Changes in Strata properties

Very interesting article from Mike Mangan (the real estate guru lawyer) regarding strata properites - interesting read!!

 

STRATA UPDATE

Mike ManganSince late 2013, the provincial government has brought into force various changes affecting strata properties. It seems a good time to review these notable developments.

Strata Records
There are new strata record-keeping requirements concerning parking stalls, storage lockers and depreciation reports.

As of April 9, 2014, a strata corporation must keep a current list of each parking stall or storage locker number, as the case may be, allocated to an owner.1

Effective in 2014, an Information Certificate (Form B) must state whether there is a parking stall allocated to the strata lot and, if so, whether the stall is part of the strata lot, a separate strata lot, limited common property or common property. Where a stall is allocated, the Form B must now also state whether the strata council has approved that allocation.

Likewise, the Form B now includes the same sort of information regarding storage lockers. If there is no storage locker allocated to the strata lot, the Form B must also state, whether any storage is available.2

As of late 2013, a strata corporation must permanently keep any depreciation report obtained under the Strata Property Act.3

The strata corporation must also keep any report regarding the repair or maintenance of a major item in the strata corporation, including an engineer’s report, a risk management report, or any report involving information that must be contained in a depreciation report.4 These must be kept by the strata corporation until the disposal or replacement of the item(s) to which each report relates.5

Repairs
The government also lowered some voting barriers that might otherwise delay important repairs relating to depreciation reports, and new special levy remedy.

Normally, a three quarter vote of the eligible voters is necessary to approve an expenditure from the contingency reserve fund (CRF); for instance, to repair common property. The government has lowered the voting threshold where the most recent depreciation report recommends certain repairs. So long as the most recent depreciation report recommends the work in question, a majority vote is sufficient to approve this CRF expenditure.6 A three quarter vote is still necessary for all other CRF expenditures.

In late 2013, the government also created a new special levy remedy to override the defeat of a special levy for repairs, if certain criteria are met.7 Normally, a three quarter vote of the eligible voters is required to approve a special levy for repairs. Now, where such a resolution fails to obtain three quarter support, the strata corporation may apply to the Supreme Court of British Columbia to approve the levy.

First, the special levy must be for the maintenance or repair of common property or common assets. The work must be necessary for safety or to prevent significant loss or damage. Next, even though they did not obtain three quarter of the votes, the number of votes cast in favour of the failed resolution must be more than half of the votes cast. Finally, the strata corporation must apply to court within 90 days after the failed vote. If the court approves the special levy, the strata corporation proceeds as if the levy passed in the usual way.

Money
In 2014, the province clarified that the operating fund be used for expenses necessary to obtain a depreciation report.8 Where an operating expense appears in the strata corporation’s annual budget, the eligible voters may approve it by majority vote. If a strata corporation wishes instead to treat the cost of preparing a depreciation report as a CRF expense, then only majority vote approval is necessary.9

Apart from depositing its savings or special levy funds in an account at an insured savings institution, a strata corporation may invest those monies in other more sophisticated investments, if certain requirements are met. Effective July 1, 2014 the province simplified those requirements, making it easier for a strata corporation to invest its funds in more advanced, higher yield investments.10

Mike Mangan
B.A., LL.B.

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Derryanne Hubbard

Derryanne Hubbard

REALTORĀ®
CENTURY 21 Executives Realty Ltd.
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