Key Points:

1. Background:

   • A fire in March 2023 destroyed parts of the Castledowns Pointe condominium building, rendering it uninhabitable.
   • Structural deficiencies, predating the fire, were discovered during inspections. Repairs were estimated to cost over $7 million.
   • The City of Edmonton ordered evacuation in September 2023, and the building remains unoccupied.

2. Condominium Corporation’s Actions:

   • The Board proposed selling the entire property as-is due to the high repair costs.
   • Despite failing to achieve the required 75% owner approval for termination, the Board sought court orders to terminate the condominium status and sell the property.
   • The Court permitted listing and subsequent extensions for sale closing dates (now January 31, 2025).

3. Court Decision:

   • Under Section 61(3) of Alberta’s Condominium Property Act, the Court granted the Condominium Corporation authority to:
     • Use insurance proceeds and reserve funds to pay debts and ongoing property expenses.
     • Hold back insurance proceeds for future claims, carrying costs, and litigation expenses.
   • The Court emphasized that these measures were necessary to prevent further financial and property deterioration, benefiting all stakeholders, including mortgagees.

4. Opposition by Mortgagees:

   • Some mortgage lenders argued against the use of insurance proceeds to cover expenses, claiming their interests were compromised.
   • The Court rejected these arguments, ruling that protecting the property and covering liabilities was in line with the Act’s intent.

5. Financial Status:

   • The Corporation owes approximately $955,000, primarily to service providers and legal counsel.
   • The reserve fund has dwindled, and over half of the unit owners are in arrears on contributions.

6. Insurance Proceeds:

   • $2.9 million of insurance proceeds are held in trust.
   • The Court permitted their use for essential expenses and directed the Corporation to maintain sufficient reserves for potential claims.
   • No monetary award specified.