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Northwest Territories Fact Sheet

Part of the Condominium Buyer's Guide.

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Date Published: March 31, 2018

Governing Legislation

What legislation and regulations govern condominiums in the Northwest Territories?

  • Condominium Act (PDF)
  • Condominium Regulations (PDF)

Warranty Programs

Do NWT legislation and/or regulations require that developers of new condominiums provide a new home warranty to buyers?

No.

Taxes & Additional Costs

What NWT and federal taxes do condominium buyers pay on their units?

Territorial tax: There is no territorial sales tax in the Northwest Territories.

Federal tax: Buyers pay Goods and Services Tax (GST) on the price of new units but not on previously owned condominiums.

Buyer Beware:

If you are purchasing a re-sale condo, 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 charges levied by the Northwest Territories?

Yes, buyers are responsible for registration fees, including:

  • A transfer fee: For property valued at $1 million or less, the rate is $1.50 for each $1,000 of value or part thereof. There is a minimum fee of $100. For property valued at more than $1 million, the rate is $1,500, plus $1 for each $1,000 of value or part thereof in excess of $1 million; and
  • A mortgage fee: The rate is $1 for each $1,000 or part thereof of the mortgage on the property. (If the mortgage were to exceed the value of the property, the fee is based on the value of the property.) There is a minimum fee of $80.

Reserve Fund Requirements

Do NWT legislation/regulations require that all condominiums in the Northwest Territories have a reserve fund?

Yes. A capital reserve fund study helps owners determine how much should be in the fund. This study must be conducted at least every five years by a qualified individual, such as a Certified Reserve Planner or professional engineer. A written report must accompany the capital reserve study.

The capital reserve fund serves as a guideline. The condominium corporation is not obligated to set aside the recommended amount.

If a condominium has fewer than 13 units, the corporation can carry out the functions of a qualified person and conduct the capital reserve fund study, if owners authorize this.

Condominiums with fewer than seven units are not required to conduct a capital reserve fund study if this exemption has been approved by a special resolution.

Condominium Registration

How is a new condominium corporation registered?

Prior to registration, the developer submits a declaration and plan of the property to the Registrar of Land Titles, as well as any initial bylaws. The declaration describes how the condominium is organized and operated, such as the percentage of ownership of each unit and the proportion in which owners are to contribute to the common expenses. The plan shows the layout and location of the development and delineates the boundaries of each unit. Once these documents are registered, a title is issued for each unit. The condominium corporation is created, which is now a legal entity.

Sale of Units

What rules does the developer have to follow when selling units?

The developer must:

  • take all reasonable steps to sell the property’s residential units without delay, except for units that the developer intends to occupy or lease;
  • take all reasonable steps to transfer units to purchasers without delay;
  • hold in trust all money (other than rents or security deposits) collected from purchasers on behalf of the condominium corporation until they take ownership; and
  • provide purchasers with certain documents and information.

What documents is the developer obliged to provide to a buyer?

A developer must provide a purchaser with:

  1. Documents:
    • a purchase agreement;
    • the declaration or proposed declaration;
    • the bylaws or proposed bylaws; and
    • the lease, if the land on which the unit is situated is leased, and a statement by the developer as to whether the provisions of the lease are in good standing and have not been breached.
  2. A copy or description of any:
    • management agreement or proposed management agreement;
    • recreational agreement or proposed recreational agreement;
    • mortgage that affects or proposed mortgage that may affect the title to a unit or proposed unit; and
    • lease or transfer or proposed lease or transfer of common elements.
  3. Statements outlining:
    • the number and type of parking spaces and other exclusive-use areas included in the purchase price and any additional monthly charge for the use of the parking space or exclusive-use areas;
    • the number or proportion of the units that are occupied by tenants or designated for occupancy by tenants rather than for sale;
    • whether a caretaker’s suite is included in the condominium;
    • the number of units, if any, designed for non-residential use and their percentage ownership;
    • the estimated budget for the corporation, the estimated common expenses, and the basis for  these estimates;
    • how the developer is allocating or disposing of parking spaces that are not for the exclusive use of a unit; and
    • replacement or capital reserve fund information.

The developer must also deliver to the purchaser a copy of the condominium plan (or proposed condominium plan) and the Condominium Act and Condominium Regulations.

If a buyer decides not to purchase, the buyer can rescind the purchase agreement, in writing, within 10 days after both parties have signed it. However, a buyer may not rescind a purchase agreement if all of the documents and information referred to in the section What documents is the developer obliged to provide to a buyer? are delivered to the buyer not less than 10 days before the parties sign the purchase agreement.

The developer will have to provide additional documents and information, particularly if the purchaser is buying

  1. a bare land unit,
  2. a unit in a building that has been converted into a condominium, or
  3. a unit in a proposed leasehold condominium.

What documents must a condominium corporation provide a purchaser of a re-sale condominium?

A purchaser can request a variety of information from a condominium corporation. The request must be in writing and the condominium corporation must provide the information, in the form of a certificate, within 10 days after receiving the request.

Depending on what information is requested, the certificate may include:

  1. Statements setting out:
    • the amount of any contributions due and payable in respect of a unit;
    • the amount of the monthly contributions and the basis on which that amount was determined;
    • the amount of the capital reserve fund;
    • any structural deficiencies that the corporation has knowledge of at the time of the request in any of the buildings that are included in the condominium plan, except those constructed on bare land units;
    • the address for service of the corporation;
    • the names and address for service of the directors and officers of the corporation;
    • additions, alterations or improvements to the common elements, changes in the assets of the corporation and changes in a service of the corporation that are substantial and that the board has proposed but has not implemented, together with a statement of the purpose of them; and
    • the number of units that were rented out in the preceding year.
  2. Copies of:
    • the most recent financial statements of the corporation;
    • the current budget of the corporation;
    • the most recent capital reserve fund report, capital reserve fund plan and annual report in respect of the capital reserve fund;
    • the declaration, bylaws and rules of the corporation; and
    • any minutes of a general meeting of the corporation or of the board.
  3. Information about:
    • the management of the property;
    • the recreational or other use of the common elements;
    • Any lease or exclusive use agreement respecting the possession of a part of the common elements, including a parking stall or storage unit;
    • any action commenced against the corporation and served on the corporation;
    • any unsatisfied judgment or order for which the corporation is liable;
    • any written demand made on the corporation for an amount in excess of $5,000 that, if not met, may result in an action being brought against the corporation; and
    • the insurance policies maintained by the corporation.

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?

Yes. The developer must make a minimum contribution of 10 percent of the annual operating expenses. Once the developer owns less than 50 percent of the common elements and the first reserve fund plan has been approved by the owners, the developer’s contribution is determined in the same manner as any other owner’s.

Governance Requirements

Does the Northwest Territories require a condominium to impose any bylaws or rules?

No, the legislation does not require this, but a condominium corporation may make, amend or repeal a bylaw by passing a special resolution. Through its bylaws, the corporation can make reasonable rules governing the use of common elements.

Does condominium legislation authorize the condominium corporation to borrow money?

No.

Can a condominium corporation place a lien on an individual unit?

Yes, it can if the unit owner has not paid his or her condominium fees or owes money for work or repairs that the corporation has been required to do on the owner’s behalf.

The corporation can enforce a lien in the same way a mortgage is enforced.

Elections & Meetings

What are the requirements for electing the board of directors and for its meetings?

Each condominium’s declaration or bylaws set out details about the board of directors, such as how many owners sit on the board, their qualifications, term in office and pay.

An annual general meeting of owners must be held within six months of the corporation’s financial year end. Its agenda must include:

  • approval of the financial statements for the corporation’s preceding fiscal year;
  • approval of an annual operating budget for the corporation’s present fiscal year;
  • a review of the capital reserve fund plan and annual report in respect of the capital reserve fund, and approval of the owner’s contribution to the capital reserve fund for the corporation’s present fiscal year;
  • a review of the corporation’s current insurance requirements; and
  • the election of members of the board.

The corporation must distribute copies of the financial statements and the annual budget to owners at least seven days before each annual general meeting.

Changing the Governing Documents

How does a condominium corporation change its governing documents?

A condominium can change its declaration and plan if it has the written consent of people owning at least 80 percent of the common elements.

Amendments to bylaws require:

  • the written consent of people owning at least 66 2/3 percent of the common elements; or
  • a vote by those owning at least 66 2/3 percent of the common elements who are present at a meeting or who are voting by proxy.

Changes to the declaration, plan and bylaws take effect once they have been registered at the Land Titles Office.

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 NWT legislation/regulations have rules regarding special assessments? If so, what are they?

No. The declaration and bylaws can provide for rules, but unless otherwise provided in its declaration, a condominium corporation collects special assessments in the same proportion as it collects contributions to its annual operating expenses.

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 66 2/3 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 on what is in its declaration.

Less substantial changes to the condominium’s common elements or assets may be voted on by a majority of members.

Other Important Things About Buying a Condominium in the Northwest Territories

Do NWT legislation/regulations govern renting or leasing a condominium unit?

Yes, if an owner plans to rent his or her unit to a tenant, the owner must provide the condominium corporation with:

  • written notice of the intention to rent;
  • the tenant’s name; and
  • an address where the owner can be served with notices.

The owner must also inform the corporation when the unit is no longer rented. Some condominiums may have a bylaw requiring a security deposit when renting a unit.

If an owner’s contributions to the common expenses are overdue, or if the corporation has a judgment requiring the owner to pay a sum to the corporation, the bylaws may specify that the tenant pay rent directly to the corporation instead of to the owner.

A tenant must comply with the condominium corporation’s bylaws. If a  tenant doesn’t comply or if he or she damages the common property, the bylaws  may stipulate that the corporation can apply to a rental officer under the Residential  Tenancies Act for an eviction order or to exercise the owner’s rights as  the landlord to obtain possession of the unit.

For information on landlords’ and tenants’ rights and responsibilities in the Northwest Territories, see  Your Guide to Renting a Home, Territorial Fact Sheet — NWT.

What other constraints do NWT legislation/regulations put on condominium corporations, their boards of directors, bylaws and management?

There are none.

Is there a process for handling complaints or disputes?

If an owner has a dispute with the developer, the board of directors or a resident (another owner or their tenant), the owner should speak directly with that individual to try to resolve the problem.

If the conflict involves the Condominium Act, the declaration, the bylaws or the corporation, the owner may make a written complaint to the board of directors, and seek legal advice if the matter is not resolved.

If an owner or anyone with a registered interest in a unit believes that there has been improper conduct by the developer, a corporation, a director or an employee of a corporation or an owner, he or she can apply to the courts to resolve the situation.

Department of Justice

Administers justice in the Northwest Territories; the Department  publishes:

  • Buying a Condominium: A User’s Guide
  • Owning a Condominium: A User’s Guide

Department of Justice, Government of the Northwest Territories
PO Box 1320
Yellowknife, NT, X1A 2L9
https://www.justice.gov.nt.ca/en/

Canadian Condominium Institute (CCI), contact North Alberta Chapter
An independent organization that deals exclusively with condominium issues and represents all participants in the condominium community.
www.ccinorthalberta.com/

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Date Published: March 31, 2018
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