Strata document review can be time-consuming. Reviewing these documents carefully should be top of mind. Not reviewing the strata documents properly can result in future issues that affect your financial comfort, lifestyle and daily happiness.
Who can request to receive strata documents?
An owner, or person authorized in writing by a strata lot owner, may request access to the records. Owner’s have the right to receive information from the strata corporation including:
- meeting minutes
- the strata corporation’s bylaws and rules
- financial statements
- information related to repairs and maintenance
- etc.
Form B: Information Certificate
The Form B is specific to the particular unit that the documents were requested for. It will become outdated if a meeting has taken place within 30 days of the form being provided. Here is some information provided within a Form B:
- monthly strata fee amount
- contingency reserve amounts (time sensitive)
- amounts owing to strata
- special levy agreements
- alteration agreements made between the strata and unit owner
- parking stall information
- storage locker details
- bylaw and 3/4 vote amendments not yet filed or passed
- summary of strata corporation’s insurance coverage
- approved budget
- etc
Bylaws and Rules
All strata corporations must have bylaws and may have rules. Bylaws and rules apply to owners, tenants and visitors. A bylaw governs the use of strata lots by the strata council. The purpose of bylaws is to control, manage, maintain the use and enjoyment of the strata lots, common property and common assets of the strata corporation.
Rules govern use, safety and condition of the common property and common assets. Rules cannot govern the use of strata lots. A strata council issues non-complying owner’s warnings and fines for bylaw and rule breaking. It is especially important to review strata bylaws if you have kids, pets or wish to rent out your unit, as there may be restrictions in place.
Financial Statements
Before every annual general meeting; the strata council, and strata manager, must prepare a financial statement for the fiscal year that is just ending to distribute with the notice of the AGM. Strata lot owners approve the annual budget and their strata fees, by majority vote at the annual general meeting. The financial statement must start from the beginning of the fiscal year and cover a period not less than up to two months before the AGM. Within eight weeks after the strata corporation’s fiscal year end, the strata corporation must prepare a financial statement updated to the end of the fiscal year.
The financial statement must contain the following information:
- the opening and current balance in the operating fund
- the opening and current balance in the contingency reserve fund
- the details of the strata corporation’s income from all sources, except special levies. It is important to include income from such things as interest, fines, user fees for things like parking, electric vehicle charging, guest suite rentals, and revenue from different activities such as leasing space for cell phone towers.
- the details of expenditures from the operating fund, including any unapproved expenditures
- the details of expenditures from the contingency reserve fund, including any unapproved expenditures
- income and expenditures by special levy, if any
Depreciation Report
Under British Columbia’s Strata Property Act and regulations, strata corporations with five or more strata lots must obtain depreciation reports. The depreciation reports must be obtained every 3 years or deferred by a 3/4 vote. The report outlines a strata corporation’s assets and common property and highlights projected maintenance and replacement costs. It will also provide multiple funding models based on the information that has been obtained about the contingency reserve fund. Reviewing this document will allow you to have a deeper understanding of the condition of the property you are buying and more in-depth knowledge of what to expect in the future that could affect the budget.
Insurance Summary
All strata corporations are required by the Strata Property Act to have property and liability insurance. The strata corporation’s property insurance is for the common property, common assets, buildings shown on the strata plan. It also insures fixtures built or installed on a strata lot if built or installed by the owner developer as part of the original construction of the strata lot. Bareland strata developments, as well as individual homes and townhomes, are not shown on the strata plan and typically won’t be covered by the strata corporation’s insurance unless specified.
Property insurance must be for full replacement value and insure against:
- fire
- lightning
- smoke
- windstorm
- hail
- explosion
- water escape
- strikes
- riots or civil commotion
- impact by aircraft and vehicles
- vandalism and malicious acts.
Establishing full replacement value requires a current appraisal. Liability insurance must be for a minimum of $2 million or higher.
Strata Meeting Minutes
The strata council is typically made up of a group of volunteer residents (elected annually) and a strata manager, hired to manage the building/complex. The strata minutes are taken during every strata meeting and outline ongoing projects, issues and resident concerns. By reading these minutes, you will become familiar with how the council operates and deals with issues, as well as gage how proactive the council is. It is common for a real estate contract and the agent to request the last 2 years of minutes when requesting the strata documents.
Annual General Meeting Minutes
An Annual General Meeting, also known as an AGM, is held once a year. It takes place in order to update the strata owners on the progress over the past year, finances, and insurance; as well as an opportunity to set the upcoming years budget and increase strata fees accordingly (if needed). There may be discussions of bylaw/rule changes and potential special levies in the near future.
Special General Meeting Minutes
Special General Meetings only take place if there is an emergency issue to deal with that may result in a special levy to cover the costs of the issue. The council typically determines a resolution during the meeting.
Strata Plan
The strata plan is a legal document that is submitted by the developer/builder before it was built. It outlines all the planned dimensions of each unit, common areas, and what parking is allocated to each unit. The strata plan will be located within the strata documents.
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Speaking to a professional about the strata documents is essential. Please always verify the accuracy of this information through your own due diligence. Nicole McWilliams will assume no responsibility or liability for the accuracy of the information within.
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