Owning a Condominium (Script 401)

From Clicklaw Wikibooks

This script explains several details about owning a condominium (or condo). For information on buying a condo, check script 407, called “Buying a Condominium”.

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, 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. 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.

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 where 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 majority vote at a meeting of owners.

Strata council meetings

A strata council should meet at least once every year. The strata corporation’s bylaws set out how council meetings are called. At council meetings, members decide how to govern the strata corporation, including:

  • Preparing the budget for the strata corporation and paying strata corporation bills
  • Arranging insurance for the strata corporation
  • Enforcing the bylaws and rules of the strata corporation, including fining owners for breaches
  • Handling owner complaints about bylaw breaches or items that require repair or maintenance
  • Approving strata lot and common property alterations
  • Managing the common property

At each council meeting, minutes are prepared to record the decisions made at the meeting.

Strata council minutes

Strata council minutes summarize the strata council’s decisions during the strata council meeting. There is no required form for minutes, but they should record all council decisions and include:

  1. The date of the meeting
  2. The time the meeting started
  3. The names of council members attending
  4. If any observers attend the meeting, their names
  5. A list of all business attended to at the meeting, which can include:
    • Receipt of, and response to, owner or occupant correspondence
    • Repair and maintenance issues and council’s decision on how to resolve them
    • The amount of any expense and its purpose
    • Whether any bylaw complaints were received and council’s decision how to handle them (for example, sending a notice to the offending owner)
    • Any other item that council votes on or decides on
  6. The next proposed meeting date, if any
  7. The time the meeting ended

Minutes do not need to include the discussions that lead to the council decisions. They should be concise, with only the required personal information.

If sensitive topics are discussed at a council meeting, the council should hold a private or closed meeting (called, in camera) for that topic. All observers must leave the meeting for that session. And only the result of the discussion is recorded in the minutes. The names of the people involved should not be included, only strata lot numbers or unit numbers.

Private or closed meetings can be used when the council is considering whether an owner has breached a bylaw, whether fines should be levied, when legal action is discussed, when hardship applications are considered, when human rights code accommodations are considered, and for other sensitive topics. For more information on restrictions for council minutes, see the Office of the Information & Privacy Commissioner for British Columbia’s Privacy Guidelines for Strata Corporations and Strata Agents.

Records that strata corporations must keep

Section 35 of the Strata Property Act lists the documents and records a strata corporation must keep. Section 4.1 of the Regulation set out how long the records and documents must be kept.

The following records must be kept up to date:

  1. a list of council members, including either a phone number or other method to contact council members on short notice (as long as the method is not prohibited in the bylaws)
  2. 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, and unit entitlements
  3. the names and addresses of mortgagees who have filed a “Form C: Mortgagee's Request for Notification”
  4. the names of tenants, and any assignments of voting or other rights by landlords to tenants
  5. books of account showing money received and spent and the reason for the receipt or expenditure
  6. the Strata Property Act and the regulations
  7. the bylaws and rules of the strata corporation

The strata corporation must also keep copies of all the following documents for at least 6 years:

  1. Minutes of all annual and special general meetings, including the results of any votes
  2. Books of account showing money received and spent and the reason for the receipt or expenditure
  3. waivers of general meetings, waivers of notice to general meetings, and written consents for resolutions of those meetings
  4. the budget and financial statement for the current year and for previous years
  5. income tax returns, if any
  6. bank statements, cancelled cheques and certificates of deposit
  7. information Certificates issued under section 59
  8. the financial records obtained from the Owner Developer

Some records must be kept permanently:

  1. resolutions that deal with changes to common property, including the designation of limited common property
  2. any decision of an arbitrator or judge in a proceeding in which the strata corporation was a party
  3. any legal opinions obtained by the strata corporation
  4. any depreciation reports obtained by the strata corporation under section 94
  5. any repair and maintenance reports obtained by the strata corporation on repair or maintenance of major items in the strata corporation, unless the item has been disposed of or replaced

Some documents from the Owner Developer must be kept permanently. Sections 20 and 23 of the Strata Property Act list them.

Lastly, any correspondence sent or received by the strata corporation or its council must be kept for at least 2 years.

Where are strata records kept?

The Act does not say where strata records must be kept. If the strata has a strata manager, it typically keeps the records at its office or place or business.

If the strata does not have a strata manager, the strata council must arrange to keep the required strata documents where they can be inspected and copied by those with a right to inspect and copy the records.

Who has access to strata records?

All owners have the right to inspect and receive copies of the strata records. If an owner has assigned their ownership rights to their tenant under section 147 or 148 of the Act, the tenant also has the right to inspect and copy the strata records. The owner or the qualified tenant can also authorize, in writing, someone to inspect and copy the records for them.

If the strata council receives a request to inspect or receive copies of strata records, it must provide access or copies within 2 weeks of the request. This applies only to strata records. Bylaw requests must be provided within 1 week.

The strata council can charge up to $0.25/page for copies of strata records and require payment before it provides the copies.

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 must pay 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.

Insurance

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 strata 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, 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.

Resolving disputes

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, and arbitration. The BC government strata housing website explains this topic.

More information


[updated July 2018]

The above was last reviewed for accuracy by Lisa Frey and Taeya Fitzpatrick, and edited by John Blois.




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