February 17, 2023
What To Look For When Reading Strata Docs
Living in a Strata titled property comes with certain rules, obligations and other ownership considerations regarding what an owner can do and what they may be required to do. If you are contemplating the purchase of a Strata unit (apartment or townhome), there are several things to look for when reviewing the documents.
Bylaws govern how the Strata Corporation operates and provide for how the strata corporation will be managed and administered. Bylaws are critical (and mandatory) for any Strata Corporation as they detail how the Corporation will be managed.
Bylaws also deals with how the individual strata units and common property are governed. Any Bylaw changes must be voted on by the strata lot owners before they can be implemented and most require the approval of ¾ of those owners.
Examples of Bylaws include pet restrictions, age restrictions, restrictions on the use of barbecues, what type of window coverings are acceptable or short-term rental restrictions
2- Rules And Regulations
Rules and regulations only deal with the common property or common assets of the Strata Corporation and do not address any issues relating to individual Strata Lots. For example, rules can be implemented regarding quiet times in the building, pets must be leashed in common areas, or what can be placed outside your unit on common area property. Rules can be implemented at any time by the Strata Council but must be ratified at the next Annual General Meeting in order to be effective on an ongoing basis.
Typically, when considering the purchase of a Strata Unit, you should ask to review the minutes for the previous two (2) years. These minutes give you information relating to any issues raised by unit owners relating to the operation of the property overall, the financial position of the Strata Corporation and any other potential “red flags” such as ongoing lawsuits or maintenance concerns or problems. Minutes are a great way to get to know the “day to day” issues of the Strata.
Reviewing the financial statements and budget is important when considering the purchase of a Strata Lot. Because you’ll pay strata fees, it’s vital to understand what the Strata’s financial commitments are and how the expenses are funded. Are any large expenditures anticipated, are there any Special Levies or Assessments planned or anticipated, how much is in the Contingency Reserve Fund and how is the Depreciation Report being addressed?
Special levies or assessments can be large single contributions required by each unit owner which can be cumbersome, depending on what project the funds are allocated to. If you are on a budget, additional expenses beyond the normal strata fee requirement may be a factor in your decision so make sure you understand what those may be.
Owning a Strata Unit can be a terrific solution for those who don’t want the responsibilities of owning their own freestanding home. Outside and common area maintenance is taken care of for you and your only responsibility, for the most part, is for the inside of your own unit.
Everyone from retirees to first-time buyers and young people starting out can enjoy the benefits of living in a Strata property. For those who travel, it’s a great way to lock up and go without worry. The trade-off is the potential limitations of the Bylaws and Rules. If you can live with those, a Strata may be just right for you.
Whatever phase of life you’re in, or whatever age you are, Strata life should be carefully considered before you buy. If after reviewing all of the above items, it seems like it fits your lifestyle, give us a call at One Flat Fee and we’ll be happy to assist.