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Professional Standards Manual

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5. Strata Sales

(b) Obtaining Information

(i) General

Both listing and selling licensees have a general duty to be familiar with property they are intending to market. The ability for the strata corporation to control both the use of the common property and the use of the strata lots, and the need for owners to contribute to repairs of common property are two very significant differences when selling strata lots as compared to single family homes. It is therefore necessary for licensees to be familiar with the strata lot and matters relating to the strata corporation and to obtain as much information as may be necessary to assist the buyer. The process and cost of obtaining the necessary information does not relieve a licensee from this responsibility.

Strata corporations (including strata councils), strata managers, owners who sell their strata lots, and licensees frequently give information about strata matters to others. These parties must ensure that their information is accurate when they know that the recipient will reasonably rely on it. If the recipient suffers a loss because the information is inaccurate or misleading, the person providing the information may be liable for misrepresentation. Even if the information is accurate on its face, but reasonably leads the person to whom it is given to misinterpret it, the person providing the information may be liable.

Following is an explanation of the various documents that may be available when a strata lot is offered for sale.

(ii) Strata Documents
(1) Form B Information Certificate

Under the Strata Property Act, a buyer is entitled to obtain an Information Certificate (known as a Form B). The Form B contains information about the strata lot including the monthly strata fees, whether the owner has entered into an agreement with the strata corporation regarding alterations, and what the owner owes to the strata corporation. The Form B also provides information about the strata corporation such as the amount in the contingency reserve fund, whether the strata corporation is involved in litigation or arbitration and information about the use of parking spaces and storage lockers.

Attached to the Form B must be the strata corporation’s rules, the current budget, the owner developer’s Rental Disclosure Statement, if any, and the most recent depreciation report, if obtained.

Where a strata lot is part of a section, as discussed above, if the section is in compliance with the Strata Property Act the section will have its own strata fees, its own operating and contingency reserve fund, and possibly, its own depreciation report. Thus, a Form B will be required for the section as well as for the strata corporation.

The Strata Property Act references a “current” Form B. Many licensees mistakenly believe that a Form B that is dated within the past 30 or 60 days is current. In fact, a Form B is a snapshot of the current state of affairs in respect of information relating to both the strata lot and the strata corporation. Information such as the amount that the strata lot must pay in strata fees can change if a new budget is approved at an annual general meeting. Thus, if an annual general meeting was held after the Form B was prepared, although the Form B may be less than 30 days old, it may nonetheless be out of date. Similarly, the answer to the question respecting whether the strata corporation has been sued or is subject to arbitration can change in a day.

Because the listing licensee may have obtained the Form B when the licensee listed the strata lot, when providing the Form B to the buyer’s agent, if the listing licensee provides the Form B obtained at the time the strata lot was listed, the listing licensee may be providing a Form B that is not current even though it is less than 30 days old. As there is no way to know whether any of the information on the Form B has changed, the listing licensee should provide a new Form B, or confirmation from the strata corporation that the Form B being provided is current.

Although the Form B is generally of interest to the buyer, the listing licensee should use the Form B as a guide in determining with the seller how parking stalls and storage lockers are to be recorded on the listing. Thus, to ensure they are providing accurate and complete information, it is advisable for the listing licensee to obtain the Form B before they begin marketing a strata lot.

Additionally, the listing licensee should review, with the seller, the portion of the Form B that indicates how much the seller owes the strata corporation to ensure that the seller agrees with the amount and that the seller understands that in most cases the amount will need to be paid to the strata corporation, or arrangements that are satisfactory to the strata corporation must be made, before the strata corporation will issue a Form F. The Form F must be provided to the Land Title Office in order for the sale to complete in most cases. If the seller disputes some of the charges, such as fines, chargebacks for damage, or insurance deductibles, the listing licensee should advise the seller to immediately seek legal advice in order that the matter can be resolved. Waiting until a few days before the completion date to dispute the amount owing is not generally an effective strategy.

**Alert**

In the case where the strata lot is within a section of the strata corporation, a licensee should ensure that a Form B is requested from the strata corporation and the section.

Licensees should note that in some cases, the section and the strata corporation may be managed by different strata management companies.

(i) Engineering Reports vs. Depreciation Reports

Licensees should be aware that the terms “engineering report” and “depreciation report” reference two entirely different documents.

Over the years, many strata corporations have obtained engineering reports to identify structural, envelope or other building components deficiencies requiring repair. The report was specific to the problem areas and usually provided options for repair. The means by which a licensee can access an engineering report is discussed below under “Additional Strata Corporation Documents.”

In 2011 the Strata Property Act was amended to require strata corporations to obtain a depreciation report no later than December 13, 2013 unless the strata corporation has fewer than 5 strata lots, or the owners by 3/4 vote, agreed to waive the report. The Strata Property Act requires that a depreciation report contain an inventory of the physical components of the development, a summary of the repairs and maintenance work that occurs less often than annually, and a financial forecast that sets out the anticipated maintenance, repair and replacement costs projected over 30 years. The report must include a description of how the contingency reserve fund is currently being funded and it must contain at least three cash flow funding models to pay for the repairs. The report must include the name of the person preparing the report, a description of the person’s qualifications, whether the person carries errors and omissions insurance and it must set out the relationship between the person and the strata corporation.

The Rules require licensees to advise their client to seek independent professional advice on matters that are outside the expertise of the licensee. Licensees should therefore refrain from expressing an opinion on either an engineer’s report or a deprecation report. Buyer’s agents should recommend that their buyer obtain professional advice if the buyer has questions or concerns relating to the report.  

(ii) Parking Stalls and Storage Lockers

It is important to remember that, the use of parking stalls or storage lockers by the seller does not necessarily mean that they will be available for the purchaser. Unless it is clear that the parking stall/storage locker will be available to be used by the purchaser, the parking stall /storage locker should not be included on the listing.

Effective January 1, 2014, the Form B is required to indicate the designation of parking stalls and storage lockers and must indicate whether they are part of a strata lot, a separate strata lot, limited common property or common property. If the designation is common property, the Form B must also identify how the use is administered. The Form B must indicate whether the Strata Council has given approval for the use, whether the parking stall or storage locker is rented on a monthly basis and if so, the amount of the rent or alternatively, whether the parking stall or storage locker has been allocated by an assignment from the owner developer.

Following is an explanation of the various designations that may be identified on a Form B, and the significance to the seller and buyer.

  • Strata Lot or Part of a Strata Lot

Some strata plans designate parking stalls/storage lockers as part of a strata lot or, in some very rare cases, as a separate strata lot. Although such designations are rare, the Form B will indicate the designation. If the parking stall/storage locker is part of a strata lot, the new purchaser will automatically own and therefore have the use of the area when the strata lot is purchased. The listing for the strata lot can identify the parking stall/storage locker by reference to its stall or locker number. It is not necessary to list the parking stall/storage locker separately. No further action is required by the buyer to ensure that the buyer will have the use of the parking stall/storage locker.

In some cases, parking spaces may be designated as a separate strata lot. If the seller is selling both the residential/commercial strata lot and the parking strata lot, both must be listed for sale and separately transferred to the buyer.

  • Limited Common Property (LCP)

If a parking stall/storage locker is designated as LCP, whether by the developer, or by the owners at a later time, the parking stall/storage locker is automatically available for use by the owner of the strata lot to which the parking stall/storage locker is designated.

When listing a strata lot to which the exclusive use of a LCP parking stall/storage locker is designated the listing should indicate that the parking stall/storage locker is LCP. The numbers of the parking stall(s)/storage locker(s) can be shown on the listing as being the parking space(s)/storage locker(s) number that the buyer will be entitled to use. No further action is required by the buyer to ensure that the buyer will have the use of the parking stall/storage locker.

  • Common Property

If the parking stall/storage locker is designated on the strata plan as common property, it is within the control of the Strata Council, except in cases where there is a developer’s lease, which is discussed below.

Common property is owned by all owners as tenants in common. The Strata Council has the authority under the Strata Property Act to permit an owner or a tenant to use common property. If the parking stalls/storage lockers are common property, owners or tenants are entitled to use a particular area as a result of the Strata Council’s grant of exclusive use to that owner or tenant. The Form B will indicate whether the parking stall/storage locker is available for use as a consequence of an allocation of use by the Strata Council. In some cases, the permission to use the parking stall/storage locker may have been given many years ago. Some owners may not even realize that they are using their parking stall/storage locker as a result of the permission granted by the Strata Council. It may even be that the permission to use the parking stall/storage locker was originally given by the developer during the time the developer was acting as the strata council.  

The provision of the Strata Property Act that authorizes the Strata Council to grant permission to an owner or tenant to use common property limits the period of time for which permission can be given to one year. The permission may be subject to conditions. The permission may be renewed and may be made subject to the same or different conditions. Additionally, the permission for the exclusive use of common property may be cancelled on reasonable notice.

Because the allocation of the use of common property is within the control of the Strata Council and can change, when listing a strata lot where the parking stall/storage locker is common property, the seller should not promise a buyer that the buyer will be entitled to use any of the common property. Rather, the seller should refer the buyer to the information on the Form B.

The buyer can rely on the Form B to indicate which parking stall/storage locker is allocated to the strata lot being purchased, however the buyer’s agent should clearly point out the statement on the Form B that indicates that where the designation of the parking stall/storage locker is common property, the allocation is subject to section 76 of the Strata Property Act and may be subject to change in the future. If the Form B is incomplete, or the information conflicts with the information provided by the vendor, the licensee should recommend that their client seek legal advice.

  • Developer’s Leases

In a number of developments the developer has entered into a lease of the common property parking stalls/storage lockers to itself or to a company related to the developer. After leasing the common property, the developer then enters into agreements with purchasers in which the developer subleases and assigns one or more parking stalls/storage lockers to a purchaser. The developer may charge for all subleases, or it may charge for only additional parking stalls/storage lockers.

Although the lease and sublease agreements vary, generally, the sublease provides that the owner must assign the sublease to a new purchaser at the time the strata lot is sold.

Leases of common property parking and storage areas are seldom registered on title, however, the Form B is required to indicate whether such a lease is likely in place.

Although the seller may not recall whether there was a sublease agreement, the information about the sublease may be contained on the contract of purchase and sale that was prepared when the seller bought the strata lot. If the information about the lease and sublease is not available, the seller should rely on the Form B as the indication that a lease/sublease arrangement is likely to exist. However, without specific information about the sublease, and particularly which parking stall/storage locker was leased, the seller is unable to provide the purchaser with any definitive information regarding the purchaser’s ability to use the parking stall/storage locker other than the information contained on the Form B. If the seller requires more information on the parking stall/storage locker that was assigned as part of the sublease, the seller may need to obtain legal advice. If the seller has a copy of the sublease of a parking stall/storage locker from the developer, the listing licensee can include reference to the parking stall/storage locker when listing the strata lot for sale. The listing should indicate that the area in question is common property and that the seller has a sublease to a specific parking stall/storage locker. The number of the parking stall/storage locker can be shown on the listing. Without a copy of the sublease, the listing should only indicate the information contained on the Form B. A reference to a specific parking stall/storage locker should not be included on the listing agreement.

If the seller has a copy of the sublease, the buyer’s agent should obtain a copy and advise the buyer to read the sublease, or obtain legal advice, to ensure that the sublease can be assigned to the buyer. If the seller does not have a copy of the sublease, the buyer’s agent should recommend that the buyer obtain legal advice to ensure that the buyer will be entitled to the use of the parking stall(s)/storage locker(s) that are used by the seller. In such cases, a buyer’s agent should insert the following clause

Nature of the Parking Stall(s)/Storage Locker needs to be Verified Clause

Subject to the Buyer verifying on or before (date) that the parking stall(s)/storage locker. associated with the strata lot, which are # ____ is (are) designated under a lease between ____, as landlord, and ____, as tenant, or under a licence agreement between ____, as licensor [the person who gives the licence] and ____, as licensee [the person who takes the benefit of the licence], etc.).

This condition is for the sole benefit of the Buyer.

  • Claims the Parking Stall/Storage Locker was Purchased

In a number of cases, sellers of strata lots insist that the listing should include the parking stall/storage locker because the seller believes they bought the parking stall/storage locker from the developer. The payment may have occurred in conjunction with a sublease of the parking area, or it may have been required by the developer in order to permit the allocation of common property. Notwithstanding any claims by sellers that they paid for a parking stall/storage locker and thus own the parking stall/storage locker, the designations as set out on the Form B are the designations that must be considered when determining how to represent parking stalls/storage lockers on the listing and when considering what a purchaser will be entitled to use after the strata lot is purchased.

(2) Form F Certificate of Payment

The Strata Property Act entitles a purchaser, or a person authorized by a purchaser, to obtain a Certificate of Payment (Form F), which must be provided if

(a) the owner does not owe money to the strata corporation; or

(b) the owner does owe money but

(i) the money claimed by the strata corporation has been paid into court, or to the strata corporation in trust, or

(ii) arrangements satisfactory to the strata corporation have been made to pay the money owing.

The Form F is typically requested from the strata corporation, or the brokerage providing strata management services to the strata corporation, by a lawyer or notary public acting on behalf of either the buyer or seller with respect to the conveyance.

A Form F will not be provided if the owner owes money and has not paid it into court/trust or has not made arrangements satisfactory to the strata corporation to pay the money owing. It would be beneficial for a licensee to determine if there is money owing by the seller to the strata corporation as early as possible to avoid the Form F being withheld.

(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.

(iii) Land Title Documents
(1) Title Search

A title is issued for every strata lot created by a strata plan. As with any other property, it is essential that a search be conducted to ascertain who owns the property, the status of the property (i.e., fee simple or leasehold) and the nature of encumbrances against the property.

Under the Strata Property Act, an owner exercises many important rights, including access to a strata corporation’s records. In the case of a freehold strata lot, section 1 of the Strata Property Act defines the term ‘‘owner’’ as a registered owner. For example, if a husband and wife buy a freehold strata lot, but only the wife is registered on title as the fee simple owner, the wife is the only person who is an owner for the purposes of the Strata Property Act. In the case of a leasehold strata plan, the Strata Property Act defines the word ‘‘owner’’ to mean the leasehold tenant. Note that in a leasehold strata plan, a leasehold tenant is not the same as a tenant under the Residential Tenancy Act, S.B.C. 2002, c.78. If there is a registered agreement for sale of the strata lot, an owner is the registered holder of the last registered agreement for sale. If there is a registered life estate, an owner is the tenant for life.

(2) Strata Plan and Schedules

The Strata Property Act requires a strata corporation to keep permanently, among other documents, copies of the registered strata plan and any registered amendments. Even though a strata corporation must keep on hand its own copy of the registered strata plan as amended, a licensee should not rely on the strata corporation’s copy of the strata plan. A licensee should look to the Land Title Office for the most reliable and up to date copies of the registered strata plan and any amendments to it. These are important documents to review, regardless whether they are provided by the strata corporation, the sellers, or are obtained from the Land Title Office. If a listing brokerage does not obtain a copy of the entire registered strata plan and any amendments, at a minimum, the listing brokerage should obtain a copy of those portions of the strata plan that show:

  • the page showing the registered strata plan number (or phase) of the strata corporation
  • the overall site plan showing the location of the buildings, etc.;
  • the portion of the site plan showing the particular strata lot and any designation of limited common property in respect of that strata lot;
  • information respecting parking, storage and other amenities that are for the use of the particular strata lot;

Strata plans filed prior to July 1, 2000 contain schedules setting out the unit entitlement of each strata lot, the voting schedule, and the schedule of interest on destruction. After July 1, 2000 the schedule of unit entitlement and the voting schedule are filed separately and must be specifically requested. For strata plans filed after July 1, 2000, there is no longer a schedule of interest on destruction. Following is an explanation of each schedule and its significance to a buyer.

(i) Schedule of Unit Entitlement

A strata lot’s unit entitlement relative to the total unit entitlement for all strata lots determines the proportion of common expenses that a strata lot must pay. For residential strata lots, the Strata Property Act requires the unit entitlement to be either the habitable area of the strata lot, a whole number that is the same for all strata lots, or a number approved by the Superintendent of Real Estate. For non-residential strata lots, the unit entitlement is either the total area in square meters of the strata lot, a whole number that is the same for all strata lots or a number that is approved by the Superintendent of Real Estate. Although most buyers are only interested in the strata lot’s monthly strata fees, a buyer’s agent should point out the unit entitlement for the strata lot in question so that the buyer understands the basis on which the strata fees are determined. This is particularly significant for larger strata lots. Buyers should be advised that the unit entitlement will determine not only monthly strata fees but also the strata lot’s contribution to any special levies that the strata corporation approves.

(ii) Schedule of Voting

All residential strata lots have one vote. Thus, for a development that is entirely residential, a voting schedule included on a strata plan may be blank and a voting schedule will not be filed for strata plans filed after July 1, 2000.

For non-residential strata developments or developments containing both residential and non-residential strata lots a voting schedule may be filed in the Land Title Office. In a non-residential development, each strata lot’s vote is determined by the unit entitlement of the strata lot divided by the total unit entitlement of all strata lots. In a development containing both residential and non-residential strata lots, each residential strata lot will have one vote and each non-residential strata lot will have a vote based on the unit entitlement of the strata lot relative to the average unit entitlement of all residential strata lots. For example, if the average unit entitlement of the residential strata lots is 100, a non-residential strata lot with a unit entitlement of 50 will have a vote of .5 and a non-residential strata lot with a unit entitlement of 400 will have four votes. In such cases it is possible for the non-residential strata lots to have a fractional vote or more than one vote. In developments that are non-residential or developments that contain both residential and non-residential strata lots, a buyer`s agent should explain the significance of the voting schedule to the buyer.

(iii) Schedule of Interest on Destruction

For strata developments created prior to July 1, 2000, the strata plan will contain a Schedule of Interest On Destruction. This schedule is to be used to determine an owner’s interest in the land and personal property of the strata corporation when the strata corporation is wound up. The Strata Property Act no longer requires a Schedule of Interest On Destruction. Rather, at the time the strata corporation is wound up, the current assessed or appraised value is to be used.

(3) Other Land Title Documents

In addition to the strata plan, the Land Title Office maintains a Common Property Record and a Strata Plan General Index. These documents must be obtained separately from the strata plan and contain the following information.

(i) Strata Plan General Index

The strata plan general index lists all documents filed in respect of the strata corporation, the date the document was filed and the document filing number in order to permit retrieval of a particular document from the land title filing system. The index lists all bylaw amendments, and, for strata plans filed after July 1, 2000, the voting schedule for developments that contain non-residential strata lots or a combination of residential and non-residential strata lots (if one was filed) and the schedule of unit entitlement. Additionally, any amendments to the voting schedule or schedule of unit entitlement will also be listed on the strata plan general index.

(ii) Common Property Record

The common property record lists all of the charges and other interests that separately charge the common property including any filings that create limited common property that was created by means of a 3/4 vote and the filing of a sketch plan.

(4) MyLTSA

In addition to the availability of Land Title Office search facilities through a real estate board or one of the private title search services, in most cases a licensee may carry out a search through the Land Titles Survey Authority website at MyLTSA.ca. MyLTSA permits a licensee to search certain government information, including the Land Title Office and the Corporate Registry, via the Internet. A licensee may use MyLTSA to search the title of a single strata lot or to obtain a copy of an entire strata plan, together with related documents, such as amended bylaws. Charges vary depending on the nature and extent of a search. In general, a MyLTSA search tends to be very cost effective.

When using MyLTSA to order a copy of a strata plan, a licensee should always also check the Strata Plan General Index and the Common Property Record.