Facebook
X
Pinterest
Copy Link
Are you thinking of Buying a Strata Property in BC? Purchasing a Condo or Townhome often means dealing with a Strata Corporation, which can seem a little daunting. Here are 15 critical questions you should consider to help you during your purchase.
1. What Are the Monthly Strata Fees?
Strata fees fund the general property upkeep, including landscaping, cleaning, and shared utilities. Ask:
- What services are included in the fees?
- Are these strata fees in line with other similar properties in the area? If they are higher find out why. E.G. some have Maintenance Staff which can save costs overall.
- Are there expected increases or additional charges coming soon?
2. What Services or Utilities Are Covered?
Some strata fees include heat, water, or cable, while others do not. Understand:
- Which utilities are covered?
- Are there additional user fees for amenities like gyms or pools?
- Review past operating budgets or ask for clarification during your purchase process.
3. Does the Building Have a Good Reputation?
Investigate the building’s history and reputation:
- Are units selling successfully in the resale market?
- Have there been recurring issues in strata meeting minutes? E.G. a high number of noise violations, constant unscheduled repairs and maintenance.
4. Who Controls Recreational Facilities & Are They Built Yet?
Determine if you’ll pay extra for amenities or if they are controlled by third parties. Ask:
- Are all facilities operational at the time of purchase, if not when will they be built?
- In new builds: Has the Developer paid for the equipment for use in the recreational facility – E.G. Gym Equipment and Sun Loungers can be a significant additional expense for a new Strata.
5. How Is the Property Managed?
Strata properties may be professionally managed or self-managed. Professional management provides more accountability. However, self-management may lead to challenges, especially with financial or legal matters. Check:
- Is the strata management company licensed under the Real Estate Council of BC?
- How disputes are resolved.
- Do the AGM Minutes reveal regular Financial shortfalls in the Budget? This can be a ‘red flag’ for further special levies.
6. How old is the Depreciation Report & what does it say?
The Depreciation Report is a key management tool for strata corporations. It is typically quite long but should not be overlooked!!
They are used to establish long-term (typically up to 30 years) planning for common property and common assets. Hence it is a very useful document for a Buyer.
Your Questions are:
- When was the last report completed? Ideally, it should be less than 3 years old.
- Does the Contingency Reserve fund balance align with the anticipated repair schedule? If not, this is a potential red flag as any shortfalls may result in increased Strata Fees or Special Levies in the future.
- Make sure that all major capital items are included in the report. E.G. Sometimes a Pool can be excluded which will be a large expense when major repairs or replacements are due.
RESOURCE: BC Government Depreciation Report Practical Tips Link
7. What Is the Contingency Reserve Fund (CRF) Balance?
The CRF pays for major repairs, like roofing or plumbing.
Effective November 1, 2023, strata corporations and sections are required to annually contribute a minimum of 10% of the annual operating fund to the CRF.
Request:
- Financial statements showing the CRF balance.
- Information on planned contributions and upcoming repairs.
RESOURCE: BC Government Guide to the Contingency Reserve Fund Link
8. Has There Been Recent Repair Work?
Understand what repairs have been done and what’s upcoming:
- Were repairs professionally assessed or recommended by engineers, if so check the Engineers Reports.
- Will you face additional levies to cover costs?
Note: If repair work has been recommended and is substantial, Owners will need to vote at either the AGM or at an SGM, and the amount payable will be in the Minutes or Meeting Notice. Make sure your Sales Contract covers who will pay – either you or the current owners.
9. Are There Any Legal Claims Involving the Strata?
Legal disputes can get expensive & involve future costs. Review meeting minutes and legal records to find:
- Ongoing claims and their nature.
- Expected costs or levies associated with legal proceedings.
10. Are Rentals Permitted?
Rental restrictions vary widely. Determine:
- The number of rental units allowed.
- Whether short-term rentals are restricted due to local bylaws or provincial regulations.
11. Is the Building Properly Insured?
Rising insurance costs in BC make this a critical question. Review:
- It is important to review what the insurance deductibles are for the building, to make sure you are covered under your own policy.
- Unit upgrades.: Typically upgrades not provided by the original bDeveloper need to be separately insured under the owner’s policy.
12. Are Pets Allowed?
Strata bylaws often limit pets. Confirm:
- How many pets are permitted and their size restrictions.
- Additional pet-related rules (e.g., leash requirements in common areas).
13. Have Special Assessments Been Agreed Upon?
Special assessments are fees for major repairs not covered by the CRF. Ask:
- If upcoming assessments are planned.
- The timeline and costs for owners.
14. Has the Building Envelope Been Renovated?
Building envelope repairs address structural issues like leaks. Since October 1, 2000, all contractors, in British Columbia, must be licenced as building envelope renovators with the Homeowner Protection Office. They must also provide applicable third-party home warranty insurance on applicable building envelope renovations.
Ask:
- Was the contractor licensed with BC’s Homeowner Protection Office?
- Is there warranty coverage for the renovation?
15. What About Parking Stalls and Storage Lockers?
Parking stalls and storage lockers in strata developments in BC come with varying ownership and usage rights. Understanding these complexities is crucial to avoiding disputes and ensuring clarity in your purchase.
Here’s a breakdown of how parking and storage are typically designated:
- Limited Common Property: Exclusively used by one unit.
- Common Property: Shared among owners.
- Developer Leases: Ensure sublease agreements are clear.
Property Designations: Strata Lot vs. Common Property
- Strata Lot: Ownership is private and tied to the unit’s title.
- Common Property (CP): Owned collectively by all strata lot owners, managed by the strata corporation.
Within common property, certain areas can be designated as Limited Common Property (LCP), providing exclusive use to specific owners.
Parking and Storage Arrangements
- Separate Strata Lot: Rare but possible. Parking stalls or lockers are distinct strata lots with unique strata lot numbers. Owners have full control, and these are explicitly listed on the strata plan.
- Part of a Strata Lot Unit: These are permanently attached to the unit, sharing the same strata lot number. Owners automatically have the right to use them as part of their purchase.
- Common Property Allocation: Strata councils control common property parking and storage. Owners may receive exclusive-use rights through:
- Short-term Exclusive Use Agreements: Typically granted for one year, renewable at the council’s discretion.
- Developer Leases: Developers may lease parking or storage areas to themselves or a related company, later subleasing to buyers. These leases are often unregistered, requiring careful investigation.
Limited Common Property (LCP)
- Designated exclusively for the use of specific strata lots, LCP remains legally owned by all owners in the strata corporation. Usage rights are defined on the strata plan, making this arrangement a balance between exclusivity and collective ownership.
4. Key Considerations When Reviewing Parking and Storage
- Review the Strata Plan: Check the official strata plan to confirm the designation (strata lot, CP, or LCP) and rights associated with parking stalls and storage lockers.
- Examine Strata Documents: Minutes, bylaws, and Form B (Information Certificate) can provide clarity on usage and disputes.
- Ask About Unregistered Leases: If the developer has leased common property parking or storage, ensure agreements are disclosed and understood.
Why This Is Important
When Buying a Strata Property, understanding the designation of parking stalls and storage lockers can significantly impact your rights and obligations as a strata owner. Misinterpretations can lead to disputes, unexpected fees, or loss of use if agreements are short-term or subject to strata council decisions.
Buying Strata Property in BC: Additional Documents to Request
To get a full picture of the property’s condition, when Buying a Strata Property request:
- Strata Plan : The registered strata plan including the Parking Plan.
- Meeting Minutes: Two years of meeting minutes, including AGM and SGMS. It’s also important to see the AGM & SGM Notices as this can provide key background information on items the Strata Voted on and Presidents Reports.
- Form B (Information Certificate) is prescribed by the Strata Property Act. It discloses key information about a strata lot and strata corporation, and should not be more than 30 days old.
- Financials: The latest Financials. These will include a Balance Sheet, Profit and loss account and how the Strata is currently performing against their budget.
Buying Strata Property in BC: Helpful Resources
- BC Housing: Comprehensive guide on strata living Link
- Homeowner Protection Office: Licensing and warranty info for building renovations Link
- Civil Resolution Tribunal: Resource for resolving strata disputes.
- Condominium Home Owners Association of BC (CHOA) Link
