If you’re buying a condo, it’s essential that you understand the strata minutes of your new building, explains Bob de Wit of the GVHBA
Considering the purchase of a strata condo? One of the key steps to ensure you are making a sound purchase will be in reviewing the strata minutes. Not the most exciting of reading choices – however, the minutes will provide you with an in-depth look, not only to the building and operations, but also a peek into the condo culture.
How to approach minutes, in four easy steps:
#1 Read the minutes from oldest to most recent
A minimum of two years is a standard request. As you read, keep a running tally of any questions you have, removing from the list questions answered as you read forward through subsequent months. From this summary, prepare a list of any unanswered questions for the property manager or seller.
#2 Be sure to read correspondence closely
Pay attention to any records of complaints regarding a specific owner. Be sure to enquire about corresponding unit number and determine proximity to the unit you are looking to purchase. Noise/ harassment disputes are very hard to resolve and wherever possible should be avoided.
#3 Request a copy of all current bylaws and rules
Look for tenant requests and said outcomes. If a previous request has been voted down, ie access to electrical outlets for electric car charges (often not readily available in older buildings), or acceptance of a pet slightly larger than a 40 lb maximum (not easy sneaking in your Newfie), you can be sure this will not be an easy change.
#4 Request copies of reports
Always request copies of reports referenced in minutes,and if work is done based on these reports, ask for a scope of work to make sure all suggested work was completed. Reports may include:
- Current budget and a statement of the contingency reserve fund. This will help determine if there is a sufficient budget to meet the current operations of the building, and enough contingency to cover an emergency repair or replacement. Note: The contingency and required upkeep of the building and property will directly affect monthly strata fees.
- Insurance policy and the history of insurance claims on the strata common areas can signal potential problems.
- A depreciation report, if available, will include a Form B, providing information on current and future costs to the strata. (Effective December 13, 2013, all strata corporations of five units or more in British Columbia, must complete a depreciation report as required by the Strata Property Act, unless they have passed a three-quarters vote each year they wish to be exempt from the requirements.)
- A copy of the strata plan that shows what property you will be responsible for and what is common property (e.g. decks and balconies), the provision of parking and storage space or any changes that have been made to the development. Note: your home inspector may not have access to inspect common property areas, emphasizing the importance of reviewing a depreciation report.
In today’s sellers’ market, there is pressure to put in quick offers with limited subjects. Real estate agents can request minutes in advance before the offer is placed, thus removing the subject to review. This can place added pressure on the buyer to “scan” vs thoroughly read the minutes. Be sure to step back and take the time to read. As a prospective purchaser, you want to obtain as much information as possible regarding the strata corporation, the condition of common property and your new neighbours. It is a story you’ll be glad you gave more than a minute to read.
Bob de Wit is the CEO of the Greater Vancouver Home Builders’ Association (GVHBA), the voice of the residential construction industry in Metro Vancouver. GVHBA has more than 850 members and is proudly affiliated with the provincial and national Canadian Home Builders’ Associations. You can reach Bob at email@example.com.
Read more: http://www.rew.ca/news/how-to-understand-strata-minutes-when-buying-a-condo-1.2058232