What Strata Documents Should You Review Before Buying a Condo in BC?

When you're buying a condo or townhouse in British Columbia, reviewing the strata documents can be just as important as inspecting the home itself.

A property may look great during a showing, but the strata documents can reveal important information about the building's finances, maintenance history, upcoming projects, insurance and rules that you won't necessarily see when walking through the unit.

There can be a lot of paperwork, so knowing what to look for — and how the documents fit together — can make the process much easier.

Here's where we typically focus our attention.

Strata Council Meeting Minutes

Meeting minutes are one of the first places we look.

They provide a window into what's been happening in the building and what council has been dealing with.

We look for recurring discussions involving things such as:

• Water leaks or plumbing problems

• Roof or exterior issues

• Elevator problems

• Parkade repairs

• Window or balcony concerns

• Insurance claims

• Owner complaints or disputes

• Engineering reports

• Proposed major projects

• Discussions about special levies

One mention of a problem doesn't necessarily indicate a serious issue. What can be more revealing is seeing the same concern appear repeatedly over several months of minutes.

That may tell us an issue hasn't yet been fully resolved.

Annual and Special General Meeting Minutes

Annual General Meeting (AGM) and Special General Meeting (SGM) minutes can be particularly important because this is where owners may vote on significant decisions.

These documents can show whether owners have approved major repairs, changes to the strata's budget, special levies, amendments to bylaws or other important matters.

We also look for projects that were proposed but didn't receive approval.

A major repair being voted down doesn't necessarily mean the underlying issue has disappeared. It may simply mean the owners haven't agreed on how or when to deal with it.

The Form B Information Certificate

The Form B is an important document when purchasing a strata property in BC.

It provides information about the particular strata lot and the strata corporation, including certain financial and administrative information.

Depending on the circumstances, it can contain details relating to strata fees, money owing to the strata corporation, approved special levies and other information relevant to the purchase.

The Form B should be reviewed carefully along with its required attachments and the other strata documentation.

Depreciation Report

The depreciation report provides a longer-term look at the building.

It assesses major common-property components and estimates when significant repairs or replacement may be required.

Depending on the property, this could include:

• Roof

• Plumbing

• Windows

• Building envelope

• Elevators

• Parkade

• Balconies

• Mechanical systems

• Other common property

The report can help buyers understand what major expenditures may be coming in the years ahead.

It's important to remember that the dates and costs in a depreciation report are estimates, not a guaranteed construction schedule.

The most useful information often comes from comparing the depreciation report with the strata's recent meeting minutes.

If the depreciation report identifies an aging building component and the minutes show council is now obtaining quotes for that same item, it's worth investigating.

Financial Statements and Budget

We also want to understand the strata's overall financial position.

Financial statements and budgets can provide information about the strata's income, expenses and financial resources.

We look at the operating budget as well as the Contingency Reserve Fund (CRF).

The CRF is intended to help pay for common expenses that occur less frequently than regular operating expenses, including certain major repairs and replacements.

A healthy reserve fund doesn't guarantee there won't be a future special levy, but it can provide useful context when evaluating how prepared the strata may be for upcoming expenses.

Special Levies

Buyers should determine whether there are any approved special levies associated with the property.

But we don't stop there.

Meeting minutes and other documents may indicate that council is considering a major project even though owners haven't yet voted on how to pay for it.

We therefore look for approved levies as well as discussions that could potentially lead to one in the future.

Strata Insurance

Insurance has become an important consideration when purchasing a strata property.

Buyers should review the strata corporation's insurance information and pay particular attention to the policy's deductibles.

Water-damage deductibles can be especially important.

You'll also want to speak with your own insurance provider about coverage for your individual unit and whether appropriate coverage is available for circumstances where an owner could become responsible for a strata corporation's deductible.

Bylaws and Rules

Not everything in the strata documents is about money.

The bylaws and rules can have a significant impact on how you use your home.

Depending on the strata, they may address matters such as:

• Pets

• Parking

• Storage

• Renovations

• Use of common property

• Barbecues

• Smoking

• Age restrictions where legally permitted

• Other day-to-day requirements

Never assume the rules at one condo building will be the same as another.

If something is particularly important to you, confirm the rules before purchasing.

Look for Patterns, Not Just Individual Problems

One of the most useful things you can do when reviewing strata documents is look for patterns.

A single plumbing leak may not be concerning.

Repeated leaks throughout the building over several years could tell a different story.

Similarly, an older roof isn't necessarily a problem if the strata has already budgeted for replacement and has the funds available.

The goal isn't to find a building with absolutely no issues — that's probably unrealistic.

The goal is to understand what the issues are, how the strata has responded to them and what financial obligations may be ahead.

Buying a Condo or Townhouse in Burnaby?

Reviewing strata documents can involve hundreds of pages of information, and understanding how the different documents relate to one another can make a significant difference when evaluating a property.

When working with condo and townhouse buyers, Team Keenan Neilly helps review the available strata information and identify questions that may require further investigation.

If you're considering buying a condo or townhouse in Burnaby or elsewhere in the Lower Mainland, contact Kelly Huber for experienced, straightforward real estate advice.