Strata Information
The Strata Lot
A condominium unit is legally described as a "strata lot" and all the units (strata lots) comprise the "strata corporation". The strata corporation's members are all of the owners (collectively) of the strata lots. These strata corporations are registered as "strata plans". All new strata plans are now registered under an LMS-number. The expression "strata" comes from New South Wales, Australia, the origin of our legislation in 1996.) in 1980, the BC government changed the name of the Act from Strata Titles Act to the Condominium Act. In 2000, the act was renamed the "Strata Property Act".
Owner Versus Strata Responsibilities
Many owners ask the question "what are mine and the strata's responsibilities?" The simple answer is that the strata is responsible for anything that goes wrong outside of your suite. There are some exceptions to this rule, particularly because of the wording and application of the Strata Property Act. For example, windows and suite doors are an owners responsibility; however the strata corporation has insurance that covers broken glass (confused yet?). So, if your suite experienced a broken window, you can claim this expense on the strata's insurance and you will only be responsible for the deductible portion of the claim – usually $500.
Strangely enough, if a water supply tube to your bathroom facilities breaks it is considered an owner responsibility because the pipe is not located "behind the wall" and does not service more than one strata lot. This expression is commonly used to delineate the boundary of responsibilities. As well, the owner would be responsible for all collateral water damage as a result. But again the strata's insurance would cover the damage and the owner would only be responsible for the deductible.
The Law
The strata corporation is governed by the Strata Property Act of British Columbia, a provincial statute, and also by the by-laws of each strata corporation which must be filed in the respective Land Title Office. By-Laws are enforceable by the strata council, and amendments to the by-laws are made by Special Resolutions (requiring 75% affirmative vote) at General meetings of the owners. Additionally, a strata corporation may also have house rules and regulations (which are not filed at the Land Title Office but which are available from the strata council or management agent. The strata council is mandated to enforce the by-laws and rules and regulations of the strata corporation discretion does not lie with the management company or its agents.
The Council
The strata council is an elected body of up to seven members who are owners of strata lots. Their positions are voluntary and their term of office is for one year and each year, usually just prior to the new budget, there is an Annual General Meeting at which the new council is elected. The council is responsible for the affairs and conduct of the strata corporation.
The Management
The management company is under contract to the strata corporation to provide accounting and management services. All communication between the council and owners is done through the council. It is important to remember that the strata council makes policy decisions.
The Budget
Every strata plan operates on an annual budget. This budget is prepared by the agent and the council and submitted to the owners for approval at the Annual General Meeting. The Budget provides monies required to insure, manage, clean, repair and maintain all common property of the strata corporation. An additional amount is also added to the budget to fund the Contingency Reserve Fund. This reserve is required by law to provide money for emergencies or non-annual major expenses.
The budget of a strata plan does not provide for any profit. Essentially, the revenue matches expenses, and if there is any shortfall the council may add the deficit to the next budget or even call upon the owners for a "special assessment".
In cases where the developer finishes constructing the building and turns over the control and management of the building to the owners, the budget included in the disclosure statement becomes the current budget. In many cases, the developer tries to anticipate the costs but for various reasons these "guesses" are often short of the actual expenses. Therefore, the owners find themselves adjusting the budget at subsequent general meetings.
Monthly Strata Fees
Each owner is required to pay to the strata corporation their monthly assessment based on the budget. The Act provides a formula, which is called "unit entitlement" – generally a ratio of the square footage of each unit compared to the square footage of all the strata lots.
Maintenance fees (contributions) of owners are usually due on the first day of each month and most strata councils impose fines for late or non-payment. If an owner does not pay their fees, the strata council can add a lien to the tide of the unit, thus preventing any sale or re-mortgage.