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What are BYLAWS of the strata?
Many strata’s create bylaws that are unique to their complex. These bylaws can include things like restrictions on Pets, Noise, Rentals etc. For any restrictions or fines to be adopted, a formal bylaw must be placed on an agenda for an Annual General Meeting or Emergency General Meeting, voted on and passed in the same manner that budgets are approved. Once the bylaw is approved, it is then registered on title. Under the STRATA PROPERTIES ACT, when making an offer, we will ask for a number of things, one of which will be a copy of the current bylaws of the Strata.
What are Rules and Regulations?
Rules and Regulations can be created by the Strata Council without the approval of the general ownership, however, these rules and regulations may only apply to common areas. Examples of this may be, DOGS MUST BE ON A LEASH WHILE ON THE COMMON PROPERTY or RENTERS ARE NOT ALLOWED TO USE THE COMMON ROOM AREA.
What should I look for in the Financial Statements?
We will have a copy of the financial statements from the Strata Corporation. They will give us the general financial health of the complex that you’re buying in. Look for the amount in the contingency reserve fund and also for any additional reserve funds.
What are Special Levies and Contingency Reserves?
On occasion, the Strata complex may encounter an extra-ordinary expense that has not been foreseen, and therefore not included in the annual budget. In these instances, the funds can be raised by a Special Resolution being passed at an Extra-Ordinary Meeting, or if time permits, at the AGM. It’s important to note that funds raised by these levies are due and payable by the owner on the day they are passed. The Contingency Reserve is an amount of money set aside by law to equal not less than 5% of the annual budget.
What is included in Strata Fees?
Strata Fees are monthly assessments that provide the income to maintain the entire common area of the complex in which you have an interest. These fees cover the costs of common area Hydro Charges, Snow Removal, Building Maintenance, Landscaping, Garbage Removal, and Management Fees. Other costs may be included, depending on the particular complex.
What is Unit Entitlement?
The concept of Unit Entitlement serves to allocate ownership of the common property among the owners of the individual strata lots. The unit entitlement of a strata lot indicates the share of its owner in the common property, common facilities, and other assets of the Strata Corporation. It is also the basis for calculating the owner’s contribution to the common expenses or maintenance fees of the Strata Corporation. By this means, each strata lot can be charged a share of the maintenance and repair of the property. The unit entitlement can be calculated by dividing the number of square feet in an owner’s strata lot by the number of square feet in all strata lots.
What is Interest Upon Destruction?
This is not the same thing as Unit Entitlement. Instead, it is based on the value each strata lot bears to the total value of all the lots, instead of a square foot ratio. Where revenues are “POOLED”, the income distribution is determined by the unit’s Interest Upon Destruction. This is a key point when purchasing investment condominiums.
What is a Strata Council?
The Strata Council usually consists of 3 to 7 members who are individual owners of units within the Strata Complex. All owners at the Annual General Meeting elect them. The Council meets from time to time to discuss and resolve issues pertaining to the Strata Complex.
What is an Annual General Meeting?
The AGM is held by law, once every year. It’s purpose is for the owners to review the happenings of the past year, to approve a budget for the coming year, to vote on any Special Resolutions and to elect a new Strata Council to run the affairs of the Strata for the coming year. In your Offer to Purchase, we will ask for a copy of the minutes of the last AGM to learn about the ongoing business of the Strata.
What about Insurance?
The Strata Corporation maintains insurance on the common area of the buildings for fire, flood and miscellaneous damage, as well as “third party liability”. You must arrange your own coverage for your contents. These policies are often referred to as “Condo Contents Packages”.
What types of Rental Systems are there?
Individual Rental– is arranged for your unit only. That means that you receive the revenues, less management fees, only for the time that your specific unit is rented.
Pooled Rental Plans– pool the total revenues received and divide the revenues after management fees, to all owners. In this instance, you will receive revenue even if your unit was not rented. Your share is determined by the Interest upon Destruction amount that is assigned to your strata lot.