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Governing Legislation
What legislation and regulations govern condominiums in Prince Edward Island?
Warranty Programs
Do provincial legislation and/or regulations require that developers of new condominiums provide a new home warranty to buyers?
No. Some developers 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?
Provincial tax: There is no provincial sales tax on new or re-sale condominiums.
Federal tax: Buyers pay Goods and Services Tax (GST) on new units but not on previously owned units.
Buyer Beware:
If you are purchasing a re-sale condo, the GST 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 your 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. These are:
- a real property transfer tax, which is 1 percent of the property’s purchase price or of its assessed value, whichever is greater;
- a registration fee for deeds of mortgage of $77.25 to $453.65 depending on the amount of the principal sum of the mortgage; and
- a registration fee for deeds of conveyance that ranges from $77.25 to $463.65, depending on the value of the property.
Reserve Fund Requirements
Do provincial legislation/regulations require that all condominiums in Prince Edward Island have a reserve fund?
No.
Condominium Registration
How is a new condominium corporation registered?
The developer submits a declaration and description of the property to the Registrar of Deeds. The declaration describes how the condominium is organized and operated, such as the proportion in which owners are to contribute to the common expenses. The description includes information such as a survey plan of the boundaries of each unit and the common elements.
Once these documents are registered, a title is issued for each unit. The condominium corporation is created, which is now a legal entity that owns all of the common spaces and facilities.
Purchasers should review and understand the contents of both the declaration and description carefully before they buy. To change either document requires the consent of all of the condominium’s owners and anyone else who has a mortgage or other debt registered against the units and common interests.
Sale of Units
What rules does the developer have to follow when selling units?
Under the Condominium Act, developers must:
- take all reasonable steps to sell without delay the property’s residential units other than any units subject to a prior lease;
- take all reasonable steps to deliver to the purchaser without delay a registrable deed or transfer of the unit;
- hold in trust all money (other than rent or occupancy charges) collected from purchasers on behalf of the condominium corporation until they take ownership; and
- deliver to purchasers copies of certain documents (see below).
What documents is the developer obliged to provide to a buyer?
The developer must provide a copy of:
- the declaration;
- parts of the description that apply to the unit and the exclusive use of the common elements;
- a statement of the intended recreational or other amenities and any conditions that apply to them;
- any bylaws or rules governing the use of common elements;
- any agreement for the management of the property or insurance trust agreement; and
- a budget statement prepared by the developer if the sale is entered into within the year immediately following the registration of the declaration and description.
What documents must a condominium corporation provide a purchaser of a re-sale condominium?
With the consent of the current owner, the purchaser can request that the corporation provide a certificate that indicates whether or not the current owner has defaulted on his or her condo fees. The corporation must provide the certificate within seven days of receiving a request for it.
Estimating Operating Costs
Are there legislation/regulations that stipulate what happens if a developer has inaccurately estimated the operational costs of a condominium?
No.
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?
No.
Governance Requirements
Does the Province require a condominium to impose any bylaws and rules?
No, the legislation doesn’t require this.
A condominium corporation may, however, make its own bylaws if this is voted on by members who own 66 2/3rds percent of the common elements (or a greater percentage, if specified in the condominium’s declaration).
If a condominium’s bylaws permit, members can make their own rules around the use of the common elements, provided these members own a majority of the condo’s units.
Does condominium legislation authorize the condominium corporation to borrow money?
The Condominium Act specifies that condominiums may make bylaws authorizing the borrowing of money.
Can a condominium corporation place a lien on an individual unit?
Yes, if an owner doesn’t pay his or her contributions to the common expenses. The lien expires in three months unless the condominium corporation registers a notice of lien at the Registry Office within that time.
A lien may be enforced the same way as a mortgage, but it doesn’t take priority over mortgages or other debts registered against the property.
Elections & Meetings
What are the requirements for electing the board of directors and for its meetings?
The board of directors is elected by members of the corporation. There must be at least three members on the board.
A corporation shall hold an annual meeting of the members not more than three months after the registration of the declaration and description, and subsequently not more than fifteen months after the holding of the last preceding annual meeting.
The board may, at any time, call a meeting of the members for the transaction of any business.
The board must call and hold a meeting if it receives a written request from members who together own at least 25 percent of the common elements. If it doesn’t do so within 30 days of receiving the request, any member who requested the meeting may call the meeting and it must be held within 60 days of receiving the request.
Members of the corporation must receive at least 10 days’ written notice of every meeting. This notice must specify the place, date, hour and nature of each meeting.
Changing the Governing Documents
How does a condominium corporation change its governing documents?
To change the condominium’s declaration and description there must be consent from:
- 100 percent of all owners and anyone else who has a mortgage or other debt registered against the units and common interests.
To change the condominium’s bylaws there must be a vote of members who:
- own 66 2/3rds percent of the common elements, or a greater percentage if specified in the declaration.
All changes to the declaration, description and bylaws must be registered with the Registrar of Deeds to be effective.
Making Payments
Can an owner stop paying condominium fees if he/she is unhappy with the condominium’s board of directors and/or property management?
No.
Rules About Special Assessments
Do provincial legislation/regulations have rules regarding special assessments? If so, what are they?
No.
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? Can 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 80 percent of the common elements.
Owners who disagree with these changes can ultimately request the condominium corporation to purchase their units and common interests. The corporation may be obligated to do so, depending what is in its declaration.
Other, less substantial, changes may be voted on by a majority of members.
Other Important Things About Buying a Condominium in Prince Edward Island
Do provincial legislation/regulations govern renting or leasing a condominium unit?
Owners have a basic legislated right to rent out their units under the Rental of Residential Property Act. If there are any restrictions on renting, they must be stated in the condominium’s declaration. For information on landlords’ and tenants’ rights and responsibilities in Prince Edward Island, see Your Guide to Renting a Home, Provincial Fact Sheet — Prince Edward Island.
What other constraints do provincial legislation/regulations put on condominium corporations, their boards of directors, bylaws and management?
None.
Is there a process for handling disputes or complaints?
There is nothing in Prince Edward Island’s condominium legislation that addresses this. Owners with unresolved disputes can take the matters to court, or seek alternative conflict resolution services.
Resources
Canadian Condominium Institute (CCI), contact Nova Scotia Chapter
An independent organization that deals exclusively with condominium issues and
represents all participants in the condominium community.
www.ccinovascotia.ca
