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Buying a condo? Make sure you understand Strata Corporations
If you are buying a condo or any other strata property, it’s essential that you fully understand how strata corporations work. You may decide that you want to be on the council or you may decide to take more of a back seat. Either way, you need understand the system and processes in place to ensure your building is being well managed and your investment is protected.
Strata Corporation as Local Government
The Strata Property Act works like the Canadian constitution in how it divides powers, obligations and rights between owners and strata councils. In fact, it creates a structure that often mirrors our provincial and federal governments.
The owners in a strata corporation can be viewed as the legislative branch of government. General meetings are like legislative sessions, but instead of representing the interests of constituents, each owner represents the interests of their strata lot. The owners in a strata corporation control the budget and generally need to approve capital and unexpected expenditures and any significant changes by three-quarters or unanimous vote.
The strata council is the executive branch of the strata corporation. Strata councils manage day-to-day affairs, spend money approved by the owners and enter into agreements on behalf of the strata corporation. Strata councils also set the agenda for most general meetings, determine whether owners have breached bylaws and rules and hear rental restriction hardship exemption applications.
Like most government bodies, strata corporations are set up to be self-policing. If owners don’t like how their building is being run, they can elect a new strata council. When strata councils or owners fail to meet their legal obligations under the Strata Property Act and the bylaws, they can call on the courts to protect their rights or require another party to fulfill their obligations.
Access to Information
Under the Strata Property Act and regulations, strata corporations must maintain a comprehensive set of records. Owners may inspect or request copies of these records and strata corporations must produce the records, subject to some limitations, within one or two weeks.
Voting and Holding Office
Generally, every owner has the right to vote at a general meeting and stand for strata council, subject to a single exception. The Strata Property Act permits a strata corporation to pass a bylaw restricting an owner’s right to vote or stand for council if the strata corporation is entitled to file a lien against the owner’s strata lot.
Only certain kind of debt are subject to a strata lien and a strata corporation must deliver a special demand for payment at least two weeks before denying an owner the right to vote or stand for council. Outstanding fines cannot be used to prevent an owner from voting or holding office.
Calling Meetings and Setting the Agenda
While a strata council can call a general meeting at any time, the Strata Property Act allows owners to call a special general meeting or require that a strata corporation include one or more resolutions on a meeting if owners representing at least 20% of the votes sign a petition requesting that one or more resolutions be put to the owners.
Where a demand is made under section 43 of the Strata Property Act, astrata corporation must call a special general meeting within four weeks and place the requested resolutions at the top of the meeting agenda. Where a demand is made under section 46 of the Strata Property Act, a strata corporation must include the requested resolutions in the agenda for the next general meeting.
Directing and Restricting Council
Owners have the power to direct a strata council to take certain action or restrict a strata council’s authority by passing a majority resolution under section 27 of the Strata Property Act.
Good Governance Protects Your Investment
In my law practice, I encourage strata corporations and owners to adopt good governance practices in order to strengthen their communities. Strata corporations and owners that obtain timely and knowledgeable legal advice are often able to avoid or minimize conflict and reduce liability while building healthy communities and a better return on their investment.
For additional information on this and other strata property topics, visit my free online strata law guide at www.stratalaw.ca. Finally, always remember that this article provides general reference information, not legal advice. If you have a legal problem, speak with a strata lawyer.
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