Before talking to your
lawyer about completing your purchase, here are some things to watch for:
What do the bylaws
say? It is important to read the official
bylaws. These are the latest
bylaws as filed at the Land Title Office. Do they allow you to do what you plan to do in the strata unit? Do they
allow pets? Do they allow rentals?
Ask for and read the “Information Certificate” or “Form B” and watch for items that could
lead to future costs to you if you proceed to purchase the strata unit. If you
have a concern about any item, discuss it with your lawyer.
Who manages the
strata? Is it “self-managed”, meaning is it managed by the strata council
directly? Is it managed by a strata property manager licensed by the Real
Estate Council of BC ? If managed by a licensed strata property manager, what
is the reputation or rating of the strata management company? Ask around about
the company or see www.stratawatch.ca
for ratings.
Is the strata unit part of a phased strata development yet to be completed? If so, the plan for
future phases may change from what you see in the marketing literature and you
may later be living in a neighbourhood that differs significantly from what you
expected. Also, the newer phases could well be sharing in the cost of repairs
for the older phases.
Does the strata management firm have an open-ended contract or does it have an
expiry date? Under BC strata law it is very difficult for a strata council to
terminate a contract with a strata management company where there is no expiry
date for that contract. Also, the lack of an expiry date may indicate that the
strata corporation is poorly governed by not ensuring proper control over the
strata manager.
Does the strata have a depreciation
report that tells owners the cost of repairs to common property that may
become necessary in the future? As an owner you will have to pay a share of
these costs. If no such report exists you could be buying into a property with
open-ended costs to you.
What amount does the strata have in its contingency reserve fund? If the amount
in the fund is a lot less than the cost of work to be done according to the
depreciation report you will have to pay a share of the deficiency when it is
time for the work to be done. Again, if no depreciation report exists you could
be buying into a property with open-ended costs.
Is the strata fee low compared with similar strata
properties you have seen? A low strata fee may seem like a good
thing but it may also reflect poor maintenance and an inadequate contingency
reserve fund. When it comes to strata fees you usually get what you pay for.
How are the strata
fees calculated? Is the fee the same for all units in the strata? Do you
think the method of fee calculation is fair?
Does the strata financial
statement comply with the regulations and has it been either audited or
reviewed independently of the person(s) who prepared it? The larger the strata
budget, the more importance to attach to this question.
What property are
you buying? Are you buying a lot or a portion of a building? Is the home
you want actually located on the lot you are buying? In one unusual case,
purchasers discovered after the fact that each of them bought a storage shed on
a small strata lot accompanied by a lease for the property on which their homes
were constructed. Yes, this one “got by” several regulators and conveyance lawyers.
In another case, a purchaser ended up owning the condo apartment next to the
one he had selected.
