Strata Property: What You Need to Know

When buying real estate, particularly in urban centers like Greater Vancouver, you may encounter various types of strata properties. Strata ownership is common for condos, townhomes, and even detached homes on stratified land. Understanding the ins and outs of strata living is crucial for making an informed decision. In this blog, we’ll explore the key aspects of buying a strata property, including strata fees, strata corporations, strata councils, and common property.

What is a Strata Property?

A strata property refers to a form of ownership where individuals own their unit (such as a condo or townhome) while sharing ownership of common property and assets with other owners in the complex. This shared ownership structure is governed by a strata corporation, which is responsible for managing the strata development and ensuring the smooth operation of shared facilities.

Types of Strata Properties

1. Condos: These are multi-unit buildings where each unit is individually owned, and the common areas, such as lobbies, elevators, and recreational facilities, are shared among all owners.
2. Townhomes: Typically multi-story units with their own entrances, townhomes often share walls with neighboring units. They offer a blend of single-family home like living with the benefits of shared amenities.
3. Detached Homes on Strata Land (Bare Land Strata): Some single-family homes are part of a strata development, meaning that while you own your house and the land it sits on, certain areas (like roads or parks) and sometimes service infrastructure (like water supply or waste disposal)  are considered common property and managed by the strata corporation.

Strata Fees: What Do They Cover?

Strata fees are monthly contributions made by each unit owner to cover the costs of maintaining and managing the common property and shared assets. These fees can vary widely depending on the size of the strata development and the amenities offered. Typical expenses covered by strata fees include:

• Building Maintenance and Repairs: Routine maintenance and unexpected repairs to common areas like hallways, roofs, and exterior walls.
• Utilities: Common utilities such as water, garbage collection, and sometimes natural gas or electricity for shared spaces.
• Insurance: Building insurance that covers the common property, including liability insurance for the strata corporation.
• Amenities: Maintenance and operation of shared amenities like gyms, pools, gardens, and recreation rooms.
• Contingency Reserve Fund: A portion of the strata fees is allocated to a reserve fund for future major repairs and replacements, such as roof replacement or elevator upgrades.

Strata Corporations and Strata Councils

When you purchase a strata property, you automatically become a voting member of the strata corporation, which is a legal entity responsible for managing the strata development. The strata corporation is governed by a strata council, a group of elected owners who make day to day operational decisions on behalf of all owners.

• Strata Corporation: The strata corporation is responsible for the maintenance, repair, and insurance of common property. It enforces the bylaws and rules of the strata and handles the financial management of the strata fees.
• Strata Council: The strata council acts as the executive body (like a board of directors) of the strata corporation. Council members are elected by the owners at the annual general meeting (AGM). Their responsibilities include overseeing daily operations, approving expenditures, addressing maintenance issues, and ensuring the bylaws are followed.

Common Property: What Does it Include?

Common property refers to areas within the strata development that are shared by all owners. This can include:

• Hallways and Corridors: Interior spaces that connect individual units.
• Amenities: Shared facilities like swimming pools, gyms, party rooms, and outdoor spaces.
• Building Exterior: Roofs, exterior walls, windows, and foundations.
• Landscaping: Gardens, lawns, and pathways within the development.
• Parking and Storage: Designated parking spots, visitor parking, and storage areas.

As an owner, you have a stake in the common property, which means you share both the benefits and responsibilities that come with it.

Important Considerations When Buying a Strata Property

1. Review Strata Documents: Before purchasing a strata property, thoroughly review at least the most recent 2 years of the strata documents, including the bylaws, rules, financial statements, minutes from strata council meetings, any engineering reports done and the depreciation report. These documents provide valuable insight into the management, maintenance and financial health of the strata corporation.
2. Understand the Bylaws and Rules: Strata properties come with specific bylaws and rules that govern everything from noise levels to pet ownership and renovations. Ensure you’re comfortable with these regulations before committing to purhcase.
3. Assess the Strata Fees: Compare strata fees across different properties and understand what is included. Higher fees might indicate extensive amenities or significant upcoming maintenance projects, while lower fees could mean fewer amenities or less comprehensive maintenance. Lower isn’t always better.
4. Contingency Reserve Fund: Check the balance of the contingency reserve fund to ensure it’s sufficient to cover major repairs and replacements and that there is enough contributed to the fund annually to cover expected future costs outlined in the depreciation report. A healthy reserve fund is a sign of a well-managed strata.
5. Strata Council Dynamics: The effectiveness of a strata council can significantly impact your experience as an owner. Active, engaged councils typically manage strata properties better, ensuring timely maintenance and prudent financial management.

Conclusion

Buying a strata property offers a unique blend of homeownership with shared responsibility for common property and amenities. Whether you’re considering a condo, townhome, or detached home on strata land, it’s essential to understand the role of strata fees, the strata corporation, the strata council, and the implications of shared ownership. By doing your due diligence and thoroughly reviewing strata documents, you can ensure that your investment is well-managed and aligns with your lifestyle preferences.

For more personalized advice or to explore strata properties in Greater Vancouver and surrounding areas, connect with nest Real Estate Group today. Our team of experts is here to guide you through every step of the buying process, ensuring you find the perfect property that meets your needs and budget.