Owning a Condominium
Script 401 gives information only, not legal advice. If you have a legal problem or need legal advice, you should speak to a lawyer. For the name of a lawyer to consult, call Lawyer Referral at 604.687.3221 in the lower mainland or 1.800.663.1919 elsewhere in British Columbia.
This script explains several details about owning a condominium (or condo). For information on buying a condo, check script 407, called “Buying a Condominium”.
What is a condominium?
A condominium, or condo, is a strata lot in a strata development. A strata development is a building (or sometimes land) divided into separate parts, called strata lots. This allows for individual ownership of the strata lot. And all strata lot owners together own the common property in a development. Depending on the development, a strata lot may be an apartment, a townhouse, a retail store, a medical office, and so on. In a high-rise strata building, each apartment is a separate strata lot. In this example, the strata scheme allows people to own their apartment.
The words strata and condominium mean the same thing. British Columbia is the only place in North America that uses the word “strata” instead of “condominium”.
It’s not the size or shape of a development that makes it a condominium project. Instead, it’s the legal nature of it. If the development is legally created by a strata plan, it’s a condo project – whether it’s a 300-unit high-rise apartment, a 50-lot bare land strata recreational development, or a 2-unit strata duplex.
Common property and limited common property
Any property in the development that is not part of a strata lot is common property. In a condominium building, typical common property includes hallways, elevators, gardens, recreational amenities, garbage facilities, building security features, and the roof and exterior walls. In addition, some pipes, wires, cables and similar things that carry water and other services within the development may also be common property – even when they’re located in a strata lot.
Strata lot owners automatically own a proportionate interest in the common property, together with all the other strata lot owners in the development. Under the Strata Property Act, strata lot owners own the common property in a type of co-ownership called tenancy in common. Each owner’s proportionate interest in the common property is set out in a table called the Schedule of Unit Entitlement (also called a Form V). Every owner can use the common property, as long as they follow strata laws and the bylaws and rules of the strata development.
Sometimes, common property may be set aside for the use of only certain people. The Strata Property Act allows a strata development to designate an area of common property for the exclusive use of one or more strata lots. This designation is called limited common property (or LCP). For example, in a high-rise strata apartment building, the strata plan may show that a strata lot’s balcony is LCP for that strata lot. This means that the balcony is common property, owned by all the strata lot owners as tenants in common. But the balcony is set aside for the exclusive use of that strata lot owner.
How a strata plan is created
To subdivide a building or land into strata lots and common property, a developer must file a document called a strata plan at the Land Title Office. Filing the strata plan also creates the strata corporation, whose members own the strata lots in the plan. Initially, the developer owns all the strata lots, but usually sells them to members of the public.
Subdividing land instead of a building
The strata scheme may also subdivide land (instead of a building) into strata lots and common property. This is called a bare land strata development because it subdivided land instead of a building. Bare land strata subdivision is a very flexible tool. For example, a developer may create a recreational development where people build cottages on bare land strata lots. All the owners may use the common property in the project, including the roads, and recreational features such as hiking trails, tennis courts, and fitness facilities. Or, a developer may use a bare land strata development to create an industrial park or a manufactured home park or other similar developments.
What is a strata corporation and what does it do?
A strata corporation is automatically created when a developer files a strata plan at the Land Title Office. The strata corporation is, in law, an artificial person that can do everything of a legal nature that a real person can do. For example, a strata corporation may buy services or goods, or sue or be sued. Mainly, the strata corporation oversees the common property and enforces the bylaws. The owners of the strata lots are the members of the strata corporation. And the board of directors is called the strata council.
The strata corporation must manage, repair, and maintain the common property and common assets. When a strata corporation itself owns an item, for example, a lawn mower, that item is a common asset.
Strata lot owners meet periodically in general meetings. The strata corporation must hold at least one general meeting once a year, called the annual general meeting or AGM. At the AGM, members must approve an annual budget and elect a strata council, among other things.
Normally, if a strata development is entirely residential, each strata lot has one vote at a general meeting. In the rare case where the strata plan has been amended to subdivide a strata lot or to combine two or more strata lots, a strata lot may have a fraction of a vote or more than one vote. If so, a document called a schedule of voting rights (Form W) will be filed with the strata plan at the Land Title Office.
If a strata development is entirely non-residential, or it has both residential and non-residential strata lots, a Schedule of Voting Rights will set out the number of votes for each strata lot at a general meeting. Normally, each residential strata lot in that development will have one vote. Each non-residential strata lot may have a number of votes, depending on a formula in the law.
What is the strata council and what does it do?
The strata council is an elected group of strata owners or, in some cases, tenants. It is the board of directors of the strata corporation. Depending on a strata corporation’s bylaws, the strata council usually has 3 to 7 members. It manages the corporation on a daily basis. In larger developments, the strata council may hire a professional management company to help manage the corporation.
The Strata Property Act defines the term owner. Generally, an owner is the person registered on title to the strata lot in the Land Title Office. For example, if a husband and wife together buy a strata lot, but only the wife goes on title at the Land Title Office, then only she is an owner under the Act.
Each year, a strata corporation creates an annual budget. To pay for expenses, the corporation charges proportionate strata fees to each strata lot owner based on the Schedule of Unit Entitlement. To set aside savings for repairs or long-term improvements in the development (for example, a new roof) the strata fees typically include an amount for the contingency reserve fund (the CRF). This is a strata corporation’s mandatory savings account.
If a strata lot owner does not pay the monthly strata fees, the strata corporation may register a lien in the Land Title Office against their strata lot. Ultimately, the strata corporation may ask the court for an order to sell the owner’s strata lot to pay the amount owing under the lien.
The strata corporation must insure the common property, common assets, any buildings shown on the strata plan and certain fixtures. The strata corporation must also carry liability insurance for property damage and bodily injury.
Strata lot owners need their own insurance for their personal property, for improvements to their strata lot, and liability to others for injury.
What law applies to condominiums?
The Strata Property Act controls strata developments in BC. In addition, each strata corporation must have bylaws. They set out strata lot owners’ rights and responsibilities and control what the place will be like to live in. For example, bylaws may restrict the rental of residential strata lots. Bylaws may also restrict pets and certain age groups, such as children. Similarly, bylaws will likely require strata lot owners to get permission before making significant changes to their strata lot, such as moving walls or making plumbing or electrical changes. Bylaws also allow the strata corporation to penalize owners who violate the bylaws.
A strata corporation may also have rules. They apply only to the use and enjoyment of common property and common assets. For example, a rule may limit the size of vehicles that may park in a common-property parkade, or restrict the hours when residents can use a common-property fitness centre.
A strata corporation may change its bylaws and rules at any time.
Renting out a condominium
If you plan to live in your strata lot, you may want the other owners to live in their units too. If so, you may want a strata corporation with a rental-restriction bylaw. But if you are buying a residential strata lot as an investment to rent out, you will not want any rental restrictions. A strata corporation may pass a bylaw that prohibits all residential rentals or limits the number or percentage of residential rentals, so check the bylaws carefully. If you do rent out your residential unit, choose your tenant carefully. The strata corporation can hold you responsible if your tenant breaks a bylaw or rule.
Depending on the legal situation, an owner may be allowed to rent their residential strata lot, despite a rental restriction bylaw. For example, sometimes a document called a rental disclosure statement (Form J) may let an owner rent a residential strata lot despite a rental restriction bylaw. If you plan to rely on a rental disclosure statement to rent out a residential strata lot, first have a lawyer review the document. In some cases, a rental disclosure statement exempts only the first owner of the strata lot from a rental restriction bylaw.
Check script 407, called “Buying a Condominium”.
Check the Strata Property Act available at www.bclaws.ca. Click on “Statutes and Regulations” and then on “S” in the alphabetical list; scroll down to the name of the Act and click on it. You can also get a copy of the Act from Crown Publications in Victoria at 250.387.6409 or toll free at 1.800.663.6105. Its website iswww.crownpub.bc.ca. Some libraries also have copies of BC laws. Make sure you also get a copy of any amendments to the Act and the Regulations.
Study the bylaws and rules for any condo project you are interested in.
The Financial Institutions Commission website – www.fic.gov.bc.ca – has information on the Act: click on “Strata Property.” But this information is not always up to date.
Check the website of the Condominium Home Owners Association of BC at www.choa.bc.ca.
The Condominium Manual by Mike Mangan is available at public libraries. It has a detailed explanation of condos. Its website (www.CondoManual.ca) also has temporary free access.
[updated February 2013]
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