Am I Supposed To Read The Strata Documents When I Buy A Condo?
Rental Disclosure Statement, Form B, Strata Plan, what’s that?
Are you confused with all the documents and just want someone to tell you what to look for?
When I first entered the real estate industry, I quickly realized that there’s a tonne of reading to go through when it comes to strata documents. After doing this for years and reading hundreds of pages of meeting minutes, depreciation reports, strata plans, rental disclosure statements, Form B’s, bylaws, engineering reports, etc… it’s become pretty standard for me to go through the documents.
However, I can only imagine how my clients feel when I email them the stack of documents.
What is this?
I’ve to read ALL THIS???
What do I have to look for?
I don’t know what they’re talking about.
That’s why you have a Realtor to help you. You are responsible for reading the strata documents and if you don’t understand any parts of it, you ask your Realtor who SHOULD HAVE read the documents as well. I don’t know about others, but I ALWAYS read the strata documents. I hear from clients who’ve worked with other Realtors that many don’t read the strata documents and that’s unfortunate.
Let me briefly outline a few documents that you need to read and briefly explain what you should pay attention to.
You want to read the meeting minutes of the regular meetings that the strata council holds. Here is where you get to find out the “complex gossip”. Are there some awful tenants? Are people throwing things off the balcony? What kind of bylaw contraventions are owners or tenants in the building doing? What kind of new issues are the strata council addressing?
Annual General Meeting Minutes (AGM):
This meeting is where votes are taken to decide on changing bylaws, deciding on special levies, etc… Ideally, owners should be attending the AGM in order to vote. Owners of the units will receive a notice prior to the actual AGM to find out what issues will be discussed and voted on during the meeting.
This form is filled out by the property manager and it lays out what the unit’s strata fees are, the building’s contingency fund, whether the unit owes money to the strata, what the parking space and storage locker are if there are any. This is a MUST READ. Lenders will definitely want to look at this before considering whether to lend money to a potential buyer.
This document outlines the strata bylaws for the complex. It’s good to read this to see if they allow pets and rentals. The bylaws also include what rules the complex has and what the consequences are for breaking the rules.
This legal document is a building plan that the developer submitted to the city hall to be approved before building the complex. Buyers can see how large their particular strata lot is designed to be but note that when the unit is completed, there may be slight differences in the measurements and dimensions due to minor changes when the developer is actually constructing the complex.
Every new building or complex has a 2 – 5 – 10 year warranty and after each milestone, strata councils hire an engineering company to do a report on the building to see what the condition of the building is. If there are certain deficiencies that the developer is responsible for, the strata council would point this out and require the developer to make the repairs.
Mandated by law at the end of 2013, this report is done by an engineering company to assess whether the financing structure that the strata council has in place will be able to cover the future expenses needed to maintain the building. The engineering company comes out and basically analyzes the condition of the entire building and provides funding recommendations for the strata council so that they can meet their future anticipated liabilities.
There’s a lot more I can cover, but hopefully the above covers some basics. Feel free to contact me for a more comprehensive explanation on this topic.