NLR 80/11 - Condominium Regulations, 2011 under the Condominium Act, 2009

NEWFOUNDLAND AND LABRADOR REGULATION 80/11 Condominium Regulations, 2011 under the Condominium Act, 2009 (O.C. 2011-233) Amended by: 24/22 NEWFOUNDLAND AND LABRADOR REGULATION 80/11 Condominium Regulations, 2011 under the Condominium Act, 2009 (O.C. 2011-233) (Filed September 13, 2011) Under the authority of section 88 of the Condominium Act, 2009 the Lieutenant-Governor in Council makes the following regulations. Dated at St. John’s , August 18, 2011. Robert Thompson Clerk of the Executive Council REGULATIONS Analysis 1. Short title 2. Definition 3. Persons who may prepare reserve fund study 4. Contents of a reserve fund study 5. Method of conducting a reserve fund study 6. Copy of study to owners 7. Liability insurance 8. Conflict of interest 9. CNLR 955/96 Rep. 10. Commencement Short title 1. These regulations may be cited as the Condominium Regulations, 2011 . 80/11 s1 Back to Top Definition 2. In these regulations, "component" means an individual item that is included in the physical analysis portion of a reserve-fund study as described in section 4 , and shall include an item (a) that is the responsibility of the corporation, (b) for which major repair or replacement costs are anticipated to be incurred during its useful life; and (c) for which the costs of repair or replacement will not be covered as part of the annual operating or maintenance budget. 80/11 s2 Back to Top Persons who may prepare reserve fund study 3. The following classes of persons may prepare a reserve-fund study (a) a member of the Appraisal Institute of Canada holding the designation of Accredited Appraiser Canadian Institute; (b) a person licensed under the Architects Act, 2008 ; (c) an engineer registered to practice engineering under the Engineers and Geoscientists Act, 2008 ; (d) a member of the Real Estate Institute of Canada holding the designation of Certified Reserve Planner; and (e) a member of the Canadian Institute of Quantity Surveyors holding the designation of Professional Quantity Surveyor. 80/11 s3 ; 24/22 s1 Back to Top Contents of a reserve fund study 4. (1) A reserve fund study shall consist of (a) a physical analysis; (b) a financial analysis; and (c) a reserve fund status certificate. (2) The physical analysis required under paragraph (1)(a) shall consist of (a) the component inventory of the corporation; and (b) an assessment of each component that states the following: (i) its actual or estimated year of acquisition, (ii) its present or estimated age, (iii) its normal life expectancy, (iv) its remaining life expectancy, (v) the estimated year for its major repair or replacement, (vi) its estimated cost of major repair or replacement as of the date of the study, and (vii) the percentage of that cost of major repair or replacement to be covered by the reserve fund and the adjusted cost resulting from the application of that percentage. (3) A component that is scheduled for major repair or replacement in the year of the reserve fund study is considered to have no remaining life expectancy. (4) In preparing the component inventory of the corporation for the purpose of paragraph (2)(a), the person conducting the reserve fund study shall review (a) the declaration and description; and (b) the current by-laws or proposed by-laws of the corporation establishing what constitutes a standard unit. (5) The financial analysis required under paragraph (1)(b) shall consist of the following: (a) a description of the financial status of the reserve fund as of the date of the reserve fund study; and (b) a recommended funding plan projected over a period of at least 30 consecutive years, beginning with the current fiscal year of the corporation, that shows the minimum balance of the reserve fund during the period and, for each projected year, (i) the estimated cost of major repair or replacement of the common elements and assets of the corporation based on current costs for the year in which the study is conducted, (ii) the estimated cost of major repair or replacement of the common elements and assets of the corporation at the estimated time of the repair or replacement based on an assumed annual inflation rate, (iii) the annual inflation rate described in subparagraph (ii), (iv) the estimated opening balance of the reserve fund, (v) the recommended amount of contributions to the reserve fund, determined on a cash flow basis, that are required to adequately offset the expected cost in the year of the expected major repair or replacement of each item in the component inventory, (vi) the estimated interest that will be earned on the reserve fund based on an assumed annual interest rate, (vii) the annual interest rate described in subparagraph (vi), (viii) the total of the amounts described in subparagraph (v) and (vi), (ix) the increase, expressed as a percentage, in the recommended amount of contributions to the reserve fund over the recommended amount of contributions for the immediately preceding year, and (x) the estimated closing balance of the reserve fund. (6) In preparing the financial analysis described in subsection (5), the person conducting the reserve fund study shall review, (a) the most recent audited financial statements of the corporation or, in the case of a corporation that has as one of its objects the management of a property consisting of less than 10 units, the most recent financial statements of the corporation; and (b) the most recent reserve fund study of the corporation. (7) A reserve-fund status certificate required pursuant to paragraph(1)(c) shall be completed by the person preparing the reserve-fund study at the time the study is completed and shall provide (a) the balance in the reserve-fund at the beginning of the current year; (b) the annual contribution to the reserve-fund recommended to be made during the current and subsequent fiscal years of the study period; (c) a statement summarizing the repair, maintenance and replacement recommendations in the study; (d) the date when a new reserve fund study is required to be completed under subsection 49(5) of the Act; and (e) the opinion of the person preparing the study that the fund should be adequate to offset the expenditures for the major repair or replacement of the components if the corporation makes contributions as recommended in the study. (8) The person conducting the reserve fund study shall sign it. 80/11 s4 Back to Top Method of conducting a reserve fund study 5. (1) A reserve fund study shall be based on, (a) a visual site inspection of the property, including a visual inspection of each component where practicable; (b) all other inspections of each component that the person conducting the study considers appropriate or necessary; (c) a verification of records of the corporation; and (d) interviews with those of the corporation’s directors, officers, employees and agents that the person conducting the study considers appropriate. (2) As part of preparing the assessment of each component described in paragraph 4 (2)(b), the person conducting the reserve fund study shall review the following documents: (a) all existing warranties, guarantees and service contracts for each component; (b) the as-built architectural, structural, engineering, mechanical, electrical and plumbing plans for the property that are in the custody of or under the control of the corporation; (c) the as-built specifications for the buildings that are in the custody of or under the control of the corporation; (d) the plans for underground site services, site grading, drainage and landscaping, and television, radio or other communications services for the property that are in the custody of or under the control of the corporation; (e) the repair and maintenance records and schedules in the custody of or under the control of the corporation; and (f) all other records of the corporation that the person conducting the study requires in order to prepare the assessment. (3) In addition to the material that a reserve fund study is required to contain, the study may contain all further information and analysis that the person conducting the study or the board considers appropriate or necessary. 80/11 s5 Back to Top Copy of study to owners 6. The corporation shall provide a copy of the reserve fund study to each of the unit owners in the property, as soon as the study is completed. 80/11 s6 Back to Top Liability insurance 7. A person conducting a reserve fund study shall carry professional liability insurance and shall, when requested by the corporation, submit proof of that insurance. 80/11 s7 Back to Top Conflict of interest 8. A person shall not, without the written consent of the owners of all of the units in the property, prepare a reserve fund study for a corporation if that person (a) is the declarant or a unit owner, director, officer, employee or manager of the corporation; (b) is a partner, employer or employee, spouse, son or daughter of the declarant, or of a unit owner, director, officer, employee or manager of the corporation; (c) has an interest in a contract or proposed contract to which the corporation is a party; or (d) is a person who lives on the property managed by the corporation. 80/11 s8 Back to Top CNLR 955/96 Rep. 9. The Condominium Regulations , Consolidated Newfoundland and Labrador Regulation 955/96, are repealed. 80/11 s9 Back to Top Commencement 10. These regulations come into force on the date that the Act is proclaimed. (In force Dec. 1/11) 80/11 s10