Contact Us Licensee Login

Professional Standards Manual

Trading Services

5. Strata Sales

(b) Obtaining Information View Entire Section

(i) Strata Documents View SubSection
(3) Additional Strata Corporation Documents

It has long been recognized that the information on the Form B is far from sufficient for a buyer. The Form B does not attach minutes, financial statements, bylaws and other documents that a buyer wishes to review. However, the only documents that a buyer is entitled to obtain are the Form B and Form F. As a result, the right of an owner, the seller, to obtain documents from a strata corporation has often been used to obtain the documents such as minutes and financial statements for the benefit of the buyer.

The Strata Property Act requires strata corporations to maintain and retain certain documents including minutes of annual and special general meeting and council meetings, a list of council members, books of account showing money received and spent, budgets and financial statements, correspondence received and sent, written contracts including insurance policies, warranties, the registered strata plan, court and arbitrator’s decisions, engineering and depreciation reports. Many of these documents will be relevant to a prospective purchaser. The length of time that the various documents must be retained is set out in the Strata Property Regulation.

The Strata Property Act permits owners, certain tenants, or any person authorized in writing by an owner, access to all of the records and documents that the strata corporation must prepare and keep under the Strata Property Act that relate to the period during which the owner or tenant was an owner or tenant.

The common practice for listing licensees to obtain strata corporation documents that are available only to an owner is to be authorized by the owner in order to obtain them from the strata corporation.

The Council has provided licensees with an authorization form entitled “Authorization to Agent to Obtain Strata Documentation” to be signed by an owner that a licensee may present to the strata corporation as evidence of their authorization to obtain the strata corporation’s documents. Additionally, clause 1(B)(i) of the Multiple Listing Contract also contains authority for the listing licensee to obtain information about the listed property from other sources, including a strata corporation. A buyer can then request that copies of the documents be provided as a condition of the contract of purchase and sale. To enable buyers to receive and review the strata corporation documents, selling licensees generally include a subject clause in the contract of purchase and sale requiring the production of various strata documents such as the Form B, current bylaws, registered strata plan, minutes of general and strata council meetings, financial statements, and engineering reports, if any. The buyer can receive only those documents that an owner is entitled to receive. Unless a buyer is specifically authorized by the owner to obtain documents from the strata corporation, a buyer cannot request these documents other than a Form B or Form F directly.

The selling licensee should ensure that all documents that were requested have been made available and that, if some of the documents are not included, an explanation that is acceptable to the buyer has been provided as to why a particular document has not been supplied.    

Of particular concern will be the failure to produce engineering or depreciation reports that the strata corporation has obtained. In some cases, a strata council may be unwilling to release a depreciation or an engineering report because it has not had an opportunity to fully consider the report or alternatively because it believes a second opinion should be obtained. Whether such reasons are valid and properly justify the withholding of the report will not be known. In practical terms however, if a strata council is not willing to release the report, the only means for a buyer to obtain the depreciation report or an owner to obtain a depreciation or engineering report is to apply to the Court for an order that the report be released and provided to the buyer or owner. In the case of a buyer seeking this information, such a solution is impractical and unlikely.

Buyer’s agents who are advised that the strata corporation’s reports will not be provided, should warn their buyers in writing of the risks of proceeding with the purchase of a strata lot when such information is not available and should encourage the buyer to obtain legal advice.

(i) Documents to Request and their Significance

Licensees should obtain a copy of the following documents, in addition to the Form B that is discussed above, at the time of listing a strata lot. This can be achieved by obtaining written authority from the seller as discussed above.

(This is an opportunity for licensees to negotiate who will be responsible for the cost of obtaining these documents.)

  • minutes — 24 months’ minimum — strata council meetings, annual general meeting(s), special general meeting(s), and meetings of the executive or the members of any section to which the strata lot belongs. Request written verification from the strata property manager, the strata council or, if a section exists, the executive of the section, that the information received represents complete copies of minutes requested;
  • current bylaws of the strata corporation and any section to which the strata lot belongs;
  • current financial statements of the strata corporation and any section to which the strata lot belongs;
  • the registered strata plan, any amendments, and any resolutions dealing with changes to common property. It is recommended that the listing licensee obtain the strata plan from the Land Title Office prior to listing the strata lot. The strata plan is necessary to identify the features associated with the strata lot, such as balconies and decks, and their designation. The strata plan also indicates the area of the strata lot and the designation of parking and storage. The strata plan can then be provided to the buyer with the other documents requested. If the licensee choses to obtain a copy of the strata plan from the strata corporation, the licensee should ensure that the strata plan obtained is a copy of the registered strata plan and not a copy of the unregistered strata plan that was included in the developer’s disclosure statement;
  • information about any additional fees charged by the strata corporation, over and above the monthly strata fee, for parking, storage or other features;
  • information regarding any building warranty that may be applicable;
  • municipal occupancy permits and/or final inspection permit;
  • correspondence to owners from the strata council over the last 12 months;
  • copy of the strata corporation’s insurance cover note. The insurance cover note should be used to identify the insurance deductible that the strata corporation must pay in the event of various losses caused by events such as fire or water escape. If a deductible is high, particularly for water escape, a buyer should be encouraged to make further inquiries of the seller as to the number of claims that have been made and the reason for the claims;
  • building envelope inspection reports, engineering reports or remediation reports, if any; and
  • legal opinions, if any.

Licensees should use a checklist coversheet, in duplicate, when providing a copy of the above-noted documents to interested buyers or their agents. The checklist coversheet should include the following information:

  • a description of each document included (e.g., minutes of the meetings of the strata council with meeting dates noted);
  • the dates the documents were received by the listing agent (to confirm the point in time at which the information is current);
  • the source of each document (e.g., the strata corporation, its strata manager, the Land Title Office, etc.);
  • a statement that if the person to whom the documents are provided is concerned about the currency of the information provided, or any matters contained within the information provided, they should seek independent verification and/or advice.

A sample checklist coversheet, called the “Receipt of Strata Corporation Documentation Form” can be downloaded from the Council’s Forms webpage. With this checklist coversheet in duplicate, licensees should have the person receiving the information acknowledge receipt in writing on the top copy, including the date the information is received. The top copy can then be retained by the licensee as a record of what information was provided to whom on what date. The second copy should be provided, along with the documents, to the person who has requested the information.

(ii) Distribution of Strata Documents

Authorization to Licensee to Obtain Strata Documentation

Authorization to Licensee to Deliver Strata Documentation

As set out above, generally, an owner authorizes the listing licensee to obtain strata corporation documents either by using the authorization form provided by the Council entitled Authorization To Licensee to Obtain Strata Documentation or by relying on clause 1(B)(i) of the Multiple Listing Contract which contains authority for the listing licensee to obtain information about the listed property from other sources, including a strata corporation.

Once a licensee has obtained the documents from the strata corporation, how a licensee uses or distributes the documents is determined by the instructions provided to the licensee by the owner of the strata lot.

The Council has also provided licensees with a form entitled Authorization to Licensee to Deliver Strata Documents. The form sets out the owner’s instructions to the licensee regarding the use and distribution of the documents obtained from a strata corporation. The authorization provides the licensee with the permission to deliver the strata documents and records to “a prospective buyer or buyer’s agent.”

The Council has interpreted the phrase “a prospective buyer or buyer’s agent” to mean purchasers or their agents who are specifically interested in purchasing the seller’s strata lot. The phrase cannot be interpreted to mean the “world at large” or, put another way, anyone who is surfing the internet and clicks on the licensee’s website.

The Multiple Listing Contract contains an authorization in clause 11(A) in which the seller agrees that the documents obtained by the listing licensee can be disclosed to, among others, persons interested in the property, including prospective buyers and their agents. The authorization contained in the Multiple Listing Contract is significantly broader than the authorization contained in the Council’s authorization form.

The authorization being relied on will determine how the licensee may distribute the strata corporation documents.

If a licensee wishes to post the documents on a website in order to make the documents available to any person who may wish to view them, the licensee should ensure that they have the appropriate authorization, such as that contained in clause 11(A) of the Multiple Listing Contract, from the owner. A licensee who makes strata corporation minutes and documents available on a website based only on the authorization form available from the Council could be found to have failed to follow their client’s instructions if their client complains to the Council about too broad a circulation of the documents.

The further question that arises is whether an owner is entitled to authorize a licensee to make strata documents available to the public at large. Some licensees have argued that the Strata Property Act does not contain any restrictions on the use of the documents once they have been provided by the strata corporation. This view is correct. The Strata Property Act does not contain restrictions on how the documents can be used. However, the strata corporation may choose to impose such restrictions.

Licensees have also suggested that the documents obtained from the strata corporation belong to the owner and the owner is entitled to authorize their release. In fact, the documents, such as minutes, budgets, financial statements, engineering reports and legal opinions, belong to the strata corporation, not an owner. The strata corporation may wish to restrict how its documents could be used and disseminated.

For this reason, a licensee who wishes to rely on the authorization to distribute documents as set out in the Multiple Listing Contract should point out clause 11(A) to the owner and advise how the licensee intends to distribute the information. Before agreeing to such distribution, the owner or, if directed to do so by the owner, the licensee should confirm that the strata corporation has not imposed any restrictions on the manner in which strata documents can be distributed.

Licensees should recognize that simply being provided with strata corporation documents does not entitle the licensee to distribute the documents in a manner other than as directed by their client.

 

(iii) Time to Obtain Strata Documents and the Fees Charged

If documents are requested to be provided in accordance with the timeframe set by the Strata Property Act, the Regulation establishes the maximum amount that can be charged.

Sections 36(3) and 59(1) of the Strata Property Act and section 25 of the Interpretation Act effectively give the strata corporation eight days, following receipt of a request, to deliver a Form B, the bylaws and rules and up to 15 days following receipt of a request to provide copies of the other records maintained by the strata corporation. Under the Strata Property Act, unless a request for documents is personally presented to a strata council member, the strata corporation is deemed not to have received the request for 4 days. Therefore the 8 and 15 day periods do not start until 4 days after the request was faxed, mailed or emailed to the strata corporation or strata manager.

The Regulation sets the maximum fee that a strata corporation may charge for providing a copy of a record or document and the fees for providing a Form B and a Form F.

The maximum fee that a strata corporation may charge for providing a copy of a record or document prescribed under section 35 of the Strata Property Act is 25¢ per page. The maximum fee for a Form B including the required attachments is $35, plus the cost of photocopying, or other means of reproduction, at no more than 25¢ per page and the maximum fee for a Form F is $15. (These rates are subject to change by regulation.) The fees are applicable if the documents are requested to be provided in the time frames as set out above. The Regulation prohibits any charge to an owner, or his or her authorized delegate, for inspecting the strata corporation’s records.

While the Strata Property Act and the Regulation establish both maximum time frames and maximum fees to be charged for providing copies of a strata corporation’s records, the legislation is silent on whether additional fees may be charged for providing these records in a shorter time period than the maximum allowed.

When strata corporations, or strata managers acting on their behalf, are requested to provide documents sooner than stipulated by the legislation, licensees should be aware that some may charge additional fees.

When drafting offers that include obtaining documents for review by a prospective buyer, licensees should recommend a subject removal date that allows enough time for the strata corporation or strata manager to respond to a request and for buyers to review those documents.

(iv) Seller’s Liability

Often buyers will request copies of reports not knowing whether the report exists. If no report is then provided the buyer believes that no report was ever commissioned or obtained.

It is important for a seller to recognize that the request for documentation in the contract of purchase and sale obligates the seller to produce the documents requested. A request for all reports is simply that, all reports. If the seller is aware that certain reports exist, but does not ensure that they are provided to the buyer as part of the buyer’s request for documentation, the seller may be liable to the buyer for failing to provide the requested documents. Notwithstanding that the documents are generally provided by the strata corporation, the seller and seller’s agent should ensure that the documents provided to the buyer fully satisfy the buyer’s request.

It is obvious that a seller cannot be held liable for the reports if the strata council has failed to advise owners that a report has been commissioned or received. In those cases, the strata council may have failed in its duties to act honestly, in good faith and in the best interests of the strata corporation, and may be liable to the owners including the buyer.

(v) Role of the Strata Manager

Listing and selling agents sometimes seek information about a strata lot or a strata development from a strata manager. Licensees should keep in mind that a strata manager is not the agent of the seller but is an agent of the strata corporation. The strata manager’s duties are set out in the contract between the brokerage and the strata corporation and, generally, include carrying out many of the strata corporation’s duties such as maintaining the books and records and managing the day to day activities of the strata corporation.

When documents are requested from the strata corporation they are often requested from the strata manager. It is important for licensees to appreciate that the strata manager is merely stepping into the shoes of the strata corporation and has no separate duties to make disclosure other than assisting the strata corporation in fulfilling its obligations. Licensees should appreciate that in carrying out their duties to the strata corporation, a strata manager may only act within the scope of authority as set out in the contract between the strata corporation and the brokerage providing strata management services. In other words, when obtaining documents from the strata corporation, the strata corporation must comply with the Strata Property Act and the strata manager has no ability to act in a manner other than as permitted by the Strata Property Act and as directed by the strata council. The strata manager, for example, cannot release documents such as meeting minutes or financial statements to a party other than an owner, certain tenants or person authorized in writing by an owner or certain tenants. Additionally, the strata manager cannot provide his or her opinion on the likelihood of a future special levy or the need for repairs. Such information is only available to owners and prospective buyers through the minutes and other records of the strata corporation. If, for example, a buyer wishes to determine what the bylaws contain, it is appropriate to obtain and review a copy of the bylaws. Asking the strata manager for information about what is contained in the bylaws is inappropriate and may result in misinformation to a buyer if the strata manager provides information that is incorrect. Additionally, asking the strata manager for his or her opinion on the state of repair of the building, the competency of its strata council, or any other such matter is also inappropriate.