Your Strata could be NON COMPLIANT. How do you know for sure?
Is Your Strata Compliant...or not?
Some realtor licensees refer to strata corporations that do not hold meetings, or maintain the necessary operating and contingency reserve funds as "non-compliant" In such strata corporations, meeting minutes, budgets, and/or financial statements may not exist.
To ensure that sellers will not be held liable by buyers for the strata corporation's failure to comply with the legislation and will not be liable to produce documentation that does not exist, listing licensees should ensure that any subject clauses requiring the production of documents (other than the request for insurance documents which is discussed below) are deleted.
Additionally, listing realtor licensees may wish to include the following clause in the BC Contract of Purchase and Sale when selling these properties, but care must be taken to ensure the strata corporation is “non-compliant” prior to using the following clauses or some variation thereof.
Properties without a Strata Council Clause The Buyer acknowledges that this strata corporation has not been run in compliance with the Strata Property Act and, in particular, there is no active strata council, there have been no strata meetings, there is no budget, no strata fees have been collected, and there is no operating or contingency reserve fund or financial records.
“In such cases, buyer's agents should recommend that buyers obtain legal advice before becoming committed to buy and may wish to include the following clause making the contract subject to obtaining legal advice.”
Subject to Legal Advice Subject to the (select either Buyer or Seller) obtaining legal advice satisfactory to the Buyer or Seller concerning (select easement, builders' lien, financing or define applicable issue)______________________by (date) This condition is for the sole benefit of the Buyer.
The following is an excerpt from “ The Professional Standards Manual for Trading Services”
“However, notwithstanding general non-compliance by the strata corporation with the legislative requirements, a buyer's agent should obtain a copy of the strata plan and related schedules (if any) from the land title office and the agent should insist on obtaining a copy of the strata corporation insurance documents. The Strata Property Act requires every strata corporation to maintain property insurance on the buildings on a strata plan and to maintain liability insurance.
This means that the insurance policy should be in the strata corporation's name, i.e., The Owners Strata Plan (alpha/numeric sequence identifying the strata corporation). Owners in smaller strata corporations and particularly duplex owners may believe that obtaining personal insurance is sufficient; however, such insurance does not meet the requirements of the Strata Properly Act and may mean that the property is NOT insured.”
Related Article:
Is Your Strata properly insured? Many are not and don't know it!
More Strata Governance Pages & Articles:
- Strata Governance & How We Can Help
- The Truth About Strata Depreciation Reports
- Are There People in Your Strata Complex Getting a Free Ride?
- Myths Surrounding the Dreaded Strata Depreciation Report
- Strata Governance and Compliance. Do you know the difference?
- Your Strata could be NON COMPLIANT. How do you know for sure?
- Is Your Strata properly insured? Many are not and don't know it!
- How to avoid Personal Liability as a Strata Council Member
- One of the most neglected & misunderstood areas of the Strata Property Act
- Have strata council's expenditures been approved? How do you know?
What You Need to Know
- Strata Governance
- Strata Communication
- Strata Financial Control & Administration
- Maintenance of Strata Physical Assets
- FAQ
- Contact Us
Strata Articles
What do Realtors look for when representing a seller or buyer of a Strata Property?
There are a number of important factors which Realtor's look for when representing a buyer or seller of a Strata Property.
Learn the factors which
Why a Realtor may steer their buyer clear of a particular strata purchase?
There are many reasons why a realtor may steer their buyer away from a particular strata purchase.
Learn what you as a buyer should be aware of
Testimonials
“We decided to hire a new management company to guide us through a major envelope retrofit at the same time as when we were commencing legal
...read on »Once onboard as our property manager, Kevin O’Donnell set to work solving a number of long term issues regarding illegal activity by some residents,
...read on »