Buying a condo or other strata housing

Strata refers to a building or complex of buildings containing a number of individually owned units. The owners own their individual strata lots. Together, the strata owners own and use the common property as a strata corporation. 

More than high-rise condos

It’s not the size or shape of a development that makes it a strata. Instead, it’s the legal structure used. If a development is legally created by a strata plan, it’s a strata. Strata housing can also include duplexes, townhouses, and even single-family homes. 

The law that applies

In BC, the Strata Property Act is the main law governing stratas. Under this law, a strata corporation is created when a strata plan is registered with the land title office. A strata plan shows the boundaries of each strata lot and the common property. An owner’s strata lot is typically their private dwelling space.

Owners of the individual strata lots are members of the strata corporation. Together, they own the common property and pay for common expenses. 

Some apartments, townhouses, and duplexes operate under various other legal structures. Examples include housing co-operatives, privately-owned rental buildings, or duplexes on a single title. This also occurs on First Nations reserve lands, where provincial property laws don’t apply. 

Strata developments can be either freehold or leasehold. In a freehold development, people own their strata lots. 

In a leasehold development, it’s the landlord that owns the property. You pay the landlord for a leasehold interest in a strata lot, for a specific term. You would then be registered on title as a long-term tenant. You must pay the monthly strata fees and any other contributions. You can also sell your leasehold interest to someone else. 

Elsewhere, we cover key factors to consider when buying any type of home. These include making an offer to purchase, adding conditions, financing, and more. 

Here, we explain considerations specific to buying a unit in a strata complex.

Buying into a strata adds a layer of complexity. There are additional documents you should review carefully. What you discover may sway your decision to buy, or not. To start, make sure to review the following documents before making an offer. (Alternatively, you could make any offer subject to reviewing these documents.)

• Ask the strata corporation to provide a form B information certificate. It sets out crucial information about the strata corporation and the strata lot being sold. Here’s what should be disclosed on an information certificate.  

• The title to the strata lot can reveal limitations on the use of the strata lot. It might indicate charges that may affect the lot’s value. 

• The strata bylaws set out owners’ rights and obligations. Look carefully for any restrictions that may impact you.

• A strata corporation’s rules set out how common property and common assets can be used. Look for whether they restrict activities that are important to you. 

• Review past minutes of meetings of the strata council, and general meetings of the owners. These can give you a sense of recent issues the strata corporation has been dealing with. Examples include legal issues or expensive repairs coming up. Ask for at least two years of minutes (ideally, ask for more than that).

• Are you looking into a new development? The owner-developer must give prospective first buyers a copy of an up-to-date disclosure statement.

Review the financial statements and the budget of the strata corporation. This will help you assess the strata’s financial situation. And it will give you an idea of what your own financial risks and obligations would be. Consider the following:

• Can you afford the monthly strata fees? These represent an owner’s share of common expenses. Compare the strata fees to other similar developments. 

• What is the unit’s proportionate obligation to cover common costs? You can find your unit entitlement on the strata plan. 

• Is there enough money in the contingency reserve fund to cover the cost of major projects? What special levies and other funds has the strata approved?

• Are there any user fees to use parking or other facilities? 

• What insurance does the strata have? Could you be charged with a high insurance deductible if sources within your strata lot cause damage? 

You will have to pay your share of the cost of keeping the complex in good repair. This is true even if the repairs do not involve your strata lot. Here are some ways you can assess potential risks: 

• Check the form B information certificate for any special levies that have been previously approved. You might have to take on these payments as a new owner. 

• Review the minutes of strata meetings to see if any major repairs have recently been made or are planned. Watch for discussions that might indicate expenses. Typical large expenses include building envelope problems or structural repair concerns. 

• Ask to see the strata corporation’s most recent depreciation report. Review it for any costly replacements, repairs, or upgrades that have been recommended.

When you buy into a strata, you buy into a group of co-owners. Often, these will be your neighbours. A careful review of the minutes can reveal a lot about the strata. You might see noise complaints relating to an adjacent strata lot, very strict enforcement of the bylaws, recurring disputes, poor management, the existence of factions, or other trends which may concern you. 

Buying a strata lot involves risks and pitfalls that a lawyer can help you avoid. Before making an offer to buy strata housing, consider having a lawyer review the critical documents. Or consider adding a condition to your offer saying it’s subject to a lawyer’s review of the strata documents. 

Be wary of non-standard ways of buying a strata. Examples include rent-to-own or time share. Do not sign any agreement without legal advice.