Chapter 7: Strata Properties and Cooperatives

Question 1

What happened in year 2000, July 1? What act was created to replace what former act?

Answer 1

Strata Properties Act was created on July 1, 2000 to replace Condominium Act. The SPA retains most legal fundamentals contained in previous strata legislation and adds many refinement.

Question 2

What is unit entitlement?

Answer 2

The number that is assigned to each strata lot is used to determine the owner’s:

1. proportionate ownership in the common property
2. the strata expenses and liabilities for which the owner is responsible.

Question 3

What must the developer file at the Land Title Office when complete the strata property?

Answer 3

1. Schedule of unit entitlement

2. strata plan

Question 4

What is the formula for calculating a strata lot’s contribution to an expense?

Answer 4

Unit entitlement of a strata lot / total unit entitlement of ALL strata lots X total contribution

• unit entitlement = habitable area (doesn’t include common area)
• total unit entitlement must include the strata lot’s too ; ALL strata lots

Question 5

Where can the licensee find the schedule of unit entitlement and what else should the licensee check regarding the formula?

Answer 5

LTO or my LTSA.

Be sure to also check for any resolution which is decided by unanimous vote approving a new formula that should be registered. Check the LOT for that as it might differ from the usual formula of unit entitlement. Review the general index when ordering copies of strata plans from LTSA. The general index will show resolutions.

Question 6

Does the LCP (limited common property) run with land? How do you establish LCP?

Answer 6

Yes. The designation “runs with land”. Every owner who has the right to use LCP must follow the strata corporation reasonable access to LCP for the strata corporation to perform its duties.

A developer can designate the common property as LCP on the strata plan when they deposit the strata plan at LTO. Or owners can designate by either amending the strata plan or through a vote at an annual meeting. To remove or add LCP, a unanimous vote must happen.

Question 7

What is “short-term excusive use”? How to approve it?

Answer 7

A special privilege or a short-term excluseive use agreement. For example: parking stalls, storage lockers.

If the permission involves significant change in the use or appearance of common property - 3/4 vote is needed
If not - strata council may vote by majority vote and grant the privilege. However, the grant cannot be more than a year. And the conditions of using and period can be altered by the council.

Question 8

How does the individual liability differ in a strata corporation and a business corporation?

Answer 8

Business corp has limited liability, which means when you get a court judgment, it is against the company, not its members. However, if someone sues against a strata corporation, section 166 of SPA provides that it serves as a judgment against ALL OWNERS. Each owner is liable to pay their share of the judgment according to the Schedule of Unit Entitlement.

Question 9

What is a section?

Answer 9

A legal entity, “mini strata corporation”.

• comprised of strata lots that share similar characteristics (not necessary all residential, can be non residential + residential, townhouse, apartment style strata lots, etc)
• sections have their own executive and represent the owners of lots

Question 10

What is a council?

Answer 10

1. An executive body
2. Elected by the strata owners to represent the strata corporation
3. To carry out the duties and oversee its affairs
4. Only strata lot owners are eligible to sit in the council

Question 11

Who is the first council? Who creates the strata corporation?

Answer 11

The developer serves as the first council. The developer creates the strata corporation when it deposits the strata plan at LOT.

Question 12

What if the developer fails to transfer the council to the strata lot owners within 6 weeks of required conditions?

Answer 12

Developer must pay $1000 to the strata corporation for the first 30 days of delay and $1000 for every additional seven days of delay. If developer fails to hold the first annual general meeting, an owner may hold the meeting after giving the necessary notice for the meeting.

For the first annual general meeting, the owners must elect a council for the first time. From that point onwards, the owners must elect a new council EVERY YEAR at the annual general meeting.

Question 13

When should the first annual general meeting happen? Host by whom?

Answer 13

In the first annual meeting which should happen within 6 weeks if…

• transfer of 50% plus 1 of the strata lots has happened
• 9 months from the date of the first transfer of strata lot to a purchaser

If a developer fails to hold the first meeting, an owner may hold the meeting with notice given.

Question 14

How many days of notice needs to be given in advance of every general meeting?

Answer 14

20 days

Question 15

Every year the annual general meeting must happen at when the latest? What will happen in the meeting?

Answer 15

No later than 2 months after the strata corporation’s fiscal year end.

1. appoint a new council
2. approve the budget

Question 16

Who may call a special general meetings, or “extraordinary general meetings” (EGM)?

Answer 16

1. A council may.
2. or whoever persons holding at least 20% of the strata corporation’s votes may demand in writing

The members can also waive holding a general meeting if they follow certain procedures set out in the SPA

Question 17

Can a mortgage lender vote in a general meeting?

Answer 17

Yes. But the mortgage document must give the lender the right to vote and the lender of mortgage must give 3 days notice to the strata corporation.

The lender can only vote in respect to insurance, finance and maintenance, matters that affect the security of the mortgage.

Question 18

Who is a strata property manager?

Answer 18

Since the strata corporation’s responsibilities are day to day and time consuming, the SPA permits the strata corp to hire a strata property manager to carry out these functions.

Strata managers must be licensed under the RESA unless otherwise exempted and must receive remuneration.

The manager once hired, represents the strata corporation. The strata property manager must only take their instructions from the council. He also has fiduciary responsibilities to the strata corporation and must act only in the strata corporation’s best interest.

Question 19

What should licensee do when you are acting on behalf of an owner who manages a residential rental in a strata development and is renting out an apartment to a tenant?

Answer 19

1. Must get the tenant to sign the Form K, Notice of Tenant’s Responsiblities and return the signed form to the Strata Corporation within 2 weeks from the start of tenancy
2. Give a copy of the bylaws and rules to the tenants

Failure to do so, the tenant can end the tenancy within 90 days of learning about the breach, and landlord will have to cover the moving expenses to a maximum of one month’s rent.

Question 20

What are the exemptions from the rental restrictions ?

Answer 20

1. family members
2. hardships

*Exemptions do not count toward rental limit

Question 21

What is the grace period in new rental restriction bylaw?

Answer 21

One year following the enactment by the bylaw. What if someone moves in right on the date of the bylaw is passed? the one year grace period does not start until the tenant moves out.

Question 22

What is the process from developing leasehold strata to selling a leasehold strata lot? Name it in 3 steps.

Answer 22

1. Developer get the “ground lease” from the leasehold landlords, which may be the gov, municipality, regional district, First Nation, public authority (university, a board as defined in School Act, etc)
2. File a strata plan “Leasehold Strata Plan” and converts the parent parcel into individual strata lots and common property.
   - this triggers new fee simple titles in the name of the leasehold landlord for each of the strata lots created
   - ground lease is converted into individual leases between leasehold landlord and the developer for each lot
3. Developer cannot sell fee simple interest, but it sell its interest as a leasehold tenant under the strata lot lease. The asignment of contractual rights transfer the interests to another buyer and the new buyer becomes the leasehold tenant of the leasehold landlord’s fee simple interest. The buyer registers that interest as “leasehold tenant” as a charge against title to the strata lot.