Ask Charles Consumer Questions

You’ve got questions. He’s got answers.

Charles Stevenson is the Registrar at the Real Estate Council of Alberta. Charles knows that buying and selling a home can be confusing, but it doesn’t have to be. “Ask Charles” is a question and answer column for consumers about buying and selling property in Alberta.

The “Ask Charles” column runs in GreatNews Publishing’s community newsletter publications in Calgary, in Calder Publications’ Community League Newsletters in Edmonton, in Black Press’s Your House, Your Home publication in Red Deer, and in the Lethbridge Herald’s Focus on Lethbridge and area real estate in Lethbridge.

Check out Charles’ advice below. If you have a new question for Charles, please email askcharles@reca.ca.

 


I did all of my homework before buying a condominium, and I think I bought a good one. Now I’m here and I want to make sure it remains a positive experience. What can I do?

You’re right to want to keep the condominium you’re in a positive experience; not only is that better for you as an owner, but it will also help your resale value.

When you bought the condominium, you likely received a number of documents to review—this should have included the corporation’s bylaws, a budget, a reserve fund study, and a reserve fund plan.

You may have originally hired someone to review the documents for you, but as an owner now, you want to make sure you understand what these documents are and what they mean. These are four of the most important condominium documents:

  • bylaws – every condominium corporation has bylaws. The bylaws outline the rules by which the Board of Directors, and individual owners, have to abide. If you don’t abide by the bylaws, the Board of Directors may have the authority to fine you. Make sure you know and understand the bylaws for your condominium.
  •  budget – each condominium corporation has an annual budget that outlines revenue (from condominium fees) and expenses (capital and operational) for the coming year. The corporation budget shows you how the Board of Directors is spending the corporation’s money.
  • reserve fund study – this important document analyses the state of the common property of a condominium corporation. It assists a condominium corporation in planning future capital expenses, and ensuring the corporation will have enough money in its reserve fund. It should contain:
    •  an inventory of all common property that may need repair/replacement within 25 years
    • information about the current condition of common property and an estimate of when each component may need repair/replacement
    • estimated costs of repairing/replacing each component of the common property
    • the life expectancy of each repaired/replaced component of the common property
    • current amount in the reserve fund
    • the recommended amount of money that should be added to the reserve fund to ensure necessary repairs/replacements occur
  • reserve fund plan – this is a document the Board of Directors can develop based on the results of the reserve fund study. It sets out how the Board of Directors will address the revenue and expenses required to meet the long-term capital needs of the condominium. The Reserve Fund Plan should:
    • identify the capital expenses to be incurred by the condominium corporation
    • outline the timetable over which these expenses will be incurred
    • indicate the method of funding and the amount needed for maintaining the reserve fund

The other thing I want to emphasize is the importance of getting involved in your condominium corporation. Remember that a condominium isn’t just a place to live. When you buy a condominium, you’re buying into a corporation, which means joint ownership of the corporation’s assets. Getting involved as a member of the Board of Directors provides you with the opportunity to affect how the corporation is run because you will be part of the decision-making process. You’ll also have better access to information about the financial health of the corporation.

Want to share this by email or on social media? You can link directly to the article: What can I do to make sure condo living is a positive experience?


My real estate agent gave me a comparative market analysis when we set the listing price for my home, but now a buyer’s lender wants an appraisal done on the property. What’s the difference?

That’s a good question. There are some very important distinctions between a comparative market analysis (CMA) and an appraisal.

A CMA is a method of property valuation real estate professionals use to estimate the value of residential properties; a CMA provides a range of value. This helps sellers set a listing price for their property. CMAs examine the prices at which similar properties in the same area have recently sold.

A real estate appraisal, on the other hand, is a formal, impartial estimate or opinion of value, usually in writing, of a specific property, as of a specific date, which is supported by the presentation and analysis of relevant data pertinent to a property. Appraisals provide a defined value for the property, rather than a range as in a CMA.

Real estate appraisers in Alberta need a licence as an appraiser from the Real Estate Council of Alberta. They require special training and experience before they become full appraisers. Their methods for providing an appraisal go beyond using the sold prices of similar properties to arrive at an appropriate listing price.

When a real estate professional provides a CMA to a seller or potential seller, they need to ensure the seller understands the following: it hasn’t been prepared by a licensed real estate appraiser; it doesn’t comply with appraisal standards; no one should rely on it as an appraisal; and, it can’t be used for financing, civil proceedings, income tax purposes, or financial reporting purposes.

The only thing a CMA is supposed to be used for is to help set a listing price. That’s why a buyer’s lender may want to do an independent appraisal on a property. Simply put, the lender wants to make sure the property is worth what the buyer is paying for it. Just because other homes nearby have sold for a similar amount, it doesn’t mean a lender will be satisfied the home is worth what the buyer is paying for it.

If the buyer were to default on the mortgage and the property were to go into foreclosure, the lender wants to make sure it can recoup the money it has lent on the property. The lender will be more confident in its lending by reviewing an appraisal for the property.

Want to share this by email or on social media? You can link directly to the article: What is the difference between a comparative market analysis and an appraisal?


I’ve taken possession of my new home, but pictures, sold price, and its address are still on the listing agent’s website, advertised as sold. I want them to take down the pictures and address. Can I make them?

It depends if the information they post on their website is personal information or not. Personal information is defined in the Personal Information Protection Act as information about an identifiable individual. This means that if the information could identify you, it’s personal information, and someone needs your consent to use it.

In real estate, a picture of the exterior of your house, information about its neighbourhood, and even the address are likely not personal information. All of that information is readily available on sites such as Google Maps, but the law is less clear when this information is combined with a statement that the property was just sold, and at a certain price.

Though it has not been tested in court yet, this combination of information could be considered personal information. It’s because of legal grey areas like this that RECA recommends real estate professionals get written consent from buyers of their listings if they want to continue advertising a sold listing after possession takes place. Once possession takes place, the seller is no longer the person who provides that consent; it’s the new owner – the buyer.

If there is any doubt about whether or not there is personal information in an advertisement, real estate professionals should try to get written consent from the property owner before advertising, or don’t include the information in the ad.

If you are concerned that a real estate professional’s website contains your personal information through posting a sold listing, talk to the real estate professional in question. There are strict confidentiality rules for real estate professionals, and privacy legislation may apply too.  You can also bring the issue to the real estate agent’s broker.

You may not be able to make a real estate professional take an ad down if it doesn’t contain your personal information, but if you’re still uncomfortable with it because you believe it shares too much about your property, a true professional should be open to hearing your concerns and working with you to address them.

Want to share this by email or on social media? You can link directly to the article: I’m the new owner. Can I make the listing agent remove the listing from their website?


There was a major hail storm after a seller accepted my offer to purchase their home, and the house needs a new roof. Who is responsible for it?

Until the deal closes and you take possession of the property, the seller is responsible for the property. Any damage to the property or to the items included in the sale, are the sole responsibility of the seller until your purchase funds are transferred and you take possession of the home.

When you take possession, the property – and its inclusions (appliances, etc.) – should be in the same condition as when you viewed it and submitted your offer to purchase.

Even if the property is vacant, and has been for weeks, it is still the seller’s responsibility to maintain home insurance on the property.
As the buyer, you should make sure you arrange for your home insurance to begin on your possession day, even if you aren’t moving in right away. As soon as you take possession, insuring the property is your responsibility.

If something such as a hail storm damages the property in the time between the seller accepting your offer and possession day, have your agent talk to the seller’s agent to confirm the seller is handling the damage. If the seller confirms they’re handling the repairs, you may wish to add an addendum to your accepted offer to purchase that outlines the seller’s responsibility to replace the roof prior to possession day, or you may ask the seller to agree to you holding back a small portion of the purchase funds until the roof is repaired. Make sure any agreements between you and the seller are in writing.

If there is any resistance on the part of the seller, either to fixing the damage or to putting details and agreements in writing, you need to talk to a lawyer for legal advice.

Likewise, if either party wishes to end the transaction in light of the damage done to the property, or if the seller refuses to repair the roof prior to possession, contact a lawyer for legal advice.

Want to share this by email or on social media? Link directly to the article: Who is responsible for property damage after the offer is accepted?


I just bought a house, and on possession day, I noticed the movable island from the kitchen, which I loved when I viewed the property, was gone. Was the seller allowed to take it with them?

The short answer is yes, the seller was allowed to take the movable island with them. A movable or detached island is an example of an unattached good—these are movable items that are not included in the sale of a property unless agreed to, in writing, by the parties.

Unattached goods include items such as wall art, area rugs, non-built-in appliances such as microwaves, and even curtains. Unless otherwise agreed to, sellers can take movable items from the property before the buyer takes possession.

The opposite of unattached goods are attached goods. Attached goods are items that you cannot remove from a property without causing damage to the property. For example, chandeliers, built-in appliances such as dishwashers, and curtain rods and brackets are attached goods. Unless otherwise agreed to, sellers are expected to leave attached goods behind.

However, the good news for buyers is, if there is something you like in a property you are considering buying, but it’s an unattached good, all is not lost. If you want a particular unattached good included in your purchase of the property, list it as an inclusion in your offer to purchase. Now, it’s subject to negotiation between you and the seller.

The seller may agree, or they may remove it from the list of inclusions in a counter offer. It is up to the buyer and seller, with the help of their real estate representatives, to negotiate the transaction, and that includes what items are included or not.

When it doubt, write it out. This is the best way to ensure you know what is included when you’re purchasing a property. For larger more expensive items, you may wish to include the make, model, and serial number. This may eliminate a seller’s urge to switch nice appliances, for example, with less expensive, used items.

Now, what do you do in the event the seller was supposed to leave something behind, but didn’t? If you don’t find out until after possession, you need to call your lawyer as it is now a legal issue between you and the seller. Your real estate professional can attempt to discuss the matter with the seller’s representative, but if things aren’t fixed to your satisfaction, your only recourse is to speak to your lawyer.

Want to share this by email or on social media? You can link directly to the article: How do I know what items come with the house I want to buy?


I’ve been working with an agent, but she’s going on holidays for 2 weeks. She’s going to arrange for someone else at her brokerage to take care of my listing while she’s gone. Do I have to sign a new contract with this person?

The short answer is no, but you may have to make changes to your existing contract depending on what type of brokerage you’re working with: common law or designated agency.

In a common law brokerage, your service agreement (contract) is with the brokerage, which means that essentially, you’re agreeing to work with any or all licensees at the brokerage. Because the agreement you signed is with the brokerage, any licensee from that brokerage can work with you under your existing agreement. The individual or individuals you have been working with are working with you on behalf of the brokerage.

In a designated agency brokerage, your service agreement is still with the brokerage, but only the individual (or individuals) named on the agreement are designated to work with you on behalf of the brokerage. If this is the case, and the individual your real estate agent wants you to work with for a couple of weeks isn’t specifically named on the agreement, the brokerage will have to designate, in writing, the other individual to work with you. You and the brokerage can amend your original agreement to include this new person as another designated agent for you.

Another option that is available when you’re working with a designated agency brokerage is that at the outset of your agreement, the brokerage designates more than one individual to work with you on behalf of the brokerage. This is completely acceptable, and will save you from having to amend the original agreement in the event the primary individual you’re working with becomes unavailable during the term of your agreement. When you’re signing your agreement, talk to your agent about their availability, vacation plans, and whether there are other agents within the brokerage that they sometimes partner with.

More than fifty percent of real estate professionals in Alberta are registered with a designated agency brokerage. Your agent should have explained whether their brokerage operates under common law or designated agency when you first started working together, and should have explained the differences.

Want to share this by email or on social media? You can link directly to the article: Can I work with different professionals from the same brokerage without signing a new contract?


I want to buy a new build home from the builder, but I don’t want to work with the builder’s representative. I want to work with my own agent, is that allowed? Will it cost me more money?

Yes, you’re allowed to work with your own agent. The builder’s representative is representing the builder’s interests, and your real estate professional will represent your interests in negotiations with the seller (builder).

RECA always recommends having your own representation when buying a property, whether it’s a new build, resale, a condo, or even a commercial or rural property. While builders can’t stop you from having your own representation, it is possible you’ll come across one that wants to deal with you, as the buyer, directly. If that’s the case, your real estate professional can offer you advice and guidance behind the scenes but they won’t be dealing directly with the builder or the builder’s representative.

When you hire a real estate professional to represent you, you’re required to enter into a written service agreement. The written service agreement sets out the roles and responsibilities of your real estate professional, and your obligations to that individual. It also sets out how your real estate professional will be paid.

Typically, buyer’s representatives are paid through a portion of the commission the seller pays. Some builders, however, do not offer commission to buyer’s agents. If this is the case, your real estate representative won’t be paid in the usual manner.

Your agreement may contain a clause that sets out if your real estate professional will not receive a portion of commission from the seller’s agent’s commission, you will owe compensation to your agent upon completion of your purchase. This compensation could end up being an out of pocket expense for you.

You may come across builders that have programs to pay commissions to real estate professionals who introduce a buyer to the builder, but this is not the same as having representation from a real estate professional throughout the process. In these cases, the builder is willing to pay commission to a real estate professional who introduces you – but then the builder expects to deal directly with you as the buyer, and you may not have the benefit of advice from your real estate professional.

RECA recommends carefully reviewing the fee portion of your written agreement before signing it.

If there is no mention of how your real estate representative will be paid in the event the seller or seller’s brokerage is not offering commission to a buyer’s representative, you need to talk about it with your real estate professional.  If you have concerns about a possible out of pocket expense in terms of compensation for your real state representative, get that out in the open at the beginning.

Want to share this by email or on social media? You can link directly to the article: Do I have to work with the builder’s real estate professional when buying a new build?


I made an offer on my dream home and stopped looking at other properties. My offer was not accepted, and I later learned the house was already conditionally sold at the time I made my offer. Doesn’t the seller have to tell me the house is conditionally sold before I make an offer?

No. Sellers do not have to disclose to buyers if their property is conditionally sold to another buyer.

Sellers are in the driver’s seat when it comes to disclosing the status of their property’s listing, and that includes whether they disclose when it is conditionally sold. If the seller instructs their agent not to disclose to buyers that their property is conditionally sold, the seller’s agent must follow those instructions.

Remember that conditionally sold is not the same thing as sold. If the conditional offer falls through, the seller has to begin the process of attracting potential buyers again. But, if they continue to market the home while it is conditionally sold, they increase their chances of having a backup offer from another buyer in the event the first buyers don’t waive their conditions.

I understand this was your dream home, you stopped looking at other properties once you made your offer, and it’s frustrating to not get the home, but your agent should have advised you of the possibility of the property being conditionally sold. In doing so, they could have also advised you of possible other courses of action.

While a seller isn’t required to disclose that their property is conditionally sold, your agent can always ask if it is. In that case, the seller has two options – they can instruct their agent to answer the question – and if doing so, they must answer it honestly and not lie. Or, they can instruct their agent to refuse to answer. If the seller’s agent refuses to answer the question, you can probably read between the lines. Choosing not to answer the question can be an answer in itself.

So, what do you do in the event you find a home you want to see, but you’re worried about it being conditionally sold?

If you love the home, go see it even if it is conditionally sold. This way, if the first conditional sale falls through, you’ll be prepared to make an offer right away. Or, even submit an offer as a backup so that it’s considered as soon as the first sale falls through.

Want to share this by email or on social media? You can link directly to the article: Do sellers have to disclose existing conditional sales when I make an offer?


I’ve recently started hearing reports about radon in Alberta homes. If I’m buying a home in Alberta, is it something I should be concerned about?

You’re right to be asking this question. A lot of people aren’t familiar with radon, but they should be.

Radon is an odourless, tasteless, colourless radioactive gas that is the by-product of uranium decay. Uranium occurs naturally in soil and rock formations, and places with higher than normal uranium deposits, such as Alberta and Saskatchewan, have higher radon levels.

Radon seeps through the earth and into basements, where it can become trapped because of the efficient way our homes are sealed from the outside elements.

Prolonged exposure to radon can lead to health problems, including lung cancer. In fact, after smoking, radon gas is the leading cause of lung cancer.

Download the radon fact sheet for more information.

Unfortunately, there’s not much that can be done during the offer and negotiation phase of a real estate transaction because reliable radon tests take 90 days to complete. That’s much longer than a typical offer to purchase timeline and time for condition removal.

However, some Alberta homeowners are having their homes tested for radon knowing what a serious health issue it is. If you find a home you’re interested in, ask the seller if they’ve had their home tested and ask for the test results. If the radon test showed high levels of radon (higher than 200 Becquerel), that’s considered a material latent defect that MUST be disclosed to prospective buyers unless a radon mitigation device is installed prior to listing.

The good news when it comes to radon is it’s a solvable problem. Even if you fall in love with a home that hasn’t had a radon test or the results are high, a radon mitigation device can be installed to vent radon gas outside the home from the basement. Mitigation costs vary, but are often not more than $2,000-$3,000. Hire a Certified Radon Technician to install the device to ensure it’s done properly.

If you buy a home that hasn’t had a radon test done, we encourage you to proceed with a radon test within 90 days of possession. This is health issue, and radon testing and mitigation is money well-spent. For more information about radon, go to Health Canada’s website and search “radon.”

Want to share this by email or on social media? You can link directly to the article: Should I be concerned about radon when buying a home in Alberta?


I just listed my home, and my real estate agent told me we had to hire someone to professionally measure my home. The measurement was done, and now my agent sent me the bill. What should I do?

The first thing you need to do is check your Seller Representation Agreement (listing agreement). That agreement outlines your responsibilities and the responsibilities of your real estate professional, including who is responsible for costs that may be arise during the listing. If the agreement you signed states the seller is responsible for additional costs, or it states the seller is responsible for paying third-party services, such as measurement companies or photographers, you’re going to have to pay that bill.

More and more residential real estate professionals are hiring professional measurement companies to measure their listings, but it’s not a requirement. There is a requirement to measure residential properties before listing them, but real estate professionals are allowed to do the measuring themselves.

If, for whatever reason, your real estate professional doesn’t want to do the measurement themselves, that’s fine. There are services out there that will do property measuring according to the required standards, but those professional measurement services come with a cost. Some real estate professionals may pass the cost on to their seller clients and set that out in the listing agreement, while others will see it as a business expense, for which they will eventually be compensated through the commissions they earn on the sale.

If your agreement doesn’t specifically indicate you, as the seller, will have to pay for or otherwise reimburse your real estate professional for third-party services, your real estate professional cannot require you to pay for such a service.

If your real estate professional continues to request payment or otherwise attempt to force you to pay, please discuss it with their broker.

Want to share this by email or on social media? You can link directly to the article: Who pays for the services that are needed in order to list my house?


My townhouse is listed for sale. There was a showing earlier today, and I found out those “buyers” just viewed my home to see it as a comparable for their own listing. Is that allowed?

The short answer is, no, it shouldn’t be.

When you list your property for sale, you expect that showings of your property are to potential buyers. Unless a buyer or the buyer’s representative discloses it to you beforehand, any other reason for a showing is dishonest through omission.

Real estate professionals have a requirement to be honest with their clients and with third-parties. That means that a buyer’s real estate professional has to be honest with you and your real estate professional.

It is reasonable for you to expect that buyers booking a viewing of your property are doing so with the potential for purchasing the property. If their reason is different, then it is reasonable for you to expect them, and their agent, to be upfront about it.

No one wants to have to keep their house in show-home-ready condition, and vacate the premises for a showing unless there is real potential the buyers are interested in buying. This may be particularly true if you have a young family and leaving at the spur of the moment for last-minute showings or showings at bedtime are particularly inconvenient.

There are also things you can do – and discuss with your agent – to lower the likelihood of showings for ulterior purposes. You can ask your agent to not allow viewings from people who don’t appear to be serious buyers. For example, this may mean your agent asks buyer’s agents to only bring buyers who are pre-approved for a mortgage.

As the seller, you control the process buyers must go through to view your property. If you want to set specific times during which viewings are allowed, you can. If you want to only admit buyers who are pre-approved, you can. Ensure your agent writes those instructions in the listing.

Remember, though, sometimes buyers come when you’re least expecting it – and any attempt to reduce showings or limit availability for showings may be detrimental to your listing.

Want to share this by email or on social media? You can link directly to the article: Can people book a viewing of my home to compare it to their own listing?


My elderly mother passed away at home. We are now selling her home, do we have to disclose that she died in the property?

Simply put, you are not required to disclose her death to potential buyers.

Sellers are required to disclose certain defects to potential buyers, but a death occurring in a home is not a defect.

When a death occurs in a home, the property may be considered a “stigmatized property.” A stigmatized property is one that has an unfavourable quality that may make it less attractive to some buyers. That quality, though, is unrelated to the physical condition or features of the property.

As a seller, you are not required to disclose stigma to potential buyers. Stigmas are different from material latent defects, such as un-remediated hidden flood damage or mould, which sellers are required to disclose.

Some stigmas include:

  • a suicide or death occurred in the property
  • the property was the scene of a major crime
  • the address of the property has the wrong numerals
  • reports that the property is haunted

Potential buyers’ different values, perceptions and backgrounds will affect the significance of a potential “stigma.” Some buyers won’t care about a death occurring in the property, while others may be completely put off by it.

Although you are not required to disclose stigma to potential buyers, because some buyers may have concerns about stigmas, those buyers can ask their real estate representative to ask your representative about possible stigmas. You don’t have to answer their questions, but if you choose to, you must do so honestly.

If you decide not to answer, a buyer has to decide if they are comfortable proceeding without an answer. Remember that not answering may turn the buyer off of your property more than simply responding honestly; it will depend on the specific buyer, their particular concerns, background, and perceptions.

Want to share this by email or on social media? You can link directly to the article: Do I have to disclose a death that occurred in the house when I sell?


I’m selling my house, and the listing agreement says I have to pay my real estate agent commissions if my place sells after the agreement ends. Is that legal?

It sounds like you’re referring to the “holdover” clause, which is found in most residential listing agreements (seller representation agreements) in Alberta. And yes, holdover clauses are legal.

A holdover clause permits your real estate brokerage to collect its fee or commission from you if you enter into a purchase contract with a buyer within a specific number of days after your listing agreement ends and that buyer was introduced to your property during the term of the listing agreement. The length of the holdover period is negotiable between you and your real estate professional.

When a real estate professional lists your home, your listing agreement sets out that you will pay your brokerage in the event your home sells.

Imagine you have a 90-day listing agreement. On day 88, your real estate professional arranged for a showing of your home to a buyer. The buyer liked it, but had to think about it for a few days. On day 91, the buyer decides they want to buy your home. That buyer only knew about your home being for sale because of the listing you had on it with your real estate professional.

Assume you didn’t extend your listing agreement, on day 91, your home is no longer officially for sale but you still want to sell. The buyer that viewed your home on day 88 writes on Offer to Purchase for your home, and you accept their offer.

Now the holdover clause kicks in.

Because you’re selling your home to a buyer who was introduced to it during the term of your listing agreement, the holdover clause requires you to pay your real estate brokerage the commission you agreed to in your listing agreement.

Your real estate professional did what they set out to do – they sold your home for a price with which you were happy. They deserve, and have every right, to be paid for their work.

The holdover clause also protects a real estate brokerage’s commission in the unlikely event a buyer and seller want to work together to get a deal done, but they wait until just after the listing agreement ends merely so they don’t have to pay commission. If in such a case the buyer was introduced to the seller’s property during the term of the listing, the real estate professional deserves to be compensated for their work. Side deals between a seller and that buyer shouldn’t affect the ability of the seller’s real estate brokerage to collect its commission.

Want to share this by email or on social media? You can link directly to the article: Is it legal for my real estate agent to collect commission on a sale after the agreement ends?


I want to buy a resale condominium, but I’m worried about rising fees and possible assessments. How can I ensure the condominium is a good one?

Condominiums can be a great housing option, and with some due diligence, you can find one that is well suited to your needs, and a financially sound purchase.

Condominium refers to a type of ownership that includes the individual ownership of a unit and shared ownership of common property with other unit owners. Condominiums can be apartment-style, townhouses, attached, or detached.

Condominium owners typically pay monthly condominium fees to cover their share of expenses for the common property, and some of this payment goes into the condominium corporation’s reserve fund.

The reserve fund is used to pay for major capital repairs and replacements. All condominium corporations must have a reserve fund. As a buyer, you want a condominium corporation that has a healthy reserve fund because it reduces the likelihood of a special assessment. Special assessments occur when a condominium corporation has major work to do and there isn’t enough money in the reserve fund. The corporation assesses an amount owing to the owner of each unit.

So how can you find out if the corporation you’re thinking of buying into is a healthy one? A good place to start is a condominium document review.

Condominium documents relate to the operation of the condominium corporation, which you want to ensure is financially stable and well managed. Condominium documents include but are not limited to:

  • current reserve fund study (5 years old or less) and 25-year reserve fund plan
  • current operating budget and fee schedule
  • current balance sheet
  • registered bylaws

When buying a condominium, you can hire a professional to review your condominium documents. They can provide you with a summary of the documents, and identify areas about which you might have concerns. Reviewing condominium documents can uncover financial difficulties, bylaws you find unacceptable (for example, restrictions as to size, number, or type of pet), upcoming necessary maintenance, or even discussion in Board meeting minutes about water issues.

Even a healthy reserve fund and a review of condominium documents can’t guarantee you won’t have a special assessment or that your fees won’t go up. In fact, you should expect your fees to go up a small amount each year, from factors such as inflation or rising utility costs. However, reviewing the condominium documents will give you a good idea of the health of your condominium, and if it’s the right one for you.

Want to share this by email or on social media? You can link directly to the article: How can I ensure the resale condo I want to buy is a good investment?


I’m on a condominium board, and we have decided to hire a professional management company. Do they need to be licensed?

This is one of the most common questions we get. The answer depends on what they are going to do on behalf of the Board of Directors, and how they will handle the condominium corporation’s money.

Condominium managers are responsible for collecting condominium fees, arranging property maintenance (according to instructions from the condominium’s Board of Directors), assisting the Board of Directors with enforcing the Bylaws, and other duties set out in the Bylaws.

The Real Estate Act does not specifically refer to condominium management, but it does say that individuals need a licence if they collect contributions, or money, for the control, management, or administration of real estate.

So, if a condominium manager is collecting condominium fees, or other such fees such as special assessments, do they need a licence?

If a condominium manager collects the money payable to the condominium corporation, deposits it directly into the condominium corporation’s account, and they are not carrying out any other activities that fall under the definition of trading in real estate, they do not require a licence.

If a condominium manager deposits the money payable to the condominium corporation into the management company’s account for any period of time, no matter how short, they do require a licence.

As a member of a condominium Board of Directors, you and your Board will have to think about how you want your management company to collect and hold fees. If the company will hold them in its own account, they require a licence.

Licensing requirements provide some protection for consumers when a third party, for example a management company, holds consumer funds. All licensees are required to have Errors and Omissions insurance, and there is a consumer compensation fund that compensates consumers who suffer a financial loss as a result of fraud, breach of trust, or a failure to disburse or account for money held in trust. The compensation fund is only available to consumers who are working with licensed professionals on trades in real estate or deals in mortgages.

In December 2014, the Government of Alberta passed legislation that will require licensing for all condominium managers; however, the government has not announced the date on which those legislative changes will come into effect. In the meantime, the licensing requirements detailed in this article continue.

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I hired a real estate professional to sell my home. The seller representation agreement (listing agreement) I signed is for four months. It’s only been two months, but I want to terminate the agreement, can I?

The short answer is yes, but it can be complicated.

The agreement you signed is a legal contract between you and a real estate brokerage to sell your home. It contains a start date and an end date, as well as provisions for ending the agreement early. If you and your real estate professional agree in writing to end the agreement before the end date, the agreement immediately ends.

If you change your mind about selling your home and your real estate professional agrees to end the agreement early, you may be responsible for reimbursing your real estate professional for reasonable expenses they incurred while your property was for sale. Those potential expenses need to be listed on the agreement when you sign it; your real estate professional can’t add them after the fact. These expenses may include, but aren’t limited to, reimbursement of advertising, measurement, or photography costs.

But, what happens when you want to end your agreement early and your real estate professional doesn’t agree?

If you want to end your agreement early because you want to work with a different real estate brokerage, there could be consequences. For example, if you begin working with another real estate brokerage, and your property sells, your first real estate brokerage could make a claim that commissions are payable to them since the brokerage didn’t agree to release you from the obligations of your agreement. You could find yourself owing commission to two brokerages.

Think carefully about why you want to end your agreement early. If it’s because you genuinely changed your mind about selling, perhaps your employment situation changed, be open and upfront with your real estate professional. You won’t be the first seller who has a change of heart or financial circumstances, but your real estate brokerage is under no requirement to release you from your agreement.

Another possibility is that your real estate professional may agree to a conditional termination of your agreement. Conditional terminations typically require the seller to agree in writing that they won’t re-list their property for sale with another real estate brokerage before the end of their original agreement.

If you want to end your agreement early because you and your real estate professional are not working well together or you have concerns about their performance, RECA encourages you to speak to their broker.

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I just spent $50,000 to finish my basement with high-end finishings. Now, I’m listing my house for sale, and my real estate representative says she can’t include the basement square footage in the total size. Why not?

You developed your basement and it’s beautiful. You’re sure any potential buyer would agree that it looks great, and is definitely livable space. But, your real estate professional is correct, the square footage of your basement cannot be included in the size of your home for listing purposes.

In Alberta, real estate professionals are required to follow the Residential Measurement Standard (RMS) when listing a residential property for sale. The RMS contains nine principles that enable real estate professionals, as well as buyers and sellers, to determine and compare the size of residential properties. The RMS sets out the specific parts of a residential property that can be included in its size for listing purposes.

Above grade levels are the levels of a residence that are entirely above grade. Below grade levels are the floor levels of a residence that are partly or fully below grade. If any portion of a level is below grade, the entire level is considered below grade. Below grade spaces include lower levels and basements. The RMS size of a property is, essentially, the sum of its above grade levels. Below grade levels are not included in the RMS area.

Without the RMS in place, there would be little consistency in how real estate professionals, and their sellers, measure and describe their property. Some may want to include their basement (unfinished or not), some may include an enclosed sunroom, while others may include the space created by a bow or bay window.

The RMS provides a consistent means of measuring, and describing, residential property size in Alberta.

Sellers, and their real estate representatives, are welcome to include additional measurement information in their listings, but the primary size listed in the listing must be the size according to the RMS.

Sellers need to remember that size isn’t the only factor that will affect a property’s list or selling price. Other factors include location, condition, quality of finishing, layout, and even type of ownership. You may not be able to include the square footage of your basement in the total square footage of your home, but the features of your home will set it apart from other properties. Size matters, but it’s not the only thing that matters.

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I heard that if someone calls themselves a “contractor,” they don’t need to have a licence to provide property management services. Is that true?

No, that’s not true. The truth is it doesn’t matter what a person calls themselves. If they are providing property management services and they are not the owner of the property or an employee of the owner, they require a licence from the Real Estate Council of Alberta (RECA).

The Real Estate Act, which RECA administers, defines property management as:

  • leasing, negotiating, approving or offering to lease, negotiate or approve a lease or rental of real estate;
  • collecting or offering or attempting to collect money payable for the use of real estate;
  • holding money received in connection with a lease or rental of real estate; and
  • advertising, negotiating or any other act, directly or indirectly for the purpose of furthering the activities described in items 1-3.

Licensed property managers can find suitable tenants, deal with nuisance tenants, draft lease agreements, and regularly inspect and maintain property on behalf of a property owner. It is up to property managers and the property owners to negotiate the specific tasks the property manager will provide, but ultimately, before providing property management services, the property manager needs a licence.

Property manager licensing provides vital protection for property owners. Individuals must complete comprehensive education before becoming licensed as a property manager, they must also provide a Certified Criminal Record Check to RECA prior to receiving a licence, and there are ongoing education requirements.

If a property owner is working with a licensed property manager, they have the added protection of the Consumer Compensation Fund. The Fund compensates consumers who suffer a financial loss as a result of fraud, breach of trust, or a failure to disburse or account for money held in trust by an industry member in connection with a real estate trade, mortgage deal, or property management services.

If you work with an unlicensed property manager, and the property manager disappears and takes rental payments or damage deposits with them, your only recourse is through the courts.

As a property owner, you’re not required to hire someone to manage your rental or investment property, but if you do, take steps to protect yourself. Ensure that the company and individual you hire are licensed to provide property management services in Alberta. You can check if someone is licensed through RECA’s website at www.www.reca.ca.

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I saw a house for sale, and I want to check it out—will I have to sign a contract to get a real estate professional to show me the house?

The short answer is no. If you see a house for sale and you simply want a real estate professional to show you that house, you’re not required to sign a contract.

Simply viewing a home with a real estate professional doesn’t trigger a regulatory requirement to sign a contract with that real estate professional. However, if you start sharing confidential information such as your motivation for buying or your financial qualification, the real estate professional has a responsibility to clarify your working relationship, at which point they are going to provide you with some documents to review.

In the process of clarifying your working relationship, the first document a real estate professional should present to you is the Consumer Relationships Guide. The Consumer Relationships Guide is a mandatory document for real estate professionals when they begin working with a buyer or seller of residential real estate. It explains the different types of working relationships between real estate professionals and consumers.

The Consumer Relationships Guide is not a contract. It does not commit you to a specific ongoing working relationship with your real estate professional, but it is an essential information piece for consumers to understand what working with a licensed real estate professional entails. Among other things, it discusses responsibilities and obligations.

The Consumer Relationships Guide contains an acknowledgement that consumers have to sign indicating they’ve read the Guide, understand it, and have been provided with an opportunity to ask the real estate professional questions about it. Consumers need to review and sign the Guide before entering into any contract with a real estate professional.

Some real estate professionals may actually present the Consumer Relationships Guide and request that you sign the acknowledgement even before showing you a single property, but that specific practice is not a requirement.

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I’m selling my home, and the potential buyers also want to use my real estate professional to represent them. Is that allowed?

Yes, that’s allowed. The situation you’re referring to is called transaction brokerage. Transaction brokerage is a service option when your real estate professional represents a buyer client interested in purchasing the property in which you are the seller client. The reverse is also true – transaction brokerage is a service option when you’re interested in buying a property and the property’s seller is also represented by your real estate professional.

When a real estate professional works on behalf of only one client in a transaction – the buyer or the seller – they have legal responsibilities, which include:

  • undivided loyalty to their client
  • acting in their client’s best interest at all times
  • the duty to avoid conflicts of interest
  • the duty to disclose conflicts of interest when they arrive.

Transaction brokerage changes the services your real estate professional is able to provide to you and to the other party in the transaction. A real estate professional who is working with both the buyer and the seller in a transaction cannot fulfill all of their legal responsibilities because there is a conflict between the best interests of the buyer and those of the seller. The buyer wants to pay as little as possible for the property, while the seller wants to sell their property for the highest possible price. It is impossible for a real estate professional to advocate for and represent the best interests of a buyer client AND seller client in the same transaction.

This is when and why transaction brokerage becomes an option. In transaction brokerage, the real estate professional will provide facilitation services to you and the other party. These services include:

  • helping the buyer and seller negotiate an agreement
  • giving the buyer and seller property statistics and information, including comparative information from listing services and local databases
  • providing and preparing agreements of purchase and sale, and other relevant documents according to the buyer and seller’s instructions

A transaction facilitator has to treat both parties in an even-handed, objective, and impartial manner. They must remain neutral, not advocate for either you or the buyer, and they cannot provide confidential advice.

Before a real estate professional proceeds with transaction brokerage, both the buyer and the seller need to provide their informed consent by signing an Agreement to Represent both Buyer and Seller. Informed consent means each client understands the facts, implications, and future consequences of providing their consent. You do not have to consent to transaction brokerage. If you don’t consent to it, or the other party doesn’t, there are other options available to you such as seeking representation from a different real estate professional.

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My real estate professional told me there is a standard rate of commission in Alberta, is that true?

It depends what they mean by “standard.” There is no legislative requirement or governing body that specifies the commission rate an authorized industry professional can or will charge.

The fact is, commission is something you can negotiate with your real estate professional. Some real estate professionals aren’t willing to negotiate their commission while others are. That’s their right. As a buyer or seller, you have the right to work with someone who charges a commission that you’re comfortable with.

Before choosing a real estate professional, you’ll likely want to compare the services and fees of a few real estate professionals. These interviews can help you understand the range of commission rates available, and the services provided at the various rates.

Typically, professionals calculate commissions by:

  • a percentage of the sale price
  • a flat fee or schedule of flat fees
  • a fee for service
  • a combination including any of these

Goods and Services Tax (GST) applies to real estate fees, as they are a “service.”

When you’re signing an agreement to work with a real estate professional, make sure you understand the commission arrangements. The service agreement you sign is a legal document and it’s binding. If you don’t understand something in it or you don’t agree with something, don’t sign. Seek legal advice or find a different real estate professional to work with.

While some businesses or companies may have specific commission structures, extensive changes within the Canadian real estate industry in recent years means there isn’t a standard commission rate.

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My real estate agent says they’ll buy my house if it doesn’t sell in 90 days. Should I be wary?

Wary might not be the best word, but you do need to make sure you understand the details of the offer. This type of offer is a guaranteed sales agreement, and while there is nothing illegal or wrong with a real estate company offering this kind of arrangement, it is rarely the best option for consumers.

In a guaranteed sales agreement, a real estate brokerage agrees to buy a piece of real estate from a seller at a previously agreed upon price, if it hasn’t sold to someone else before a certain date. Only real estate brokerages can offer these agreements, not individual real estate professionals.

If you’re selling your home to buy another one, you may be interested in a guaranteed sales agreement for the home you own now. It could help you avoid owning two homes and paying two mortgages. A guaranteed sales agreement might give you the confidence to proceed with your new home purchase before selling your current one.

What sellers need to keep in mind in these arrangements is that the real estate brokerage wants to minimize its risk.

For example, it’s rare that a guaranteed purchase price will be based on the property’s listing price or the property’s market value. In most cases, the brokerage calculates the guaranteed purchase price using a formula where legal fees, carrying cost, and commission on the resale are subtracted from the purchase price. This minimizes the brokerage’s risk, but it can also greatly reduce how much that seller receives for their home.

Brokerages that offer guaranteed sales programs are required to have policies for those programs. Those policies should include how the brokerage sets the guaranteed sales price and who is in control of the property’s listing price during the listing period; it may not be the seller. It’s not unusual for a guaranteed sales agreement to include a clause that requires a seller to lower their listing price during the term of the listing. Remember, your real estate brokerage wants to minimize its risk. It prefers to sell your property to a buyer rather than to use the guaranteed sales agreement, and lowering the listing price can sometimes help that happen.

If your real estate brokerage offers you a guaranteed sale agreement, it’s up to you to decide whether you’re interested. Before you do, make sure you read and understand all of the fine print.

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