| Is Strata or
Condominium living for you? |
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Are you ready to live
in a community where you don’t have total
control over your own dwelling?
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Are you comfortable in a place
where decisions are made
democratically and you may not always get your way?
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Are you willing to cooperate and
help in the running of the
this small community?
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Are
you willing to share the cost of maintaining the common property
(gardens, roadways, building exterior, parking ares etc.) with your
fellow owners?
|
If
you would be comfortable living in this kind of
community, here are some key questions to ask BeforeYouBuyACondo
or strata property.
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|
Note:
The ideas
presented here are
directed at potential owners in
British Columbia, Canada, however the concepts are
applicable to condominium and strata property
buyers everywhere.
In British Columbia "condominiums" are referred to as "stratas"
|
| 1. Bylaws and
Rules |
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What do the bylaws and rules
say?
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Do they contain any
restrictions (such as no pets, no
rentals, age restrictions) that would significantly impact or interfere
with
your enjoyment in living there?
-
Do they contain any
restrictions that would significantly
enhance your enjoyment in living there?
(The owners' bylaws and rules apply
to all owners and cannot be
ignored. Violators are subject to legal action undertaken by the strata
corporation
to enforce the bylaws. If you cannot live with a bylaw do not buy a
unit in the
strata. Do not expect to “get away” with violating a bylaw or having
the bylaw
changed to accommodate you.)
|
| 2. Finances |
- How much money is in the strata
corporation’s reserve fund?
- Is it enough to repair or
replace common property
without a major special levy?
(The strata
corporation is responsible for managing common
property and common assets. These require regular maintenance and,
sometimes, major
repairs (e.g. roofing replacement). If the strata corporation does not
have a
contingency reserve fund sufficient to pay for major repairs, it must
make a
special levy on each strata unit including the one you are considering.
An
inadequate reserve fund could mean an unexpected cost to you.)
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| 3. Legal |
- Is the strata corporation involved
in any lawsuits?
(If the strata corporation is involved in a
lawsuit and the
outcome later turns out to be unfavorable for the strata corporation,
it could
result in costs to each strata unit owner, including you. If there is a
lawsuit, find out the worst case scenario for the strata owner and
determine
whether you can afford the cost.)
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| 4.
Monthly
Fees |
- How much is the monthly strata
fee?
- What does it pay for?
- What does it not pay for?
(Monthly strata fees can be a
significant cost of home
ownership. In some strata developments the fee covers some utility
costs whereas
in others it does not cover any. Be aware of what the fee does cover
and what additional
costs of ownership you may incur, such as utilities. Understand that
fees will increase
as costs rise. Also, note that new stratas often have very low monthly
fees, partly as an inducement to buy)
|
| 5. Insurance |
- What
insurance does the strata corporation carry for
property damage and liability?
(A strata corporation is required
under British Columbia's Strata Property
Act to carry insurance on its property and fixtures as well as
liability
insurance for property damage and bodily injury. Generally, this
coverage does
not apply to the contents of a strata unit or a building on a strata
lot in a
bare land strata. As a purchaser of a strata unit you must insure your
own
property. A strata corporation is also subject to liability for errors
and
omissions of strata council members and may carry insurance against
this type
of liability but is not required to do so. If the strata corporation
has a court
judgment made against it and there is no insurance to cover it, as a
strata
owner you will be liable for a share of the costs of this judgment.)
|
| 6. Strata
Council Meetings |
- Are the strata council meetings
open to strata owners to attend?
(Under the Standard
Bylaws of British Columbia's
Strata Property Act, a
strata owner may attend a strata council meeting as an observer. This
helps
ensure transparency in the operation of the strata corporation.
However, the
bylaws of some strata corporations have been amended to exclude this
provision.)
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| 7. Contracts |
- What long-term contracts is the
strata corporation a party to and what do they obligate the strata
corporation to do?
(Some stratas have
entered into long-term contracts for the
supply of certain services to the strata (e.g. sewage services to a
bare land
strata). In some cases the developer entered into the contract on
behalf of the
strata corporation before its first Annual General Meeting. Where there
is such
a contract, you should ensure that the contract is currently in the
best
interests of the strata owners and decide whether you want to pay the
costs an owner
is legally obligated to pay.)
|
| 8. Future
Construction (Phased Development) |
- Is the strata lot part of a phased
development which is yet to be completed?
(If the strata lot is
part of an incomplete phased
development, you should be aware that future phases may not be
developed in the
way they are being represented to you.)
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| 9. Legal
Structure |
- What is a condominium or strata
corporation?
(Condominiums or strata
corporations are nonprofit
corporations where property owners have shared ownership of property
rights and
obligations. The legal framework for them in British Columbia is the Strata Property Act.
They are
communities with what is essentially an extra level of government. The
extra
level of government is the strata council, which manages the day-to-day
operation of the strata corporation.) |
| 10.
Management Companies |
- Is the strata corporation managed
by a licensed professional
strata manager or is it managed directly by a council elected by the
owners?
(The quality of
management of the strata corporation largely depends upon
the skills of those doing the managing. As volunteers, strata council
members
may or may not have all the management skills required to meet your
expectations. Similarly, not all professional strata managers are
equally
skilled. Reading minutes of past council meetings and conversing with
the
professional strata manager (if there is one) can reveal a lot about
the state
of management of the strata)
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