If you’re buying a condo or a townhouse, you’re probably going to be dealing with a Strata Corporation. A Strata is an organization that is set up to govern a multi-family residential complex, such as a condo tower or a group of townhouses. The law in BC is for the seller to provide two years‘ worth of strata minutes to a potential buyer if an offer is accepted. Looking through these minutes can be quite confusing if you’re not sure what to look for. Here are some tips on navigating these documents:
AGM (Annual General Meetings) occur every year in a strata building, and, unlike monthly meetings, all owners of the building are encouraged to attend. If there is a big, hot-button issue or a major project coming up, this is where it will be discussed. Have a look at the AGMs first to get a summary of any large cost items.
SGMs (Special General Meetings) are one-off meetings that are called, usually as a result of some major repairs/remediation, or emergency issue that has come up. Examples include leaky condo remediation, lawsuits/litigation, or emergency (large fire, flood, etc.). Although not always bad news (every strata has had one at one point or another), if an SGM is called, it’s probably a very important issue you should know about.
Depreciation Reports are required in BC for strata corporations as of 2013. A Depreciation Report is a unique report, prepared by a team of engineers and specialists, that outlines the health of a building’s large systems such as building envelope (siding, windows, roof), plumbing, heating system and structure. It also outlines how the strata will be paying for any future repairs / replacement, and when the repairs will occur. It’s a great way to know what upcoming costs / levies you may need to pay over the next 5, 10, and even 20 years. Note: A strata may choose to waive doing a depreciation report if more than three – fourths of the owners vote against it.
Some stratas may try to hide embarrassing or serious issues by using weasel words:
“Due to elevated moisture levels in the dry board at the 4th floor, ABC Painting will be attending to provide quotation on treatment”
Translated: “The roof leaks on the 4th floor”
I’ve seen this countless times – if it looks fishy, ask someone on council.
I recently came across this:
“The depreciation report is now in its 4th draft stage. We will be meeting with XYZ engineering company this month to have them add information about the great maintenance program we are implementing, and to revise some wording.”
Translation: “The engineer’s report was too critical, and we are having them re-write the report until it looks friendly to potential buyers”. A strata that gets the engineering company to re-do the report five times may have something to hide!
Realtors, Home Inspectors and other industry experts can assist you with reading these minutes and may be able to point out red flags or areas of concern. If you don’t know the answer to a question – ASK! It may make all the difference – especially on the biggest purchase of your life.
Author David Fairbairn is a certified, licensed home inspector serving Vancouver and the Lower Mainland. He has been featured in the media and has contributed to "24" Newspaper, and Global TV. He has spent years working with residential and commercial building projects, and holds a Power Engineering License in BC. Why not give him a call for your next Home Inspection? Call 604 395-2795 or email email@example.com today!