Have you ever felt overwhelmed looking through strata documents? In my opinion when buying into a strata property the most daunting task for a buyer is reading the strata documents and understanding them. There's usually hundreds of pages to go through including the Form B, Meeting Minutes, Annual General Meeting (AGM) Minutes, Special General Meeting (SGM) Minutes, Strata Plan, Depreciation Report, Financial Statements, Bylaws/Rules, and don't forget about the Title Search and Property Disclosure Statement.
I'm hoping this blog post will give you some clarity and guidance next time you are reviewing strata documents.
First you need to block off at least a couple hours, and a glass of wine usually helps!
If you haven't seen a Title Search before it is common for the property to have covenants and easements, they can be from the city, hydro, air space, etc. It's important to cross reference and confirm that the P.I.D. number is the same on the Title Search and listing sheet. I always verify that the sellers are actually the owners of the strata lot and if there are any charges or liens against the property.
Property Disclosure Statement:
The Seller fills out this document to the best of their knowledge. It's important to review in case, for example, the seller discloses that they did an upgrade in their unit without the proper permits and without strata’s approval.
It's important to check the Form B for up to date information regarding Strata Fees, amount in the Contingency Reserve Fund, total rented units, Parking/Storage Locker allocated to Strata Lot and most importantly if the Strata lot owes any money to the Strata Corporation. Check if they strata corporation is currently involved in any court proceedings or arbitration. If yes, that property could be flagged by CMHC and require 20% down.
Make a list of what's important to you:
Barbeques on the patio?
Confirmed that there are no Minutes missing and check if the strata council is proactive if a problem arises. There is normally 2 years of minutes for review and it's important to check from meeting to meeting how long it takes them to resolve any new business. Check if there's been any special levies or strata fee raises. Another important one for those rule breakers out there is how easily they fine owners for infractions, do they give you a couple warnings or just give you a fine.
The Depreciation Report gives you an idea of any maintenance or repairs forecasted in the years to come. The Financial Report breaks down the strata’s operating cost, contingency reserve fund, insurance and year to date surplus.
Have a question? Give me a call 778.988.7487