Difference between revisions of "Buying a Condominium"

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{{Dial-A-Law Blurb}}
{{REVIEWEDPLS | reviewer = [https://www.lawsonlundell.com/team-Lisa-Frey Lisa Frey], Lawson Lundell LLP, and [http://sabeyrule.ca/taeya-fitzpatrick/ Taeya Fitzpatrick], Sabey Rule|date= July 2018}} {{Dial-A-Law TOC|expanded = home}}
Buying a condominium is a lot like buying a house. But there are also important differences. Learn the key things to consider before making an offer to buy a condo.


{{Dial-A-Law TOC|expanded = housing}}
==What you should know==
This script provides general information about buying a condominium unit (or strata lot). This script assumes that you have already checked script [[Buying a House (Script 406)|406]] on “Buying a House”.


For information on owning a strata lot, check script [[Owning a Condominium (Script 401)|401]], called “Owning a Condominium”.
===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. 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'''.


==What is a condominium?==
====More than high-rise condos====
The word condominium is used in other provinces. It means a building or complex of buildings with some individual owner apartments or houses. In BC, the word condominium is used informally.
Strata housing is more than just high-rise condos. Strata housing can also include duplexes, townhouses, fractional vacation properties — even single-family homes in bare land strata corporations (called '''strata subdivisions''').


'''Strata lot'''—in BC, a condominium unit is called a strata lot. It can be an apartment, townhouse, commercial space, a freestanding house, a duplex unit, a bare lot of land containing a home, or some other configuration, as long as the strata lot is shown as a strata lot on a properly registered strata plan.
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.


'''Strata corporation'''—in BC, a condominium complex or development is called a strata corporation. A strata corporation allows for individual ownership of strata lots in a single parcel of land, and is created by a strata plan which is a series of drawings and notations registered in the Land Title Office. That strata plan is the document which shows the boundaries of each strata lot and the common property.  
====The law that applies====
In BC, [https://www.canlii.org/en/bc/laws/stat/sbc-1998-c-43/latest/sbc-1998-c-43.html the ''Strata Property Act'' is the main law governing stratas]. Under this law, a '''strata corporation''' is created when a '''strata plan''' is registered in the land title office. A strata plan is a series of drawings and notations, and shows the boundaries of each strata lot and the common property.


'''Owners''' of the strata lots are members of the strata corporation, and together own the common property, pay for the common expenses of the strata corporation, and vote on matters of common interest.
'''Owners''' of the individual strata lots are members of the strata corporation. Together, they own the common property, pay for the common expenses of the strata corporation, and vote on matters of common interest.


Bare land strata corporations are unique in that the strata plans show only a top down view of the property parcel, and each strata lot, which is a bare lot of land usually containing a home which belongs entirely to the strata lot owner.
===Not all condo complexes are stratas===
Some condominium complexes in BC are not set up as strata corporations. Some apartments, townhouses and duplexes operate under various other legal structures, such as housing co-operatives or privately-owned rental buildings. This also occurs on First Nations reserve lands, where provincial property laws don’t apply the way they do elsewhere.


==Strata corporations and other types of condominiums==
{| class="wikitable"
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 strata corporation—whether it’s a 300-unit high-rise apartment, a 50-lot bare land strata recreational development, or a 2-unit strata duplex.
|align="left"|'''Tip'''
If you’re looking to buy a unit in a housing development, getting legal advice will help you understand what legal structure is in play, and what that means for you if you make an offer.
|}
===A strata development can be freehold or leasehold===
Strata developments can be either freehold or leasehold. In a '''freehold development''', people hold '''fee simple title''' to their strata lots. That means they own their strata lots.


Some condominium complexes in BC are not strata corporations and are not governed by the ''[http://www.bclaws.ca/civix/document/id/complete/statreg/98043_00 Strata Property Act]''. Some apartments, townhouses and duplexes operate under various legal frameworks such as housing societies, privately owned rental buildings or others. This also occurs on first nations reserve lands, where provincial property law doesn’t apply normally. '''You should get legal advice to ensure that you know what you are offering to buy'''.  
In a '''leasehold''' development, the landlord owns the property, and people hold a '''leasehold interest''' in their strata lots, for a specific term. These long-term tenants are registered on title, and are treated as owners under strata property law. They must pay the monthly strata fees and any other contributions, and can sell their leasehold interest in the strata lot to the next leasehold buyer.


For more details on condominiums, check script [[Owning a Condominium (Script 401)|401]], called “Owning a Condominium”. It explains several topics including common property, limited common property, the strata plan, the strata corporation, the strata council and insurance.  
Most strata developments are freehold, where people own their strata lots.
{| class="wikitable"
|align="left"|'''Tip'''
Be cautious with leasehold developments. Make sure you understand what you are buying and that the leasehold is being valued correctly. The fair market value of a leasehold strata lot is usually much less than the value of a comparable freehold strata lot. Be sure you understand the remaining term of the head-lease, the term of your own leasehold, and what happens when the terms expire. If you are thinking of buying a leasehold strata lot, you should make any offer subject to reviewing the long-term lease and all related documents with a lawyer.
|}
==Key things to consider==


==What should you consider before making an offer to buy a condo?==
===Considerations in any home purchase===
Typically, a prospective buyer of a strata lot should request and receive documents that will let them make an informed decision about whether to buy the strata lot. '''At a minimum, a buyer should obtain and carefully review the following''':
[[buying-a-home/|Our information on buying a home covers key factors to consider when buying any type of home]], whether it’s a strata, a house, or some other type of legal structure. It covers topics such as what to include in an offer to purchase, subject to clauses, counteroffers, financing, fraud risks, the taxes payable, the statement of adjustments, and more.
:'''A. [http://www.bclaws.ca/Recon/document/ID/freeside/12_43_2000#FormBInformationCertificate Form B Information Certificate]'''—this sets out required facts about the current status of the strata corporation and the strata lot being sold. The Form should include the financial obligations for that strata lot, any parking and storage facilities assigned to the strata lot, and other useful facts. The Form B should have attached documents such as the current budget, rental disclosures statement (if any), rules and the depreciation report for the strata corporation (if there is one).  


:The Form B Information Certificate also shows if the strata corporation has adopted any new bylaws which will take effect but haven’t yet been filed at the Land Title Office, and whether the strata corporation is involved in any lawsuits or arbitration.  
Here, we explain considerations specific to buying a unit in a strata complex.


:You should always review a current Information Certificate before making an offer to buy a strata lot. Or you should make your offer subject to reviewing a current Information Certificate.  
===The information certificate and related documents===
A prospective buyer of a strata lot should review documents that will help them make an informed decision about whether to buy the strata.


:The strata corporation may charge a fee plus the cost to copy the Form B Information Certificate.
[https://www.canlii.org/en/bc/laws/stat/sbc-1998-c-43/latest/sbc-1998-c-43.html#sec59_smooth Under the law in BC], a buyer can request the strata corporation provide an '''information certificate''' (in Form B). This certificate sets out facts about the current status of the strata corporation and the strata lot being sold. The form should include the financial obligations for that strata lot, any parking and storage facilities assigned to the strata lot, the monthly strata fee and any special levy payments outstanding, and other useful facts. The form should attach documents such as the current budget, rules, any rental disclosures statement, and any depreciation report for the strata corporation.


:'''B. Depreciation report'''—every strata corporation with 5 or more strata lots must obtain a depreciation report unless the owners have regularly voted by 75% vote resolution to defer the report. If a depreciation report has been prepared, a copy of it must be attached to the Form B Information Certificate. The depreciation report must have financial forecasting and an inventory and evaluation of the common property and common assets and any other property that the strata corporation has a duty to maintain. A depreciation report helps the owners anticipate and budget for future common expenses and special assessments.  
The information certificate also shows if the strata corporation has adopted any new bylaws which will take effect but haven’t yet been filed at the land title office, and whether the strata corporation is involved in any lawsuits or arbitration.


:If a depreciation report has not been obtained, be very careful in evaluating the condition of the property as a whole.
{| class="wikitable"
|align="left"|'''Tip'''
Always review a current '''information certificate''' before making an offer to buy a strata lot. Or you should make your offer subject to reviewing a current information certificate.
|}
===Legal documents for the strata===
It is also important to review the legal documents for the strata. The '''title''' to the strata lot lists any covenants, easements and other encumbrances on title. This can reveal limitations on the use of the strata lot or charges that may affect its value.


:'''C. Title to the strata lot'''—this document lists any covenants, easements and other encumbrances on title. With your lawyer, review the documents registered against title, and confirm that there are no registered documents which reduce the value or usability of the strata lot. 
The '''strata plan''' shows the boundaries of the strata lot you are thinking of buying. It shows the '''unit entitlement''' of the lot, which determines the strata lot’s proportionate share of contributions, and the schedule of voting rights for the strata corporation. Compare your obligations to those of other strata lots to ensure they are proportionate.  
:'''D. The strata plan'''—it shows the boundaries of the strata lot you are thinking of buying. The strata plan, or associated schedules, show the unit entitlement which determines the strata lot’s proportionate share of contributions, and the schedule of voting rights for the strata corporation. Compare your obligations to those of other strata lots to ensure that they are proportionate.
:'''E. The bylaws of the strata corporation'''—these set out the specific rights and obligations which an owner has, and give you a good sense of how rigidly the strata corporation controls the owners. 
:'''F.''' Obtain and review the '''Land Title Office’s ''Strata Plan General Index''''' for other documents registered in the Land Title Office, such as limited common property designations, or other important documents, such as a rare, unanimous section 100 resolution which changes the default division of expenses.
:'''G.''' Several years of '''minutes of meetings''' of the strata council, and general meetings of the owners, including minutes of any section, can give you a sense of how active the strata council is, and recent issues the strata corporation has been dealing with. Ask for at least 2 years of minutes, and review them carefully. Request minutes for a longer if possible.
:'''H.''' For new developments, the owner-developer must give prospective first buyers a copy of the up-to-date '''disclosure statement''' including any amendments as filed with the Superintendent of Real Estate. That document discloses the intentions of the Owner-Developer, and has marketing representations, as well as disclosure of legal encumbrances and other important information.
:Although the disclosure statement itself doesn’t bind the strata corporation as a governing document, it includes schedules which are binding, and it can indicate the developer’s intentions for the development, and plans for future phases, which may be important to you.
:For older developments, it may be possible to get a copy from the seller, or the strata council.  


Checking those documents, a smart buyer or their lawyer can get a reasonable and current sense of the strata corporation and the strata lot, and any other documents to review.
{| class="wikitable"
|align="left"|'''Tip'''
Check the location, dimensions and area of your strata lot. Balconies, parking stalls, storage units and other non-residential areas you may expect to have access to are sometimes configured in odd ways legally. If the purchase of a strata lot includes the use of parking stalls or storage units, confirm the nature of your right to use these areas.
|}
 
====Bylaws, rules and minutes====
Strata lot owners must comply with the bylaws and rules of the strata corporation. Read them carefully before you buy.


==Pay attention to issues important to you, and to the following:==
The '''bylaws''' of the strata corporation set out owners’ specific rights and obligations and give you a good sense of how rigidly the strata corporation controls owners. Look carefully for any pet, age, or rental restrictions and whether they will be a problem for you.
# '''Financial obligations'''—make sure that you can afford to be an owner.
#:a. '''Monthly strata fees'''—all strata lot owners must pay a proportional part of the common expenses of the strata corporation by paying strata fees for their strata lot. The strata fees are normally based on the strata corporation’s annual budget divided by the unit entitlement which sets out the share for each strata lot. Check the current budget and the Form B Information Certificate for the current strata fees. Compare the strata fees to other similar developments.
#::i. If the strata fees seem high, check if there are expensive recreational facilities or other features, or budgeted items which you will have to help pay for—whether they benefit you or not. 
#::ii. If the strata fees seem low, consider whether the budget is adequate for the strata corporation, and be realistic about likely strata fee increases.
#:b. '''Other assessments'''—strata lot owners may need to pay other expenses, including:
#::i. '''Special levies'''—a strata lot owner also needs to pay their share of any special levy for extraordinary expenditures which is assessed against all strata lot owners
#::ii. '''User fees'''—there may be user fees to use parking or other facilities.
#::iii. '''Fines and reasonable costs of bylaw enforcement'''—these can be charged back to an owner who contravenes the bylaws or rules.
#::iv. '''Insurance deductibles'''—many strata corporations will charge an owner for insurance deductibles or other charges arising from sources of damage within a strata lot.
#:Review the financial statements and budget of the strata corporation to assess its financial situation, where money is being spent, and the balance of the contingency reserve fund and other accounts. Review what special levies and other funds have been assessed and spent on major expenses such as repairs.
# '''The physical condition of the project'''—the general rule is that every owner in a strata corporation must contribute to common expenses, such as repairs, unless an exception to the rule applies. If the development is in poor repair, you will have to pay your share of the cost to fix it, even if the repairs do not involve your strata lot or the part of the project where your unit is located. You may have to pay for special levies. that have been previously approved, with future installments.
#:Review the minutes of meetings to see if any major repairs have recently been made or are planned. If the strata lot is part of something called a '''section''', you also need to check the minutes of general meetings of the section, plus minutes of the meetings of the section’s executive. In each case, ask for complete copies of the relevant minutes for at least the past 2 years.
#:Ask to see the strata corporation’s depreciation report, and carefully review it for expensive replacements, repairs or upgrades which have been recommended, particularly those which are likely to be costly, required soon and for which no contingency reserve funds have been set aside.
# '''Is the community right for you'''—review the minutes carefully for issues which might concern you. If you are on a fixed income, or borrowing heavily to buy a strata lot, then watch for discussions which might indicate expenses, such as ongoing or threatened litigation, water leaks, building envelope problems, and structural or major repair concerns.
#:A careful review of the minutes can tell a lot about the strata corporation. You might see noise complaints relating to an adjacent strata lot, or very strict enforcement of the bylaws, recurring disputes, the existence of factions or similar trends which may concern you. Are the minutes a well-organized and well-written record of decisions, or do they resemble a gossip column? Is there a licensed strata manager involved in meetings? Do they appear to have difficulty electing a full strata council? Does the Council meet monthly or infrequently?
# '''The type of ownership: freehold or leasehold'''—our legal system distinguishes between freehold ownership and leasehold possession. In a '''leasehold development''', the landlord owns the property, but gives possession to the tenant for the term of the lease. In most condominium developments, people own their strata lots. These are called '''freehold developments'''—each owner holds “fee simple title”.
#:'''Leasehold developments'''—in these, a landlord owns the entire property parcel, but grants a long-term lease to a developer (often, for 99 years) to build a strata development there. The developer is a long-term tenant who, with the landlord’s permission, creates a strata development on the landlord’s property, and then the developer sells leasehold interests in each strata lot to buyers, for a specific term.
#:If a person is registered on title as the long-term tenant under a long-term lease in a leasehold strata development, the Strata Property Act treats that person as an owner. The long-term tenant must pay the monthly strata fees and any other contributions, such as special levies, and can sell their leasehold interest in their strata lot to the next leasehold buyer.
#:Depending on the project, the developer may prepay all the rent due under the long-term lease, or ongoing head lease payments may form a part of the leasehold strata corporation’s budget payable as part of the strata fees.
#:Be cautious with leasehold developments—be sure you understand the remaining term of the head-lease, the term of your own leasehold, and what happens when the terms expire. Normally, the long-term tenant must vacate, or leave, the strata lot, unless other arrangements are made. The landlord may have to pay an amount to the departing long-term tenant using a formula in the long-term lease or in government regulation. It is important to carefully read and fully understand the lease contracts and related documents. If you plan to buy the interest of a long-term tenant in a leasehold strata lot, you should make any offer subject to first reviewing the long-term lease and all related documents with your lawyer. Make sure that you understand what you are buying and that the leasehold is being valued correctly. The fair market value of a leasehold strata lot is usually much less than the value of a comparable freehold strata lot.
# '''Bylaws and rules'''
#:As an owner of a strata lot, you must comply with the bylaws and rules of the strata corporation. The law assumes you know them. Read them carefully before you buy.
#:Together, bylaws and rules set out rights and responsibilities of owners, tenants, occupants and visitors. They also set out special restrictions on the use of each strata lot, common property and common facilities.
#: Bylaws can very broadly restrict what people can do in the development, including restricting or prohibiting:
#:*rental of a residential strata lot by the owner to a tenant.
#:*pets as specified in the bylaw or generally.
#:*the permitted age of occupants.
#:*smoking.
#:*the use of parking stalls or vehicle size.
#:*changes to the strata lots and common property.
#:*other uses which can be made of a strata lot, common property or common facilities.
#:Reading the bylaws and rules, and comparing them to the standard bylaws, can give you some idea about how restrictive the strata corporation is. It also provides some assurance that the priorities of the strata corporation match yours. Consider how you might want to use your strata lot. Don’t make any assumptions without carefully reviewing the bylaws and rules and satisfying yourself that you will be able to use the strata lot as you intend, and that your vehicle, pet, child and possessions will be able to move in with you.
#:Get a copy of any rules. Although rules apply only to the use and enjoyment of common property and common assets, they are not registered in the Land Title Office, and can specifically restrict activities which might be important to you. For example, a rule may limit the size of vehicles that can park in a common-property parkade, or restrict the hours when a common-property fitness centre is open.
#:If you ask, a seller can obtain strata documents from the strata corporation for you to review, including the up-to-date, consolidated bylaws, and a complete copy of the rules.
#:Bylaws and rules can be changed, and some changes may dramatically affect how you can use your property.
# '''Other restrictions'''—bylaws and rules are not the only documents which can restrict how you may use a strata lot. Covenants, easements and other documents registered against title may limit the use of the strata lot or affect its value. For example, in a bare land strata development, the title of your strata lot may be encumbered with a building scheme that restricts your use of the strata lot or limits the size or other details of any house you want to build on your strata lot.
#:Municipal bylaws and zoning rules may further restrict use of a strata lot.
#:With your lawyer, review the results of a current title search for the strata lot, and the other legal documents and circumstances.
# '''Confirm what you are buying'''—check the location, dimensions and area of your strata lot. Balconies, parking stalls, storage units and other non-residential areas you may expect to have access to are sometimes configured in odd ways legally. For example parking spaces can be common property, limited common property, or part of your strata lot.  Each of those configurations have differing legal effects and can change your repair obligations.
#:If the parking stall or storage locker currently assigned to the strata lot is designated as common property, then the bylaws may allow the strata corporation to allocate or reallocate the use of a stall or locker, and you need to confirm whether you will keep that assignment. The strata corporation may also use a short-term exclusive use agreement or special privilege to give an individual owner or tenant the use of a stall or locker for up to one year. After that it must be renewed if they want the use to continue. Or the developer may have arranged for an affiliated corporation to hold a long-term lease over the common property parking or storage area. In that case, to use a particular stall or locker, the owner may need to negotiate an assignment of the right to use that stall or locker under the long-term lease.
#:If the purchase of a strata lot includes the use of one or more parking stalls or storage units, you should confirm the nature of your right to use the parking stalls or storage units. Verify that any limited common property features like balconies, parking lots, and storage units are assigned to your strata lot in the manner, size and location which matches your expectations, are correctly noted on the registered documents and match the representations in the Form B Information Certificate, the real estate listing and any seller representations.
#:Strata corporations must now disclose the designation of parking and storage lockers, and how they are allocated to a strata lot in the Form B Information Certificate.
#:Put all your questions in writing and get written answers from the seller and, if possible, the strata council.


==Use a lawyer==
A strata corporation’s '''rules''' set out how common property and common assets can be used. Look for whether they restrict activities that might be important to you. For example, a rule may limit what size of vehicle can park in a common-property parkade, or restrict the hours when a common-property fitness centre is open.
Before making an offer to buy a condominium, have a lawyer review the critical documents, including the contract of purchase and sale, legal title to the strata lot, the strata plan and any amendments, limited common property designations and other resolutions affecting common property, the Form B Information Certificate, legal issues identified in the minutes, and the bylaws and rules.  


If you can’t see a lawyer before you make an offer, then add a sentence to your offer saying it is subject to your lawyer’s review of the strata documents to confirm that no features reduce the use or value of the strata lot. Then take the offer to your lawyer before you remove any of the “subject to” clauses or the deadline for doing so expires. Strata lots are expensive and buying one is complicated. Mistakes can be costly. It makes sense to use a lawyer.
Past '''minutes of meetings''' of the strata council, and general meetings of the owners, can give you a sense of how active the strata council is, and recent issues the strata corporation has been dealing with, such as water leaks or expensive repairs coming up. Ask for at least two years of minutes (ideally, more than that), and review them carefully.


Be very careful about rent-to-own, time share and other non-standard ways of buying a strata lot—do not sign any agreement without comprehensive legal advice.
====For new strata developments====
For new developments, the owner-developer must give prospective first buyers a copy of an up-to-date '''disclosure statement'''. This document discloses the intentions of the owner-developer, and has marketing representations, as well as disclosure of legal encumbrances and other important information.


==More information==
===Financial obligations===
* Check script [[Owning a Condominium (Script 401)|401]], called “Owning a Condominium”. Because buying a condo is very like buying a house, you should also check script [[Buying a House (Script 406)|406]], called “Buying a House.” It outlines many important topics not covered here, including “subject to” clauses, title searches, fraud risks, property inspections, the statement of adjustments, and more.
Make sure you can afford to be an owner in the strata you're considering. Review the financial statements and budget of the strata corporation to assess its financial situation, where money is being spent, and the balance of the '''contingency reserve fund''' (a fund to pay for infrequent or unexpected common expenses). Review what special levies and other funds have been assessed and spent on major expenses such as repairs.
* If you need financing, check script [[Mortgages and Financing a House Purchase (Script 408)|408]], called “Mortgages and Financing a House Purchase”.
* Check the ''[http://www.bclaws.ca/civix/document/id/complete/statreg/98043_00 Strata Property Act]''.
* The BC Government’s [http://www.gov.bc.ca/strata strata housing website] has information for strata owners, strata residents and strata council members. This website provides basic information on: [http://www2.gov.bc.ca/gov/topic.page?id=4E77455DEFAB4D1DA118FEA737C6300F living in a strata], [http://www2.gov.bc.ca/gov/topic.page?id=4898D88A4F8649F59F7C84D9C496873E different kinds of strata], [http://www2.gov.bc.ca/gov/topic.page?id=5E860FC0848E48E98DFB08D0FBE3FC30 operating a strata] (roles and responsibilities, meetings and voting, bylaws & rules, finances & insurance, repairs & maintenance including depreciation reports) [http://www2.gov.bc.ca/gov/content/housing-tenancy/strata-housing/resolving-disputes/the-civil-resolution-tribunal resolving strata disputes], [http://www2.gov.bc.ca/gov/content/housing-tenancy/strata-housing/renting-buying-selling renting, buying and selling in a strata], the [http://www2.gov.bc.ca/gov/content/housing-tenancy/local-governments role of government], [http://www2.gov.bc.ca/gov/topic.page?id=E9C78FD1A3C24148A8D6AE83A8CBF883 strata legislation], [http://www2.gov.bc.ca/gov/content/housing-tenancy/strata-housing/legislation-and-changes/changes-to-legislation changes to legislation], and additional [http://www2.gov.bc.ca/gov/content/housing-tenancy/strata-housing/more-help-and-support help and support].
* Check the Condominium Home Owners Association of BC [http://www.choa.bc.ca/ website].
*Check the Vancouver Island Strata Owners Association (VISOA) [http://www.visoa.bc.ca website].
* ''[http://www.condomanual.ca/ The Condominium Manual]'' by Mike Mangan is available at public libraries.  


====Monthly strata fees====
All strata lot owners must pay a proportional part of the common expenses of the strata corporation by paying '''strata fees''' for their strata lot. The strata fees are typically based on the strata corporation’s annual budget, divided by the unit entitlement which sets out the share for each strata lot. Check the current budget and the information certificate for the current strata fees. Compare the strata fees to other similar developments.


[updated November 2016]
If the strata fees seem high, check if there are expensive recreational facilities or other features, or budgeted items which you will have to help pay for — whether they benefit you or not.


'''The above was last reviewed for accuracy by Lisa Frey and Taeya Fitzpatrick, and edited by John Blois.'''
If the strata fees seem low, consider whether the budget is adequate, and be realistic about likely strata fee increases and large special levies that may be needed for expensive repairs.
----
----


====Other assessments====
Strata lot owners may need to pay other expenses, including:


* '''Special levies'''. A strata lot owner also needs to pay their share of any special levy for extraordinary expenditures assessed against all strata lot owners.
* '''User fees'''. There may be user fees to use parking or other facilities.
* '''Insurance deductibles'''. Many strata corporations will charge an owner for insurance deductibles or other charges arising from sources of damage within a strata lot.
===The physical condition of the project===
The general rule is that every owner in a strata corporation must contribute to common expenses, such as repairs, unless an exception to the rule applies. If the development is in poor repair, you will have to pay your share of the cost to fix it, even if the repairs do not involve your strata lot or the part of the project where your unit is located. You may have to pay for special levies that have been previously approved, with future installments. Future installments should be disclosed in the Form B information certificate.
Review the minutes of strata meetings to see if any major repairs have recently been made or are planned. Ask for copies of minutes for at least the past two years.
Ask to see the strata corporation’s depreciation report, and review it for any expensive replacements, repairs or upgrades which have been recommended.
===Whether the community is right for you===
Review the minutes of strata meetings carefully for issues which might concern you. If you are on a fixed income, or borrowing heavily to buy a strata lot, watch for discussions that might indicate expenses, such as ongoing or threatened litigation, water leaks, building envelope problems, or structural repair concerns.
A careful review of the minutes can tell a lot about the strata. You might see noise complaints relating to an adjacent strata lot, or very strict enforcement of the bylaws, recurring disputes, the existence of factions or similar trends which may concern you. Is there a licensed strata manager involved in meetings? Do they appear to have difficulty electing a full strata council? Does the council meet monthly or infrequently?
 
===Hiring a lawyer===
Before making an offer to buy a condominium, consider having a lawyer review the critical documents, including the contract of purchase and sale, legal title to the strata lot, the strata plan, the information certificate, strata meeting minutes, and the bylaws and rules.
If you can’t see a lawyer before you make an offer, consider adding a sentence to your offer saying it is subject to a lawyer’s review of the strata documents to confirm that no features reduce the use or value of the strata lot. Then take the offer to your lawyer before you remove any of the subject to clauses or the deadline for doing so expires. Buying a strata lot involves risks and pitfalls that a lawyer can help you avoid.
{| class="wikitable"
|align="left"|'''Tip'''
Be very careful about rent-to-own, time share, and other non-standard ways of buying a strata lot — do not sign any agreement without legal advice.
|}
==Who can help==
===With more information===
The '''BC government'''’s strata housing website has extensive information for strata owners and strata council members.
[https://www2.gov.bc.ca/gov/content/housing-tenancy/strata-housing Visit website]
The '''Condominium Home Owners Association of BC''' promotes the understanding of strata property living and the interests of strata property owners.
[https://www.choa.bc.ca/ Visit website]
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Latest revision as of 04:44, 16 October 2020

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.
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Buying a condominium is a lot like buying a house. But there are also important differences. Learn the key things to consider before making an offer to buy a condo.

What you should know

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. 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.

More than high-rise condos

Strata housing is more than just high-rise condos. Strata housing can also include duplexes, townhouses, fractional vacation properties — even single-family homes in bare land strata corporations (called strata subdivisions).

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.

The law that applies

In BC, the Strata Property Act is the main law governing stratas. Under this law, a strata corporation is created when a strata plan is registered in the land title office. A strata plan is a series of drawings and notations, and shows the boundaries of each strata lot and the common property.

Owners of the individual strata lots are members of the strata corporation. Together, they own the common property, pay for the common expenses of the strata corporation, and vote on matters of common interest.

Not all condo complexes are stratas

Some condominium complexes in BC are not set up as strata corporations. Some apartments, townhouses and duplexes operate under various other legal structures, such as housing co-operatives or privately-owned rental buildings. This also occurs on First Nations reserve lands, where provincial property laws don’t apply the way they do elsewhere.

Tip

If you’re looking to buy a unit in a housing development, getting legal advice will help you understand what legal structure is in play, and what that means for you if you make an offer.

A strata development can be freehold or leasehold

Strata developments can be either freehold or leasehold. In a freehold development, people hold fee simple title to their strata lots. That means they own their strata lots.

In a leasehold development, the landlord owns the property, and people hold a leasehold interest in their strata lots, for a specific term. These long-term tenants are registered on title, and are treated as owners under strata property law. They must pay the monthly strata fees and any other contributions, and can sell their leasehold interest in the strata lot to the next leasehold buyer.

Most strata developments are freehold, where people own their strata lots.

Tip

Be cautious with leasehold developments. Make sure you understand what you are buying and that the leasehold is being valued correctly. The fair market value of a leasehold strata lot is usually much less than the value of a comparable freehold strata lot. Be sure you understand the remaining term of the head-lease, the term of your own leasehold, and what happens when the terms expire. If you are thinking of buying a leasehold strata lot, you should make any offer subject to reviewing the long-term lease and all related documents with a lawyer.

Key things to consider

Considerations in any home purchase

Our information on buying a home covers key factors to consider when buying any type of home, whether it’s a strata, a house, or some other type of legal structure. It covers topics such as what to include in an offer to purchase, subject to clauses, counteroffers, financing, fraud risks, the taxes payable, the statement of adjustments, and more.

Here, we explain considerations specific to buying a unit in a strata complex.

The information certificate and related documents

A prospective buyer of a strata lot should review documents that will help them make an informed decision about whether to buy the strata.

Under the law in BC, a buyer can request the strata corporation provide an information certificate (in Form B). This certificate sets out facts about the current status of the strata corporation and the strata lot being sold. The form should include the financial obligations for that strata lot, any parking and storage facilities assigned to the strata lot, the monthly strata fee and any special levy payments outstanding, and other useful facts. The form should attach documents such as the current budget, rules, any rental disclosures statement, and any depreciation report for the strata corporation.

The information certificate also shows if the strata corporation has adopted any new bylaws which will take effect but haven’t yet been filed at the land title office, and whether the strata corporation is involved in any lawsuits or arbitration.

Tip

Always review a current information certificate before making an offer to buy a strata lot. Or you should make your offer subject to reviewing a current information certificate.

Legal documents for the strata

It is also important to review the legal documents for the strata. The title to the strata lot lists any covenants, easements and other encumbrances on title. This can reveal limitations on the use of the strata lot or charges that may affect its value.

The strata plan shows the boundaries of the strata lot you are thinking of buying. It shows the unit entitlement of the lot, which determines the strata lot’s proportionate share of contributions, and the schedule of voting rights for the strata corporation. Compare your obligations to those of other strata lots to ensure they are proportionate.

Tip

Check the location, dimensions and area of your strata lot. Balconies, parking stalls, storage units and other non-residential areas you may expect to have access to are sometimes configured in odd ways legally. If the purchase of a strata lot includes the use of parking stalls or storage units, confirm the nature of your right to use these areas.

Bylaws, rules and minutes

Strata lot owners must comply with the bylaws and rules of the strata corporation. Read them carefully before you buy.

The bylaws of the strata corporation set out owners’ specific rights and obligations and give you a good sense of how rigidly the strata corporation controls owners. Look carefully for any pet, age, or rental restrictions and whether they will be a problem for you.

A strata corporation’s rules set out how common property and common assets can be used. Look for whether they restrict activities that might be important to you. For example, a rule may limit what size of vehicle can park in a common-property parkade, or restrict the hours when a common-property fitness centre is open.

Past minutes of meetings of the strata council, and general meetings of the owners, can give you a sense of how active the strata council is, and recent issues the strata corporation has been dealing with, such as water leaks or expensive repairs coming up. Ask for at least two years of minutes (ideally, more than that), and review them carefully.

For new strata developments

For new developments, the owner-developer must give prospective first buyers a copy of an up-to-date disclosure statement. This document discloses the intentions of the owner-developer, and has marketing representations, as well as disclosure of legal encumbrances and other important information.

Financial obligations

Make sure you can afford to be an owner in the strata you're considering. Review the financial statements and budget of the strata corporation to assess its financial situation, where money is being spent, and the balance of the contingency reserve fund (a fund to pay for infrequent or unexpected common expenses). Review what special levies and other funds have been assessed and spent on major expenses such as repairs.

Monthly strata fees

All strata lot owners must pay a proportional part of the common expenses of the strata corporation by paying strata fees for their strata lot. The strata fees are typically based on the strata corporation’s annual budget, divided by the unit entitlement which sets out the share for each strata lot. Check the current budget and the information certificate for the current strata fees. Compare the strata fees to other similar developments.

If the strata fees seem high, check if there are expensive recreational facilities or other features, or budgeted items which you will have to help pay for — whether they benefit you or not.

If the strata fees seem low, consider whether the budget is adequate, and be realistic about likely strata fee increases and large special levies that may be needed for expensive repairs.

Other assessments

Strata lot owners may need to pay other expenses, including:

  • Special levies. A strata lot owner also needs to pay their share of any special levy for extraordinary expenditures assessed against all strata lot owners.
  • User fees. There may be user fees to use parking or other facilities.
  • Insurance deductibles. Many strata corporations will charge an owner for insurance deductibles or other charges arising from sources of damage within a strata lot.

The physical condition of the project

The general rule is that every owner in a strata corporation must contribute to common expenses, such as repairs, unless an exception to the rule applies. If the development is in poor repair, you will have to pay your share of the cost to fix it, even if the repairs do not involve your strata lot or the part of the project where your unit is located. You may have to pay for special levies that have been previously approved, with future installments. Future installments should be disclosed in the Form B information certificate.

Review the minutes of strata meetings to see if any major repairs have recently been made or are planned. Ask for copies of minutes for at least the past two years.

Ask to see the strata corporation’s depreciation report, and review it for any expensive replacements, repairs or upgrades which have been recommended.

Whether the community is right for you

Review the minutes of strata meetings carefully for issues which might concern you. If you are on a fixed income, or borrowing heavily to buy a strata lot, watch for discussions that might indicate expenses, such as ongoing or threatened litigation, water leaks, building envelope problems, or structural repair concerns.

A careful review of the minutes can tell a lot about the strata. You might see noise complaints relating to an adjacent strata lot, or very strict enforcement of the bylaws, recurring disputes, the existence of factions or similar trends which may concern you. Is there a licensed strata manager involved in meetings? Do they appear to have difficulty electing a full strata council? Does the council meet monthly or infrequently?

Hiring a lawyer

Before making an offer to buy a condominium, consider having a lawyer review the critical documents, including the contract of purchase and sale, legal title to the strata lot, the strata plan, the information certificate, strata meeting minutes, and the bylaws and rules.

If you can’t see a lawyer before you make an offer, consider adding a sentence to your offer saying it is subject to a lawyer’s review of the strata documents to confirm that no features reduce the use or value of the strata lot. Then take the offer to your lawyer before you remove any of the subject to clauses or the deadline for doing so expires. Buying a strata lot involves risks and pitfalls that a lawyer can help you avoid.

Tip

Be very careful about rent-to-own, time share, and other non-standard ways of buying a strata lot — do not sign any agreement without legal advice.

Who can help

With more information

The BC government’s strata housing website has extensive information for strata owners and strata council members.

Visit website

The Condominium Home Owners Association of BC promotes the understanding of strata property living and the interests of strata property owners.

Visit website

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