In New Brunswick, each condominium corporation is first approved by the Director of Condominiums. The Director approves the declaration and description, assigns a legal name to the corporation (ie. York County Condominium Corporation No. 250), prepares a certificate of approval, and delivers a copy of the documents to the registrar of Land Titles. The registrar of Land Titles registers the declaration, description and other documents under the Land Titles Act. The registration of a declaration and description creates the corporation whose members are the unit owners. This includes the developer, who may own all or most of the units.
Hierarchy of Governing Documents
It is important to note that there is a hierarchy of governing authority among these documents. The New Brunswick Condominium Property Act (Chapter C-16.05) is the utmost governing authority. It, along with the Regulations under the Act, supersedes the Declaration, By-Law, and Common Element Rules.
This happens whenever there is a conflict of what is stated in the Act versus what is stated in the other documents. The next document in the line of authority is the Declaration supported by the Description. Next in order of authority is the By-Law, which often includes Common Element Rules. Amendments to any document must be consistent with those above it in the hierarchy. For example, common element rules must be consistent with the Act, declaration & description and by-law.
Making Changes to Declarations and/or By-laws
Changes can be made to a condominium corporation’s declaration or by-law. However, there is a precise process that must be followed.
- Any changes must involve a vote of the owners owning 60% (or greater percentage if defined by the condo corporation’s declaration), as required by the Act in section 43(1) and section 32(3).
- Legal advice is recommended to process the changes.
- The Director of Condominiums must approve the changes.
- The approved changes must be registered in the land titles office.
If this process is not followed, the documents are not valid and are not enforceable.
Why would condominium corporations want to make changes? When a condominium is created by a developer, often the same documents are used. But sometimes these documents are not the most appropriate fit for every condominium corporation. For example, documents may include references for dealing with elevators that do not apply in a townhouse condo development.
Similarly, many condominium corporations attract different segments of the population with different interests and needs. A condominium’s governing documents can be revised to address these needs. For example, if a building chooses to be a non-smoking building or if a building chooses to be pet friendly, they may wish to change their documents to reflect this.
Likewise, some documents have very high percentage requirements for voting on matters. A percentage of 85% may be difficult to achieve, and not because owners are against changes. Some owners choose to not participant, while others are not always present at meetings. These absent voters can count as a “No” vote and make it difficult for a corporation to approve any plans. For example, according to New Brunswick’s Act, any moneys spent from the Reserve Fund requires a majority vote of the owners representing at least 60% ownership in the corporation. But if a condo corporation has 85% defined in its declaration, then a vote representing at least 85% ownership is required for approval of important repair and replacement items. Changing the percent to 60% would significantly improve planning for major repair and replacement.
So, what’s the first step in making changes to your Declaration and/or By-Law? Many condos think the first step is to strike a committee to review the documents and suggest changes. In my experience, this results in long meetings, arguments over semantics, and frustration. There is a better way to proceed.
- A document review is a good first step to ensure familiarity of all of your documents. But the language of these documents can often be daunting. There are professionals who can assist you with the document review process and discuss their finding with the Board of Directors.
- Useful changes have already been made (and passed approval by the Director of Condominiums) by a number of condo corporations in the province. You would be well advised to consider the changes they made and discuss your ideas with an experienced professional, FIRST. This could save lots of time and provide good advise for making changes that are in the best interest of your condo corporation.
- Next, the Board of Directors needs to discuss and approve the resolution to amend the documents.
- Next, you will need to hold a General Meeting to discuss the changes and the rationale for making them. This is a good opportunity to explain why the changes will benefit the corporation, what the impact will be, and how the Board arrived at this decision. You could also receive good feedback from the owners that you may want to consider.
- Next, you will need to hold a General Meeting to respond to any final questions and vote on the changes.
- Next, hire a lawyer who is familiar with condominium documents. Take your changes to a lawyer to complete the process, which includes final approval from the Director of Condominiums and having the documents registered at the land titles office. A lawyer familiar with condominium law will prove invaluable in ensuring your document amendments are enforceable and defendable.
- Finally, ensure all owners are given a copy of the new documents. It’s also a good idea to summarize the changes and hold an information meeting to review them with the owners. This allows an opportunity to answer questions and ensure everyone is aware of the changes.