What is a Strata?
Depending on the development, a strata lot may be an apartment, a townhouse, a retail store, a medical office and so on. In a high-rise strata building each apartment is a separate strata lot. In this example, the strata scheme allows people to own their apartment.
The words strata and condominium mean the same thing. British Columbia is the only place in North America that uses the word “strata” instead of “condominium”.
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 duplex.
Common property and limited common propertyAny property in the development that is not part of a strata lot is common property. In a condominium building, typical common property includes elevators, gardens, recreational amenities, garbage facilities, building security features, and the roof and exterior walls.
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).
A strata lot may also have exclusive use of an area of common property. This 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. The balcony is common property, owned by all the strata lot owners as tenants in common. But each strata lot owner has exclusive use of the balcony of their apartment.
How a strata plan is createdTo subdivide a building or land into strata lots and common property, a developer must file a document called the 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.
Subdividing land instead of a buildingA strata scheme can also subdivide land (instead of a building) into strata lots and common property. This is called a bare land strata development. Bare land strata subdivision is a very flexible tool. 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.
What is a strata corporation and what does it do?A strata corporation is automatically created when a developer files a strata plan at the Land Title Office. The strata corporation is, in law, an artificial person that can do everything of a legal nature that a real person can do. For example, a strata corporation may buy services or goods, or sue or be sued. Mainly, the strata corporation oversees the common property and enforces the bylaws. The owners of the strata lots are the members of the strata corporation. And the board of directors is called the strata council.
Strata lot owners meet periodically in general meetings. The strata corporation must hold a general meeting at least once a year, where members approve an annual budget, elect a strata council, and vote on any resolutions.
Normally, each residential strata lot has one vote. A non-residential strata lot (for example, a commercial strata lot), may have more than one vote, but only if a Schedule of Voting Rights (also called a Form W) allows it. Any Schedule of Voting Rights must be filed at the Land Title Office with the strata plan.
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.
What is the strata council and what does it do?The strata council is an elected group of strata owners or, in some cases, tenants. It is the board of directors of the strata corporation. It manages the corporation on a daily basis. In larger developments, the strata council may hire a professional management company to manage the corporation. Depending on a strata corporation’s bylaws, the strata council usually has 3 to 7 members.
OwnerThe 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 feesEach 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.
If a strata lot owner does not pay their monthly strata fees, 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.
InsuranceThe strata corporation must insure the common property, common assets, any buildings shown on the strata plan and certain fixtures. 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.
What law applies to Strata's?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. Bylaws also allow the strata corporation to penalize owners who violate the bylaws.
A strata corporation may also have rules. They 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 and rules at any time.
Renting out a condominiumIf you plan to live in your strata lot, you may want the other owners to live in their units too. You would want rental restrictions. But if you are buying a residential strata lot as an investment to rent out, you will not want any rental restrictions. Bylaws may restrict whether you can rent out a residential strata lot, so check the bylaws carefully. 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. It can also evict your tenant for a continuing breach of the bylaws.
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