Strata Corporation Finances (22:VIII): Difference between revisions
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Each strata corporation must establish an operating fund (SPA, s 92) to be used for common expenses that occur either once a year or more often than once a year. Examples include landscaping, management fees, annual inspection fees, and office and administrative expenses. | Each strata corporation must establish an operating fund (SPA, s 92) to be used for common expenses that occur either once a year or more often than once a year. Examples include landscaping, management fees, annual inspection fees, and office and administrative expenses. | ||
'''a) Common Expenses''' | '''a) Common Expenses'''<BR> | ||
Under s 1(1) of the SPA, “common expenses” is defined as those expenses: | Under s 1(1) of the SPA, “common expenses” is defined as those expenses: | ||
# Relating to the common property and common assets of the strata corporation; or | # Relating to the common property and common assets of the strata corporation; or | ||
# Required to meet any other purpose or obligation of the strata corporation. | # Required to meet any other purpose or obligation of the strata corporation. | ||
'''b) Strata Fees''' | '''b) Strata Fees'''<BR> | ||
To create the operating fund, each owner contributes fees that are determined by reference to the budget approved at the annual general meeting. These fees are generally a strata corporation’s primary source of income. The default formula to calculate strata fees is set out in s 99: | To create the operating fund, each owner contributes fees that are determined by reference to the budget approved at the annual general meeting. These fees are generally a strata corporation’s primary source of income. The default formula to calculate strata fees is set out in s 99: | ||
Revision as of 17:53, 1 August 2023
| This information applies to British Columbia, Canada. Last reviewed for legal accuracy by the Law Students' Legal Advice Program on July 24, 2023. |
A. Introduction to Strata Corporation Finances
A strata corporation collects funds from the owners to fulfill many of its duties. Funds are collected and allocated to the strata corporation’s operating fund, contingency reserve fund, or a special levy fund. The funds are spent in accordance with the authority granted at an annual or special general meeting and within the confines of the SPA and its SPR.
B. Operating Fund
1. Purpose of Operating Fund
Each strata corporation must establish an operating fund (SPA, s 92) to be used for common expenses that occur either once a year or more often than once a year. Examples include landscaping, management fees, annual inspection fees, and office and administrative expenses.
a) Common Expenses
Under s 1(1) of the SPA, “common expenses” is defined as those expenses:
- Relating to the common property and common assets of the strata corporation; or
- Required to meet any other purpose or obligation of the strata corporation.
b) Strata Fees
To create the operating fund, each owner contributes fees that are determined by reference to the budget approved at the annual general meeting. These fees are generally a strata corporation’s primary source of income. The default formula to calculate strata fees is set out in s 99:
𝑈𝑛𝑖𝑡 𝐸𝑛𝑡𝑖𝑡𝑙𝑒𝑚𝑒𝑛𝑡 𝑜𝑓 𝑆𝑡𝑟𝑎𝑡𝑎 𝐿𝑜𝑡 𝐸𝑛𝑡𝑖𝑡𝑙𝑒𝑚𝑒𝑛𝑡 𝑜𝑓 𝑎𝑙𝑙 𝑆𝑡𝑟𝑎𝑡𝑎 𝐿𝑜𝑡𝑠 ×𝑇𝑜𝑡𝑎𝑙 𝐶𝑜𝑛𝑡𝑟𝑖𝑏𝑢𝑡𝑖𝑜𝑛𝑠
Per s 107(1), interest can be charged by bylaw on late payments so long as the rate of interest does not exceed what is set out by the SPR, which is currently 10% per annum, compounded annually.
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