Ch.7 STRATA PROPERTIES (CONDOMINIUMS) & COOPERATIVES IN BC

Strata Concept

allows for the subdivision of a building or land into separate parts for private ownership together with joint ownership of common property.

Unit Entitlement

-the number assigned to a strata lot that is used to determine the owner’s proportionate ownership in the common property and the strata expenses and liabilities for which the owner is responsible

- Firstly, it determines each owner’s proportionate, undivided ownership share as a tenant in common of the common property in the strata plan.

-Secondly, unit entitlement determines the share of the strata corporation’s expenses and liabilities for which each strata lot is responsible.

-Generally, residential strata lots calculate unit entitlement using the total “habitable area” of a strata lot.

-“Habitable area”: the area of a residential strata lot that can be lived in, but does not include patios, balconies, garages, parking stalls, or storage areas other than closet space

Strata lot’s contribution to an expense

(Unit Entitlement of Strata Lot / Total Unit Entitlement of Strata Lots) * Total Contribution

-Total Contribution: total cost of the repair or expense that is being allocated

-The Act allows for strata fees to be allocated in a manner other than unit entitlement by passing a resolution by a unanimous vote approving the new formula, and registering the resolution and formula. A licensee should review the General Index when ordering copies of strata plans from myLTSA.

-Before the Strata Property Act came into force on July 1, 2000, the previous strata legislation required every strata plan to have a Schedule of Interest on Destruction which determines, for example, the distribution of insurance proceeds for damage to the building if a fire destroys the strata complex and the owners decide to take the insurance money instead of rebuilding.

-Schedules of Interest on Destruction are not found in strata plans filed on or after July 1, 2000. Instead, the Strata Property Act provides for a “conversion schedule” (section 273) or “interest schedule” (section 278) that will be employed if a strata plan is cancelled and the strata corporation is dissolved or wound up.

Limited Common Property

-Several ways that a strata corporation can permit an owner to exclusively use common property:

1. designate the area as limited common property

2. the strata corporation may agree to permit an owner or tenant to exercise short term exclusive use (special privilage)

-limited common property: common property designated for the exclusive use of the owners of one or more strata lots

-The LCP designation attaches to a strata lot rather than the registered owner of the strata lot. In other words, the designation “runs with the land”

-A developer can designate common property as LCP on the strata plan when they deposit the strata plan at the land title office, or

-the owners can designate common property as LCP by either amending the strata plan or through a vote at an annual or special general meeting, or

-The owners can also designate common property as LCP without amending the strata plan. This requires a ¾ vote at an annual or special general meeting. (the Registrar records the resolution changing the designation from common property to LCP in the Common Property Record (formerly called the “Dealings Affecting Common Property” under the Condominium Act))

Short-Term Exclusive Use

-a special privilege granted to owners and tenants to exclusively use common property that is not designated limited common property

-If the permission or privilege involves a significant change in the use or appearance of common property or land that is a common asset, the owners must approve the permission or privilege by a ¾ vote at a general meeting

-If the permission or privilege does not involve such changes, the strata council may, by majority vote on behalf of the strata corporation, grant the privilege

Strata:

-must not grant the permission or privilege for more than one year.

-can also impose conditions on the permission or privilege

-can also cancel the permission or privilege at any time by giving the owner or tenant reasonable notice of the cancellation.

Parking Stalls and Storage Lockers

• The parking stall or storage locker is a separate strata lot on the strata plan. This is no longer allowed in residential strata plans. However, in some rare cases an older residential strata plan may have parking stalls or storage lockers designated as individual strata lots.

• may be part of an individual strata lot.

• may be designated as limited common property. This designation will either appear on the strata plan or on a resolution filed at the land title office.

• may be common property, with short term exclusive use privileges granted to an individual or corporation to allow them to make use of the space for a period of time, one of two arrangements will likely apply:

1. the strata corporation will have allocated the use of the space to an individual by way of contractual licence or lease; or

2. the strata corporation will have licensed or leased the space to the developer, who in turn will partially assign or sell their rights to individuals.

THE STRATA CORPORATION

a legal entity created by the deposit of a strata plan in the land title office. The corporation’s responsibilities are set out in the Strata Property Act and include the duty to manage, repair, maintain, and insure common property and common assets

-has the legal capacity of a natural person

-not the same as a company

-individual member’s liability is not limited like it is in a company

-Each owner is liable to pay their share of the judgment according to the Schedule of Unit Entitlement.

Sections

a legal entity, often described as a “mini strata corporation”, comprised of strata lots that share similar characteristics. Sections have their own executive and are created to represent the owners of specifically identified strata lots

-owners in one section may assume all costs in respect of matters that relate solely to the strata lots in that section.

-if a section is responsible for repair and maintenance of specific items, the owners in the section responsible can make decisions relating to those items without involving the owners in the other section(s).

The Strata Corporation’s Principal Duties

1. The Duty to Manage: to manage and maintain the common property and common assets
   -common assets: property (such as a lawn mower or gardening equipment) and/ or real property (one of the strata lots in the strata plan for use as a caretaker’s suite)

2. The Duty to Repair and Maintain

3. The Duty to Insure: to obtain and maintain full-replacement-value property insurance against harm to the common property and maintain insurance against liability to others for property damage and bodily injury.

4. The Duty to Enforce the Bylaws and Rules

5. The Duty to Keep Records: to prepare and keep various records, and to allow various persons access to those records.

• minutes of annual and special general meetings and council meetings, including the results of any vote;

• a list of council members;

• a list of owners, with their strata lot addresses, mailing addresses if different, strata lot numbers as shown on the strata plan, parking stall and storage locker numbers, if any, and unit entitlements;

• a list of names and addresses of mortgagees who have filed a Mortgagee’s Request for Notification under section 60 of the Act;

• a list of names of tenants;

• a list of assignments of voting or other rights by landlords to tenants under sections 147 and 148 of the Act;

books of account showing money received and spent and the reason for the receipt or expenditure; and

• any other records required by the regulations

Access to the Strata Corporation’s Records

• an owner;

• a tenant who has received an assignment of a landlord’s right to inspect and copy records under sections 147 or 148 of the Act; or

• a person authorized in writing by an owner or by a tenant who has been assigned the owner’s rights.

-Upon request by an authorized person, the strata corporation must make the records available for inspection and provide copies of them within two weeks, unless the request is for access to the bylaws and rules, in which case the corporation has only one week to comply.

Purchasers

-can ask the strata corporation to provide information in an Information Certificate (Form B) or in a Certificate of Payment (Form F). The purchaser usually obtains both certificates.

-can obtain access to the records set out in section 35(1) of the Strata Property Act via the contract of purchase and sale with the seller.

Information Certificate

-The strata corporation must attach copies of its rules, the current budget, the developer’s Rental Disclosure Statement, if any, and the most recent depreciation report, if any, to the Information Certificate.

-All of this information must be provided within 8 days of the request and at a charge of no more than $35, plus the cost of photocopying at up to 25 cents per page.

Certificate of Payment

-a document that informs a buyer of a strata lot whether there is any money owing to the strata corporation in respect of a strata lot

-must comply with the request for a Certificate of Payment within one week if the following conditions are met:

(a) The owner does not owe money to the strata corporation, or,

(b) If the owner does owe money, but

(i) they have paid any disputed funds into court or to the strata corporation in trust, or

(ii) the owner has otherwise made satisfactory payment arrangements with the corporation.

-The Certificate must certify that the owner meets these condition

-must not include any claims or damages against an owner that have not been determined by a court, by arbitration, or by the Civil Resolution Tribunal and the strata corporation must not charge more than $15 for a Certificate of Payment.

-Once issued, the Certificate is current for 60 days.

-The buyer’s lawyer or notary will order the Certificate of Payment shortly before the completion date

Contract of Purchase and Sale

-When drafting a purchaser’s offer, a licensee typically makes the offer subject to the seller obtaining the necessary strata documents for the buyer’s review

-Alternatively, the contract might simply contain the seller’s delegation of access rights to the buyer and the buyer agent’s brokerage.

What Licensees Should Check in the Strata Corporation’s Records

To the extent that any of the following minutes are available, they should span at least the preceding two years:

• strata council minutes;

• minutes from all annual, extraordinary or special general meetings;

• minutes of the executive and of any general meetings of any section to which the strata lot belongs;

• the budget and financial statements; and

• the bylaws and rules.