Chapter 9: Strata Titles (Condominiums)

Question 1

Which of the following correctly completes the sentence: in a strata plan, the term “unit entitlement” refers to:

A. the value of each condominium unit relative to other units.
B. the share of the value on demolition owned by each condominium unit owner.
C. the share of real property taxes payable by each condominium unit owner.
D. the figure used to calculate a strata owner’s contribution to the common expenses of the strata corporation.

1.) B, D, and D only
2.) A and C only
3.) C and D only
4.) Only D

Answer 1

4.) Only D

Question 2

Common property in a strata title development is:

1.) owned equally by all members of the strata corporation.
2.) owned by the strata corporation.
3.) owned jointly by the strata corporation and the strata council.
4.) any property not designated as strata lots on a strata plan.

Answer 2

4.) any property not designated as strata lots on a strata plan.

Question 3

For purposes of assessment and taxation:

1.) the strata development is assessed as a whole and each strata lot owner pays taxes in equal proportions.
2.) each strata lot is assessed and taxed separately from the common areas which are assessed and taxed to the strata corporation.
3.) the strata development is assessed as a whole and each strata lot owner pays taxes in accordance with his unit entitlement.
4.) each strata lot, together with the owner’s share in the common property, is deemed to be a separate parcel of land and improvement.

Answer 3

4.) each strata lot, together with the owner’s share in the common property, is deemed to be a separate parcel of land and improvement.

Question 4

Dick owns a 2400 SqFt unit in a strata complex. There are 19 other units, the square footage of which totals 37,600 SqFt. The common property has an area of 12,600 SqFt. The total common expenses for the year amount to $48,000. What is Dick’s annual share of the common expenses?

1.) $7,161.96
2.) $3,063.84
3.) $9,142.80
4.) $2,880.00

Answer 4

4.) $2,880.00

Question 5

Who owns the common property of a strata corporation?

1.) The owner-developer of a strata project, as a trustee for the individual strata lot owners.
2.) The strata corporation.
3.) Each individual strata lot owner owns a share of the common property of a strata corporation in the proportions set out in the schedule of unit entitlement.
4.) None of the above.

Answer 5

3.) Each individual strata lot owner owns a share of the common property of a strata corporation in the proportions set out in the schedule of unit entitlement.

Question 6

Which of the following statements comparing cooperatives and condominiums are TRUE?

1.) Both condominiums and cooperatives are created by filing a plan in the land title office.
2.) Purchasers of both condominiums and cooperatives acquire a fee simple interest in the real property on which the purchased unit is situated.
3.) Purchasers of condominiums will generally find it easier to finance their purchase than will purchasers of cooperatives.
4.) Both owners of condominiums an owners of cooperatives are equally free to sell their units to whomever they wish.

Answer 6

3.) Purchasers of condominiums will generally find it easier to finance their purchase than will purchasers of cooperatives.

Question 7

Consider a building in BC with a registered strata plan. In the event that the building is destroyed and the strata corporation passes a resolution to rebuild, how will the proceeds of any insurance policy be distributed?

1.) Equally between all owners
2.) According to the unit entitlement of the individual strata lot owners
3.) According to the value each strata lot bears to the total value of all lots (values determined at the inception of the project)
4.) According to a conversion schedule based upon the most recent assessed values of the strata lots.

Answer 7

4.) According to a conversion schedule based upon the most recent assessed values of the strata lots.

Question 8

The interest that is acquired by a purchaser of a strata lot is:

1.) a fee simple interest only.
2.) a joint tenancy with all of the other strata lot owners.
3.) a fee simple interest in the strata lot and a fee simple interest, as a tenant in common with the other strata lot owners, in the common property.
4.) a share in the strata corporation in proportion to the unit entitlement.

Answer 8

3.) a fee simple interest in the strata lot and a fee simple interest, as a tenant in common with the other strata lot owners, in the common property.

Question 9

Which of the following is FALSE about a phased strata plan (using BC law)?

1.) The development occurs in states, using capital from a completed phase to be used for the next stage.
2.) The developer must submit a form which shows the intended plans for each phase, including where all common properties are located, so that a certificate of approval may be given in respect of each separate phase.
3.) A ground lease is arranged between the fee simple owner and the developer.
4.) A bond may be required to ensure that the common areas set out on the plan are built.

Answer 9

3.) A ground lease is arranged between the fee simple owner and the developer.

Question 10

The strata title system can also be used for non-residential properties. Which of the following statements apply to these types of developments?

A. This type of arrangement gives a owner/occupier greater control over the use and enjoyment of the property.
B. It allows the buyer to choose a location they prefer without fear of being unable to renew the lease.
C. It provides an investment opportunity.
D. It reduces the carrying costs for the owner/occupier.

1.) A and B only
2.) A and C only
3.) C and D only
4.) All of the statements above are correct

Answer 10

4.) All of the statements above are correct

Question 11

Manfred is eager to buy a unit in a new strata development. However, he is a bit confused about what a strata owner’s interest actually is. Which of the following statements about strata developments is TRUE?

1.) A strata owner owns a fee simple interest in the strata lot and a proportionate interest in the common property as a tenant in common.
2.) In general, common property is all property that is not designated as part of a strata lot on the strata plan.
3.) A strata owner’s maintenance fees are usually based on the owner’s unit entitlement calculated as the ratio of the square footage of the individual strata lot to the total square footage of all strata lots in the plan.
4.) All of the above statements are true.

Answer 11

4.) All of the above statements are true.

Question 12

Ursula owns a strata lot in a residential development. The square footage of her lot 1,250 SqFt and the total square footage of the other 22 strata lots is 27,550 SqFt. The common property amounts to 20,000 SqFt. The annual expense for the current year are $107,000. The strata title legislation provides that the maintenance fees are calculated as follows:

(square footage of strata lot divided by total square footage of all strata lots) multiplied by total annual expenses.

Calculate Urula’s monthly payment.

1.) $535.00
2.) $557.29
3.) $387.01
4.) $401.25

Answer 12

3.) $387.01

Question 13

Alan, an accordion player in a polka band, has found the condominium of his dreams. Unfortunately, Alan is so delighted with the condominium that he ignores the advice of his friends and purchases it without asking about the rules and regulations or reading the bylaws. Two months after Alan moves in, he is advised by the strata council that there have been complaints by the other strata lot owners about his late night accordion playing. Alan responds that he can do whatever he likes in his own unit. The strata council directs him to rule 47 of the rules and regulations which states: “The playing of any musical instrument is strictly prohibited between the hours of 8pm and 10am from Sunday to Thursday”. Alan seeks the advice of a lawyer, who correctly advises him that:

1.) a strata council can generally replace and repeal bylaws at the regularly scheduled council meetings.
2.) the strata corporation, rather than the strata council, is generally the body empowered to make bylaws which affect the individual strata lots, the Part 5 bylaws must have been amended by a special resolution.
3.) in order for rule 47 to be enforceable, it must have been been voted for by at least 51% of the members of the legislature.
4.) in order to ben enforceable, Rules usually have to be passed by at least 75% of the members of the strata corporation.

Answer 13

2.) the strata corporation, rather than the strata council, is generally the body empowered to make bylaws which affect the individual strata lots, the Part 5 bylaws must have been amended by a special resolution.

Question 14

Priscilla purchased a ten year old residential strata unit as an investment. She is relying on the rent from the unit to provide part of her monthly income. Recently the strata corporation held a special general meeting at which the bylaws were properly amended to reduce the number of units that can be rented to zero. Which of the following statements is TRUE?

1.) Priscilla can apply to the strata council on the basis of hardship and request permission to rent her unit.
2.) Priscilla will not be affected by this bylaw since it was not in effect at the time she purchased her unit for rental purposes.
3.) As an owner in fee simple of her strata lot, Priscilla has an unrestricted right to lease her property and can therefore continue to rent her unit.
4.) None of the above statements are true.

Answer 14

1.) Priscilla can apply to the strata council on the basis of hardship and request permission to rent her unit.

Question 15

Which of the following best describes the “strata corporation”?

1.) The individual strata owners collectively, once the strata plan has been deposited at the land title office of the declaration and description has been registered.
2.) A body of three to seven elected representatives from among the owners of the strata lots.
3.) A corporation formed by a group of individuals who possess an undivided joint ownership interest in the land and/or buildings.
4.) A group of professional managers hired by a condominium project to handle the matters affecting the security and maintenance of the common property, facilities and assets of the condominiums.

Answer 15

1.) The individual strata owners collectively, once the strata plan has been deposited at the land title office of the declaration and description has been registered.

Question 16

Which of the following is FALSE in regards to management contracts?

1.) Management contracts allow strata council to delegate some of their responsibilities.
2.) A homeowner volunteer is often a cheaper option than a management company.
3.) Professional management companies may provide a degree of expertise not possessed by members of the strata council.
4.) Due to the likelihood of a conflict of interest, the use of a combination of management systems should be strongly discouraged.

Answer 16

4.) Due to the likelihood of a conflict of interest, the use of a combination of management systems should be strongly discouraged.

Question 17

Which of the following statements comparing cooperatives to condominiums is FALSE?

1.) A condominium owner generally has a greater ability to dispose of his or her interest than does an owner in a cooperative.
2.) Both condominiums and cooperatives are capable of being financed by a means of conventional mortgage.
3.) Where a condominium of cooperative is located on leased land, the owner’s interest will be a wasting asset.
4.) Cooperative ownership differs from strata ownership in that a cooperative owner does not own an individual fee-simple title in his or her unit.

Answer 17

2.) Both condominiums and cooperatives are capable of being financed by a means of conventional mortgage.

Question 18

Which of the following is NOT an example of a typical duty of a strata corporation?

1.) The obligation to maintain fire insurance to the full replacement value of the project.
2.) The obligation to establish a contingency reserve fund and determine the annual levy for the fund.
3.) The obligation to raise money for legitimate strata purposes as necessary through the disposition or encumbrance of all or part of the common property.
4.) The obligation to establish an administrative fund sufficient for the control, management, and administration of the common property.

Answer 18

3.) The obligation to raise money for legitimate strata purposes as necessary through the disposition or encumbrance of all or part of the common property.

Question 19

A strata plan, as described in most provinces is:

1.) a plan contained in the disclosure statement filed with the superintendent which shows the developer’s goals for the development.
2.) filed in the land title office and designates which parts of a strata project are strata lots and which are common property.
3.) used for all condominiums or cooperative developments.
4.) only necessary when creating five or more strata lots.

Answer 19

2.) filed in the land title office and designates which parts of a strata project are strata lots and which are common property.

Question 20

Henry lives in an entirely residential strata complex and owns a large dog. Under a section of the bylaws, he has been given notice by the strata corporation to remove his dog. Henry has kept the dog in his strata lot since he purchased the lot three years ago. It has never caused any complaint until now. Henry is the only owner who has an animal. Which of the following courses of action is available to Henry?

1.) If he could obtain support of all of the owners, he could have the bylaw amended.
2.) He could apply to a court for an order prohibiting the corporation from exercising its affairs in this way, as it is significantly unfair to him.
3.) He could have an arbitrator appointed.
4.) All of the above courses of action are available to Henry.

Answer 20

4.) All of the above courses of action are available to Henry.