A-C | D-G | H-N | O-Z

D

Default
Failure to abide by the terms of an agreement such as a mortgage agreement. If the default is under a mortgage agreement, then the failure to make mortgage payments (defaulting on the loan) may cause the mortgage lender to take legal action to possess (foreclose) the mortgaged property. If the default is under the purchase agreement, then the other party may be able to terminate the agreement or seek damages for the breach, or both.

Defects
Items that have been installed and completed but require additional work to meet the quality standard. These are normally superficial defects involving fit, finish or appearance.

Deficiencies
Items in the Purchase Agreement that have not been completed at the time of occupancy
inspection. Exterior Seasonal Deficiencies are the most common type, where weather and climate factors make it impractical to complete the work until conditions are more favourable.

Deficiency Holdback
At the time of possession, elements of the common property or of a specific unit may not be complete. In the case of a residential unit, the Purchaser may wish to hold back funds equal to the value of the incomplete work until such time as the work is completed. The holdback may represent the value of several incomplete items. As each item is completed, the holdback amount for that item is released to the Developer from the trust account of the Developer’s
lawyer. In the case of incomplete common property work, the unit Purchaser may wish to hold back an amount equal to the unit’s share of the value of the incomplete common property work. There is no automatic right to make a holdback. In principle, the right should be negotiated and included in the Purchase Agreement before it is signed. If the Purchaser has the right to make a holdback, the amount must be negotiated at the time of Closing and in relation to agreed–upon dollar values for the incomplete work. Such a negotiated agreement must include provisions governing the release of the holdback funds to the Developer.

Deposit
A sum of money provided by the Purchaser as a means of binding a Purchase Agreement. The funds are held in trust until they can be released to the Developer unless there is an approved plan such as The Alberta New Home Warranty Program in place to protect and replace deposit funds released to the Developer.

Deposit Protection
(under an Approved Plan)
As a government approved plan, The Alberta New Home Warranty Program protects your deposits in the purchase of a condominium home up to a total of $30,000 or 15% of the purchase price, whichever is less.

Development Permit
The municipality in which a condominium is to be built will issue a Development Permit for the project. The permit approves the project in so far as the use of the land, the unit density of the project and the concept are concerned. A Development Permit does not permit construction to begin. That requires detailed building plans to be submitted to the municipality for approval and the issuance of a Building Permit.

Discharge of Mortgage
A document signed by the lender and given to the borrower when a mortgage loan has been repaid in full. Such discharge must be registered at the Land Titles Office to be effective.

Disclosure Documents
Developers of new condominiums are required by law to provide prospective Purchasers with
numerous specified documents that serve to disclose the implications of unit ownership in the
condominium. Such documents must disclose, among other things, the anticipated amount of Condominium Fees required from each unit.

Down Payment
The portion of a home’s price that the Purchaser must pay up front from personal resources before securing a mortgage. It typically ranges from 5% to 25% of the purchase price. If there is no need for a mortgage, the down payment can be 100% of the purchase price.

E

Easement
A right acquired for the use of or access to another person’s land for a specific purpose such as
for a driveway or to install, maintain, repair or replace utility services. To be binding, the
easement must be registered on the Title to the unit and its terms should be read carefully to
understand what rights have been given.

Encroachment
An improvement to a property — like a fence, carport, garage or deck — that intrudes onto another property — whether it is a neighbour’s property, a street or lane — contrary to any
municipal bylaws or the terms of any easement registered on Title to the lands.

Encumbrance
A claim for a debt, such as a mortgage, that is made against a property. An encumbrance must be registered on the Title for the property through the Land Titles Office.

Equity
The difference between the value of a home and the total debts registered against it. Equity
typically increases as the outstanding principal of the mortgage is reduced through regular payments. Rising prices in the marketplace as well as improvements made to the property work to increase equity as well.

Estoppel Certificate
Typically required when purchasing a condominium home. The Condominium Corporation issues this certificate to indicate the status of a particular unit’s Condo Fee account. If the Corporation certifies that there are no arrears, this “clear certificate” means that the Corporation cannot subsequently claim otherwise and demand payment for condominium fee arrears from the unit’s new owner. The Estoppel Certificate also verifies that insurance coverage is in place for the common property as well as for the Reserve Fund.100

Exclusive Use Common Property
Common Property areas such as a patio, balcony, parking space or storage room that are designated for the exclusive use of a particular unit. Such Exclusive Use Common Property, while owned by all the unit owners, is reserved for the designated unit owner. Reference must be made to the bylaws for details as to what use can be made of the area and the rules relating to the maintenance of such areas.

Exterior Elevations
Detailed, scaled, dimensional drawings of the roof and exterior walls of a home as seen from the front, sides and rear. These elevations also show the location and types of specific exterior finishing materials to be used.

Extraordinary General Meeting
Any properly convened meeting of a condominium’s unit owners, other than an Annual General Meeting. Such a meeting can be called by the Board of Directors whenever it sees fit or it can be
requisitioned by a certain proportion of unit owners per the bylaws of the Condominium Corporation. Typically, an EGM is called to deal with matters that require urgent attention.

F

Finish Schedule (Exterior/Interior)
A detailed and specific listing of materials, colours, styles and models of finishing materials selected by the Purchaser, usually from standard choices offered by the Developer. Finish schedules are a part of the contract for the purchase of your condominium home.

First Year Material & Workmanship Protection
Protection provided by the Alberta New Home Warranty Program for up to $60,000 per
condominium unit and up to $1,500,000 per condominium development registered with the Program to cover material replacement and workmanship costs in the first year.

Foreclosure
A legal procedure in which a mortgage lender obtains ownership of a property or causes it to be sold if the borrower defaults on the mortgage loan.

G

Gross Debt Service Ratio
The percentage of a mortgage borrower’s total monthly income that is used for mortgage principal
and interest payments and to pay property and school taxes, heating costs and half the amount of condominium fees required for maintenance and upkeep.

GST and GST Rebates
The purchase price of a new condominium home is subject to the 7% federal Goods & Services Tax (GST). However, if the home will be your principal residence or the principal residence of a family member, then there is a partial rebate of the GST. In some circumstances, there may also be a rebate even if the purchase is intended to be a rental property. The GST rebate is customarily credited to you at the time of Closing. The amount of GST rebate is variable, depending on the price of the home. If the purchase price is up to $350,000, then the rebate is equal to 36% of the tax. If the purchase price is more than $350,000 but less than $450,000, then the rebate is proportionally reduced. For example, if the purchase price is $400,000, the GST rebate is half of 36%. If the purchase price is $425,000, the eligible rebate is one quarter of the full 36% rebate. There is no GST rebate if the purchase price is over $450,000.