Monday, January 28, 2013

Deficiencies in Common Property, Technical Audits and New Home Warranty Insurance

I always enjoy hearing Michael Ball, P.Eng. from Morrision Hershfield speak.  On January 22, 2013 Mr. Ball presented on the topic of "Technical Audits" at the CCI-SAC luncheon.

This topic has become more timely as a consequence of the changes being proposed by the Alberta Government to require all developers and builders of condominium projects to obtain insurance through a New Home Warranty Programs.  Mr. Ball made it abundantly clear to those present that failure to conduct a timely technical audit leads to it being a strong possibility that condominium corporations will be outside of the tight timelines imposed by the New Home Warranty Programs (1 year for all but structural issues and 5 years for structural issues) to make a claim on this insurance.  The proposed changes by the Alberta Government may also extend these timelines but in no way will these changes diminish the importance of a condominium corporation vigourously assessing the state of the common property. This is what a technical audit does.

Property Managers should be mindful of the possibility that failure to recommend in writing to Boards of Directors of condominium corporations to conduct a technical audit may lead to owners and others affected alleging that the Property Manager was negligent in not so advising.  More significantly, Boards of Directors should also understand the seriousness of the deadlines imposed by the New Home Warranty Programs and understand that the failure to conduct a technical audit could very well leave a condominium corporation on the wrong side of the deadline and leave Board Members exposed to similar allegations.