Owning a Condominium (No. 401)
|This information applies to British Columbia, Canada. Last reviewed for legal accuracy by Lisa Frey, Lawson Lundell LLP and Taeya Fitzpatrick, Sabey Rule in July 2018.|
Owning a condominium isn’t the same as owning a house. In many ways, it’s more complex. Learn the legal framework involved, and common questions for those who own a condo.
- 1 Understand the legal framework
- 1.1 In BC, a condominium is called a “strata”
- 1.2 Property that is not part of a strata lot is “common property”
- 1.3 A strata corporation governs the strata
- 1.4 A strata council manages the strata
- 1.5 The strata corporation must keep certain records
- 1.6 The strata corporation can charge strata fees
- 1.7 The law and rules that apply to stratas
- 2 Common questions
- 3 Get help
Understand the legal framework
In BC, a condominium is called a “strata”
The term condominium means a building or complex of buildings containing a number of individually owned units or houses. In British Columbia, the term is used informally. But the legal term for a condominium in BC is strata. In strata housing, the owners own their individual strata lots and together own the common property as a strata corporation.
In a typical high-rise strata building, each unit is a separate strata lot. But strata housing is more than just high-rise condos. Depending on the development, a strata lot may be an apartment, a half-duplex, a townhouse, a retail store — even a single-family home in what’s called a “strata subdivision”.
It’s not the size or shape of a development that makes it a strata. Instead, it’s the legal structure used. If a development is legally created by a strata plan, it’s a strata — whether it’s a 300-unit high-rise apartment or a two-unit strata duplex.
Property that is not part of a strata lot is “common property”
Any part of the land and buildings shown on a strata plan that is not part of a strata lot is common property. Typical common property includes hallways, elevators, gardens, recreational amenities, garbage facilities, 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.
Strata lot owners own common property together
Strata lot owners automatically own a proportionate interest in the common property, together with 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 schedule of unit entitlement that is filed with the strata plan in the Land Title Office.
The strata corporation may make bylaws and rules to govern the use, safety and condition of the common property. Every owner can use the common property. They have to follow the bylaws and rules setting out how they can use it.
Limited common property
Sometimes, common property may be set aside for the use of only certain people. A strata can designate an area of common property for the exclusive use of one or more strata lots. This designation is called limited common property. For example, in a high-rise condo building, the strata plan may show that a strata lot’s balcony is limited common property for that strata lot. This means 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.
A strata corporation governs the strata
When a strata plan is registered in the Land Title Office, it establishes a strata corporation. The owners of the strata lots in the strata plan are members of the strata corporation. The board of directors is called the strata council.
The strata corporation enforces the bylaws of the strata. The strata corporation manages and maintains 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.
The strata corporation may buy services or goods, and sue or be sued. In fact, only a strata corporation can sue third parties for defects in or damage to common property.
Under BC law, there are detailed requirements for meetings of the strata corporation. 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.
A strata council manages the strata
A strata council is an elected group of strata lot owners. 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 three to seven members. In some stratas, the tenants or spouses of strata lot owners can serve as council members.
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
Strata council minutes
At each strata council meeting, minutes are prepared to record the decisions made at the meeting. There is no required form for minutes, but they should record all council decisions and include details such as who was at the meeting and the business attended to at the meeting. For example, if the council received a bylaw complaint, the minutes should record the council’s decision on how to handle the complaint, such as by sending a notice to the offending owner. Minutes do not need to include the discussions that lead to the council decisions.
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 strata corporation must keep certain records
Records that must be kept and updated include:
- a list of council members
- a list of owners, with their strata lot addresses, parking stall and storage locker numbers, and unit entitlements
- the names of any tenants
- books of account showing money received and spent, and why
- the bylaws and rules of the strata corporation
The strata corporation must also keep certain documents for at least six years. For example:
- minutes of all annual and special general meetings, including the results of any votes
- the annual budget and financial statement
- bank statements, cancelled cheques and certificates of deposit
- information certificates issued
Some records must be kept permanently, such as:
- resolutions that deal with changes to common property, including the designation of limited common property
- any decision of an arbitrator or judge in a proceeding in which the strata corporation was a party
- any legal opinions obtained by the strata corporation
- any depreciation reports obtained by the strata corporation
Any correspondence sent or received by the strata corporation or its council must be kept for at least two years.
Where strata records are kept
The law 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 of business.
If the strata does not have a strata manager, the strata council must arrange to keep the required records 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, 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.
The strata corporation can charge strata fees
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. 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 three-quarters 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.
The law and rules that apply to stratas
In BC, the Strata Property Act is the main law governing stratas. 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 strata lots. Bylaws may also restrict pets and certain age groups, such as children. In most stratas, the bylaws 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.
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.
Can I rent out my condo unit?
Some stratas have a rental restriction bylaw. A strata corporation may pass a bylaw that prohibits all residential rentals or limits the number or percentage of residential rentals.
Sometimes a document called a rental disclosure statement may let an owner rent a residential strata lot despite a rental restriction bylaw. If you plan to rely on a rental disclosure statement, have a lawyer review the document. In some cases, it 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.
If you do rent out your unit, choose your tenant carefully. The strata corporation can hold you responsible if your tenant breaks a bylaw or rule.
Can the strata corporation require strata unit owners to pay for certain repairs?
Yes. Strata corporations may impose a special fee (called a levy) to raise money for certain critical repairs to common property. A resolution for a special levy must be developed and submitted for approval at a general meeting by a 3/4 vote.
If the special levy is for repairs that are necessary to ensure safety or prevent significant damage to property, and the resolution receives at least majority support, the strata corporation can apply to court to order the special levy approved.
Does a strata corporation need insurance?
Yes. Under the law, the strata corporation must insure the common property, common assets, 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 or higher.
I’m in a dispute with my strata. What options do I have to resolve it?
Strata disputes can be resolved within the strata corporation or by using systems set up to resolve strata disputes. The BC government strata housing website explains a number of options for informal meetings with the property manager or strata council.
Alternatively, strata owners, residents, and strata council members may use the Civil Resolution Tribunal (CRT) to resolve many strata disputes. This is an online tribunal that encourages a collaborative approach to resolving disputes. See the CRT website at civilresolutionbc.ca.
With more Information
The BC government’s strata housing website has extensive information for strata owners and strata council members.
- Web: gov.bc.ca/strata
The Condominium Home Owners Association of BC promotes the understanding of strata property living and the interests of strata property owners.
- Web: choa.bc.ca
The Office of the Information & Privacy Commissioner for British Columbia’s website includes privacy guidelines for stratas.
- Web: oipc.bc.ca
|Dial-A-Law © People's Law School is licensed under a Creative Commons Attribution - NonCommercial - ShareAlike 4.0 International Licence.|