June 01, 2009

It’s Your Business - Vol 1, Issue 2 - June 2009

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New Condominium Property Act For New Brunswick | Aaron M. Savage

A new Act to modernize the New Brunswick condominium sector was introduced in the New Brunswick legislature on May 22, 2009. The new Act is intended to replace the current Act which is more than 40 years old. The new Act will strengthen consumer rights by making the purchase and sale processes more transparent by governing the approval, purchase and sale processes for condominiums. It will also provide the necessary tools for a corporation to successfully manage its condominium. The new Act will be proclaimed on January 1, 2010. Properties under development between now and the proclamation date will be grandfathered under the old rules, provided that a building permit has been issued.

The new Act will address:

  • the purchase and sale process – increase transparency and consumer protection;
  • the approval process – formalize the approval process, promoting consistency and compliance;
  • administration of the corporation – clarity around roles and responsibilities;
  • reserve funds – long-term maintenance plans and funding will be mandatory
  • phased developments – clarity around ownership and property taxation; and
  • other – provisions for new types of condominiums, inspections in the case of conversions, etc.

The Act will create a director of condominiums who will administer the Act. To offset the costs of the new framework, the Act will introduce fees for developers. The fees will range from $1,300 for a two-unit development, to a maximum of $20,500 for a development of 50 or more units. Existing corporations having more than 10 units must obtain a reserve-fund study (which is essentially a projection of their major expenses over a 10-year period). The Act will allow for at least five years to complete the transition. In the case of new development projects, a reserve-fund study will be mandatory for the approval process for corporations with more than 10 units. All corporations will be required to have a reserve-fund account to offset expenditures for significant maintenance and repairs. Finally, purchase and sale agreements for new units will be subject to a 10-day cooling-off period, and will require submission of the proper documents to all potential buyers.

Federal Government Tables Anti -Spamming Bill

On April 24, 2009, the Federal Government tabled Bill C-27, The Electronic Commerce Protection Act (the “Bill”). The Bill is primarily intended to deter spamming and related undesirable activities such as phishing, installation of spyware and identity theft. It prohibits the sending of “commercial electronic message(s)” unless the sender has obtained consent of the recipient. The definition of a “commercial electronic message” includes any email message that “encourages participation in a commercial activity”, and “commercial activity” is very broadly defined within the Bill.

Every message that goes out must identify the sender, include the sender’s contact information and an unsubscribe mechanism.

The Bill allows for consent to be obtained either expressly (which could require a telephone call to the intended recipient) or impliedly. Implied consent however is prescribed within the Bill as requiring either an “existing business relationship”, (which means the sender must have provided its product/service within eighteen (18) months prior to sending the message or have a contractual relationship that has not expired more than eighteen (18) months ago), or an “existing non-business relationship” (which applies to the volunteer sector but also includes the eighteen (18) month window). This 18-month window may be appropriate for many senders of commercial email messages to consumers, (the “B2C market”), however, not so much for the business to business market (“B2B”), such as professional advisors which may have long-standing relationships with clients that may include lulls in services for a couple of years or more.

Violations of the Bill can give rise to imposition of administrative monetary
penalties of up to $1M for individuals and $10M for corporations and persons other than individuals. There is also a private right of action provided under the Bill where a person can sue for non-compliance with the Bill (referred to within the Bill as a “contravention”). Directors and Officers may be personally liable for violations and contraventions if they found to have directed or assented to the activity causing the violation or contravention, however, a due diligence defence is available.

Finally, the Bill repeals the provisions of the Telecommunications Act which had set up the National Do-Not-Call list. In its place, there are restrictions preventing unsolicited telephone calls of a commercial nature unless the recipient has somehow opted-in to receive the call.

Since it has been tabled, the Bill has been subject to criticism due to its potentially broad application that would prohibit not only spamming but the delivery of a number of legitimate commercial email messages. A second reading of the Bill in the House of Commons occurred on May 8, 2009 and it has since been referred to Committee for review. Given the broad application of the Bill and the potentially serious consequences for non-compliance, it will be important for businesses to monitor the progress of this Bill.

This is a Cox & Palmer publication prepared by our Corporate & Commercial Group in Fredericton, NB. It is intended to provide information of a general nature only and not legal advice.  For assistance with any matter involving your business, call a member of our team:

Walter Vail Q.C. (506) 453-9602
Bruce Hatfield Q.C. (506) 453-9674
Matthew Tweedie (506) 462-4750
Deborah Power (506) 453-9645
Aaron Savage (506) 444-9284
Paul White (506) 453-9671

Cox & Palmer publications are intended to provide information of a general nature only and not legal advice. The information presented is current to the date of publication and may be subject to change following the publication date.