Here’s What You Need To Know If You Are Considering Buying A Unit In A Strata Building
Strata housing is a collection of privately owned units within a larger complex. Condos, townhouses, and duplexes are often owned in this way. Strata housing is popular in BC as one third of BC residents live in a strata home. They are usually more affordable than their single family counterparts.
The parts created for individual ownership are called “strata lots”, and as an owner, you own your individual strata lot. So as a purchaser, you should review and understand the various strata documents.
The important documents you should review are:
The bylaws and rules Most stratas will use standard bylaws that can be found online. Depending on the property, some stratas will have addendums to the standard bylaws, and it is important for you to be informed. Pay particular attention to the restrictions contained in the bylaws, such as rental restrictions, or the pet policy for instance. You should also be aware of any future obligation and liability.
Rules in a strata are in place to govern the use, safety and condition of the common property and assets.
The regular meeting minutes It is prudent to review all the recent meeting minutes including those of the AGM (Annual General Meeting) and SGM (Special General Meeting). The minutes are designed to be a record of the resolutions at the meeting.
By reading at least 2 years of meeting minutes, you will get an idea of how well the strata is run, records of complaints, repairs and maintenance and will also give you an insight into any major issues that have surfaced in the recent past.
The AGM Minutes The strata AGM is an important meeting that has a more active participation of the strata owners. It covers the past year’s business and sets out the plan for the ensuing years with respect to improvements and budgets.
SGM Minutes SGMs are called when there is an emergency or unexpected event that affected the whole strata. These minutes are important to view as they could discuss a significant or pending issue within the strata.
Financial reports Financial reports will give you the purchaser an idea of how financially strong the strata is. You will learn how much is in the contingency reserve fund, and this is crucial especially if there is a large capital expenditure looming.
Financial reports should be easily available, and all revenue inflows and outflows should be well documented and transparent. Be aware of any special levies that may be enforced to cover a costly future repair.
Depreciation report Not all stratas have these reports, but they are equally as important as the other reports. A depreciation report outlines the condition of the buildings and what repairs and maintenance will be required in the coming years, and how the reserve fund will cover them. If there are not enough funds in the contingency reserve, then special levies may be required in the future.
Form B This form clearly lays out the details of what you are getting in your strata unit. It depicts all the fees, the restrictions and some important financial details such as the health of the contingency reserve fund and any special levies.
We have several excellent rental properties available at Virani Rent+ Manage. Visit our website or, contact us to book a tour.