The transition from a developer-controlled board of directors to an owner-controlled board of directors is one of the most important milestones in a condominium project. In Alberta, this “turnover” process is governed by the Condominium Property Act, RSA 2000, c C-22 (the “Act”) and the Condominium Property Regulation, AR 168/2000 (the “Regulation”). Developers, owners, lenders, and condo boards all have a stake in ensuring that the first annual general meeting (the “AGM”) is conducted properly and in accordance with the Act and Regulation, as failure to comply can lead to costly disputes. 

The Act requires that when a developer registers a condominium plan, the developer shall, within 90 days from the day that the certificates of title to units representing 50% of unit factors have been issued in the name of the purchasers, convene a meeting of the condominium corporation at which a board must be elected. This is referred to as the “Turnover Meeting”. If the developer does not convene a meeting of the condominium corporation within the aforementioned time period, an owner may convene the meeting. At the Turnover Meeting, the developer must hand over the following documents and records that the newly elected condo board needs to govern the condominium effectively: 

1. all warranties and guarantees on the real and personal property of the condominium corporation, the common property and managed property;
2. structural, electrical, mechanical, and architectural working drawings and specifications;
3. all agreements to which the condominium corporation is a party;
4. any building assessment reports and reserve fund reports; 
5. proposed budget and financial statements of the condominium corporation;
6. condominium plan and bylaws; and
7. any other prescribed document under the Regulation.* 

*please note the above list is not an exhaustive list of items that need to be provided at the Turnover Meeting. For a list of all items required to be delivered, please refer to section 16.1(1) of the Act and section 20.2(1) of the Regulation.

Common issues related to Turnover Meetings include: failing to call the AGM on time, incomplete financials, not disclosing all contracts, and failing to provide the technical building documents. The best way to avoid costly disputes and litigation for a developer is to ensure transparency and compliance. Such transparency and compliance suggests that a developer should keeping clear and separate financial records from day one, engaging qualified auditors and reserve fund consultants early, providing disclosure as per the Act, etc. 

The Turnover Meeting is more than just a formality, it is the legal and practical handoff of responsibility from the developer to the owners. Done properly, it builds trust and sets the foundation for a well-run condominium corporation. Done poorly, issues may arise. 

For more information, please contact Usama (Sam) Rashid at urashid@walshlaw.ca or any member of our Walsh team and we would be happy to answer your questions.

Note: This article is of a general nature only. Tax laws may change over time and should be interpreted only in the context of particular circumstances. These materials are not intended to be relied upon or taken as legal advice or opinion.