Owning a Condominium (Script 401)
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This script explains several details about owning a condominium (or condo). For information on buying a condo, check script 407, called “Buying a Condominium”.
- 1 What is a condominium?
- 2 Common property and limited common property (LCP)
- 3 How a strata plan is created
- 4 Subdividing land instead of a building
- 5 What is a strata corporation and what does it do?
- 6 What is a strata council and what does it do?
- 7 Who is an owner?
- 8 Strata fees and special levies
- 9 Insurance
- 10 What law applies to condominiums?
- 11 Renting out a condominium
- 12 Can strata corporations require strata owners to pay for certain repairs?
- 13 Resolving disputes
- 14 More information
What is a condominium?
A condominium, or condo, is a strata lot in a strata development. A strata development is a building (or sometimes land) divided into separate parts, called strata lots. This allows for individual ownership of the strata lot. And all strata lot owners together own the common property in a development. Depending on the development, a strata lot may be a one-bedroom apartment, a townhouse, a retail store, a medical office, and so on. In a typical high-rise strata building, each unit is a separate strata lot. In this example, the strata scheme allows people or businesses to own their unit.
The words strata and condominium mean the same thing in British Columbia.
It’s not the size or shape of a development that makes it a condominium project. Instead, it’s the legal nature of it. If the development is legally created by a strata plan, it’s a condo project—whether it’s a 300-unit high-rise apartment, a 50-lot bare land strata recreational development, or a 2-unit strata duplex.
Common property and limited common property (LCP)
Any property in the development that is not part of a strata lot is common property. In a condominium building, typical common property includes hallways, elevators, gardens, recreational amenities, garbage facilities, building security features, and the roof and exterior walls. In addition, some pipes, wires, cables and similar things that carry water and other services within the development may also be common property—even when they’re located in a strata lot. The strata corporation may make bylaws and rules to govern the use, safety and condition of the common property and common assets.
Strata lot owners automatically own a proportionate interest in the common property, together with all the other strata lot owners in the development. Under the Strata Property Act, strata lot owners own the common property in a type of co-ownership called tenancy in common. Each owner’s proportionate interest in the common property is set out in a table called the Schedule of Unit Entitlement (also called a Form V). Every owner can use the common property; they have to follow the bylaws and rules of the strata development. For example, an owner may not use the common property or common assets in a way that causes a hazard to another person or is illegal.
Sometimes, common property may be set aside for the use of only certain people. The Strata Property Act allows a strata development to designate an area of common property for the exclusive use of one or more strata lots. This designation is called limited common property (or LCP). For example, in a high-rise strata apartment building, the strata plan may show that a strata lot’s balcony is LCP for that strata lot. This means that the balcony is common property, owned by all the strata lot owners as tenants in common. But the balcony is only for the use of that strata lot owner. An owner must allow the strata corporation reasonable access to common property (including limited common property) if it’s accessible only through the owner’s strata lot (for instance, a common property balcony). Typically, the strata bylaws set the procedure the strata corporation must follow to access common property through an owner’s strata lot and make repairs.
How a strata plan is created
To subdivide a building or land into strata lots and common property, a developer must file a document called a strata plan at the Land Title Office. Filing the strata plan also creates the strata corporation, whose members own the strata lots in the plan. Initially, the developer owns all the strata lots, but usually sells them to members of the public and other third parties.
Subdividing land instead of a building
The strata scheme may also subdivide land (instead of a building) into strata lots and common property. This is called a bare land strata development because it subdivided land instead of a building. Bare land strata subdivision is a very flexible tool. For example, a developer may create a recreational development where people build cottages on bare land strata lots. All the owners may use the common property in the project, including the roads, and recreational features such as hiking trails, tennis courts, and fitness facilities. Or, a developer may use a bare land strata development to create an industrial park or a manufactured home park or other similar developments.
What is a strata corporation and what does it do?
A strata corporation is a corporation that is automatically created when a developer files a strata plan at the Land Title Office. The strata corporation may buy services or goods, and sue or be sued. Also, the strata corporation oversees the common property and enforces the bylaws. The owners of the strata lots are the members of the strata corporation. The board of directors is called the strata council.
Only a strata corporation can sue third parties for defects in, and damage to, common property. Individual unit owners cannot sue anyone apart from the strata corporation, for problems with common property.
The strata corporation must manage, repair, and maintain the common property and common assets. When a strata corporation itself owns an item, for example, a lawn mower, that item is a common asset.
There are detailed requirements for waiver of meetings, notice of meetings, agenda and resolutions at meetings, electronic attendance and voting. The strata corporation must hold at least one general meeting once a year, called the annual general meeting or AGM. At the AGM, members must approve an annual budget and elect a strata council, among other things. The strata corporation must also keep certain records, such as financial records and correspondence, and make them available to owners and tenants on request.
What is a strata council and what does it do?
A strata council is an elected group of strata lot owners or, in some cases, their spouses or tenants. It is the board of directors of the strata corporation. Depending on a strata corporation’s bylaws, the strata council usually has 3 to 7 members. The term of council members ends at the end of the annual general meeting at which the new council is elected, but a council member is eligible for re-election. The council members may be removed from office by a resolution passed by a 75% vote cast in favour of removal at a meeting of owners. The strata council manages the corporation on a daily basis. In larger developments, the strata council may hire a professional management company to help manage the corporation.
Who is an owner?
The Strata Property Act defines the term owner. Generally, an owner is the person registered on title to the strata lot in the Land Title Office. For example, if a husband and wife together buy a strata lot, but only the wife goes on title at the Land Title Office, then only she is an owner under the Act.
Strata fees and special levies
Each year, a strata corporation creates an annual budget. To pay for expenses, the corporation charges proportionate strata fees to each strata lot owner based on the Schedule of Unit Entitlement. To set aside savings for repairs or long-term improvements in the development (for example, a new roof) the strata fees typically include an amount for the contingency reserve fund (the CRF). This is a strata corporation’s mandatory savings account to pay for unusual or extraordinary future expenses. Expenditures out of the reserve fund must be authorized by resolution except in emergencies.
A strata corporation may also raise funds at any time by passing a special levy if at least ¾ of the owners approve it at a general meeting. If a special levy passes, each owner is responsible for paying a proportionate share of it.
If an owner does not pay monthly strata fees or special levies on time, the strata corporation may register a lien in the Land Title Office against their strata lot. Ultimately, the strata corporation may ask the court for an order to sell the owner’s strata lot to pay the amount owing under the lien.
The strata corporation must insure the common property, common assets, any buildings shown on the strata plan and certain fixtures within the strata lot. The strata corporation must also carry liability insurance for property damage and bodily injury.
Strata lot owners need their own insurance for their personal property, for improvements to their strata lot, and liability to others for injury. Owners should also consider taking out extra insurance to cover the strata corporation’s deductibles, which can be large. It is not uncommon that a strata’s deductible for water damage is $25,000.00 or higher.
What law applies to condominiums?
The Strata Property Act controls strata developments in BC. In addition, each strata corporation must have bylaws. They set out strata lot owners’ rights and responsibilities and control what the place will be like to live in. For example, bylaws may restrict the rental of residential strata lots. Bylaws may also restrict pets and certain age groups, such as children. Similarly, bylaws will likely require strata lot owners to get permission before making significant changes to their strata lot, such as moving walls or making plumbing or electrical changes.
A strata corporation may also have rules. Rules apply only to the use and enjoyment of common property and common assets. For example, a rule may limit the size of vehicles that may park in a common-property parkade, or restrict the hours when residents can use a common-property fitness centre.
A strata corporation may change its bylaws by a 75% vote of the owners at a general meeting. When a bylaw is made, amended or repealed, the corporation must register a copy of the bylaw, amendment or repeal together with a certificate in the Land Title Office (check script 407, called “Buying a Condominium”). Until the copy and certificate are registered, the bylaw is ineffective. A strata council may pass rules at any time, but any new rules must be ratified by a majority of the owners before or at the next AGM, otherwise they cease to be effective.
Renting out a condominium
If you plan to live in your strata lot, you may want the other owners to live in their units too. If so, you may want a strata corporation with a rental-restriction bylaw. But if you are buying a residential strata lot as an investment to rent out, you will not want any rental restrictions. A strata corporation may pass a bylaw that prohibits all residential rentals or limits the number or percentage of residential rentals, so check the bylaws carefully. If you do rent out your residential unit, choose your tenant carefully. The strata corporation can hold you responsible if your tenant breaks a bylaw or rule.
Depending on the legal situation, an owner may be allowed to rent their residential strata lot, despite a rental restriction bylaw. For example, sometimes a document called a rental disclosure statement (Form J) may let an owner rent a residential strata lot despite a rental restriction bylaw. If you plan to rely on a rental disclosure statement to rent out a residential strata lot, first have a lawyer review the document. In some cases, a rental disclosure statement exempts only the first owner of the strata lot from a rental restriction bylaw.
In some cases, an owner can apply to their strata council for an exemption from a rental restriction bylaw if the bylaw causes them hardship. For example, if an owner gets transferred to another city for work and cannot afford to maintain two residences and doesn’t want to sell their strata lot, they can apply for an exemption. If the strata council gives them the exemption, the owner can rent their strata lot out without breaching the bylaw.
Can strata corporations require strata owners to pay for certain repairs?
Yes, if repairs are necessary to ensure safety or prevent significant damage to property, the strata corporation can apply to the BC Supreme Court to require strata owners to pay for the repairs if a resolution to that effect passed by a 50% + 1 vote of owners present in person or by proxy at an annual or special general meeting. For example, strata corporations may impose a special fee (called a levy) to raise money for certain critical repairs to common property.
Spending from the contingency reserve fund that is not in this category requires a 75% vote of owners present in person or by proxy at an annual or special general meeting.
There are specific systems and entities set up to solve strata disputes. They range from informal meetings with the property manager and strata council to formal processes involving the Civil Resolution Tribunal, court, or arbitration. The BC government strata housing website explains this topic.
- Check script 407, called “Buying a Condominium”.
- Check the Strata Property Act.
- Study the bylaws and rules for any condo project you are interested in.
- The BC Government’s strata housing website has information for strata owners, strata residents and strata council members. This website provides basic information on: living in a strata, different kinds of strata, operating a strata (roles and responsibilities, meetings and voting, bylaws & rules, finances & insurance, repairs & maintenance including depreciation reports) resolving strata disputes, renting, buying and selling in a strata, the role of government, strata legislation, changes to legislation, and additional help and support.
- Check the Condominium Home Owners Association of BC website.
- Check the Vancouver Island Strata Owners Association (VISOA) website.
- The Condominium Manual by Mike Mangan is available at public libraries. It is a comprehensive guide to strata law in British Columbia.
[updated November 2016]
The above was last reviewed for accuracy by Lisa Frey and Taeya Fitzpatrick, and edited by John Blois.
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