had gone up dramatically in the last year.
Ryan Chernesky owns two units in a condo in Fort McMurray and is also on the condo board. He said last year’s premium on the condo building was approximately $51,000. The insurer would not renew and only two other companies were willing to take the risk, he said. The lowest quote was approximately $402,000 – an increase of 690 per cent.
Chernesky said he has never seen such a significant insurance premium hike.
“We’ve been told by the insurance companies that it’s to do with the 2016 wildfire and there is an increased risk associated now and various other reasons on a more global scale,” he said.
“We’re facing a real crisis right now because our condo fees are going up a lot simply because insurance has gone up dramatically,” he said.
The Insurance Bureau of Canada said unlike auto insurance, there is no cap for condo insurance premiums and insurers do not need to apply for a rate increase because it isn’t government mandated.
READ MORE: 900 insurance claims unresolved 2 years after Fort McMurray wildfire
Wednesday’s announcement was an update on condo rule changes. The United Conservatives wanted to take a closer look at the legislation the NDP introduced that was scheduled to take effect in July.
Glubish said his government heard feedback and complaints about unintended consequences of the NDP’s proposed regulations.
“That’s why, in June, I hit pause on the regulations, to give us an extra six months to take the time to work with the condo industry, with condo ownership groups, condo boards, property managers and everyone in between, to make sure that we took the time to get this right for everyone.”
The UCP’s changes will take effect Jan. 1, 2020. The adjustments affect disclosure of information, how annual general meetings are organized, sanctions, fees for documents and the qualifications for who can conduct reserve fund studies.
Key changes include:
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- Removing the requirement to provide the minutes of all board meetings in the hard-copy package for AGMs
- Changing the requirement to disclose draft AGM minutes from 30 days to 60 days after the AGM
- Changing the maximum fee for an estoppel certificate from $100 to $200, or $300 if rushed, and add a disclosure statement document fee of $100, or $150 if rushed
- Changing the per-document cost for paper documents from a $10 flat fee to $0.25 per page, or $10, whichever is more
- Allowing condominium corporations to borrow up to 15 per cent of their annual revenue as the default limit but also allow that limit to be changed through their bylaws
- Removing the requirement to provide 60 days preliminary notice of an AGM and accept owner submissions for the agenda
- Increasing allowed amounts for sanctions
- Eliminating tiered rates for deposits condominium owners provide to their corporation when renting out the unit they own and setting the maximum for these deposits at $1,000 or one month’s rent, whichever is higher
- Broadening the list of those who can conduct reserve fund studies
A big focus of the review was streamlining condo rules, making them easier to understand and also keeping condo fees from rising, the government said.
READ MORE: Alberta moves to ban adults-only apartments, condominiums
“The previous regulations would inevitably have led to increased condo fees for condo owners,” Glubish said. “I’m proud of the work we have done by listening to the concerns of Albertans, taking action immediately and working with condo owners, boards and managers to make thoughtful and sensible revisions.”
He said condos represent nearly a quarter of all homes sold in Alberta. More than 500,000 people live in condos in Alberta, which is the second-highest rate in all of Canada, after B.C.
READ MORE: Auto insurance premiums going up in 2020 for many Alberta drivers
The Condo Owners Forum Society of Alberta said updating the provincial regulations was long overdue. Terry Gibson said the society had been working on revisions since 2013.
“The devil is in the details,” he said on Wednesday. “Condo legislation is very complex so there was a lot of fine-tuning, simplification, where possible.
“It’s very difficult for the average owner to understand the condo legislation and regulations… I think, if anything, the changes have simplified things a little bit and certainly addressed some of those fine details that maybe some of us weren’t as knowledgeable about.”
Gibson said he’s “very happy” with the final result.
— With files from Julia Wong, Global News
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