Protect Yourself - Reading Strata Documents Properly

Take the time to do your due diligence before you buy – 

it can save you thousands of dollars

Almost daily, CHOA advisors receive a call from a buyer claiming there is an upcoming major special levy for repairs or a condition in the bylaws that they knew nothing about. The new owner is shocked by the new information and frustrated that neither the agent nor the seller told them anything. Unfortunately, the buyers often come to realize the information was in their hands, but they failed to review the documents, they refused to obtain documents, or they ignored the risks.As a condo buyer, obtaining as many of the strata documents as possible, and taking the time to read them, is your best insurance against unexpected problems.

What to Ask For

Knowing what documents to obtain, where to get them and the critical information to look for is an essential part of the home-buying process. Most buyers begin with the Information Certificate (Form B). The strata corporation is required to provide this form within one week of a request and may charge up to 25 cents per page for the copies. The form discloses the unit’s current monthly strata fees, money owing by the owner other than amounts paid into court, any agreements an owner has signed where they have taken responsibility for the cost of any alterations, amounts owed for a special levy that has already been approved, projections of deficits, balance of the contingency fund, approved bylaw amendments not yet filed in land titles, any three-quarter votes approved but not yet filed in land titles, any court proceedings, any judgments or orders against a strata,  work orders or notices on the strata lot, number of current rentals, parking stalls and storage lockers allocated to the strata lot, rules and current budget of the strata, an owner developer’s rental disclosure establishing exemptions, and the most recent depreciation report. 
That is the basic menu of information that has to be disclosed for every strata corporation. But you should also take a look at other documents available to buyers that are rarely requested. An owner, tenant, or person authorized to request documents such as the real estate agent is permitted to request historic documents that may provide a buyer with critical information.

Digging Deeper

A copy of the insurance policy for example, is a good indication of the risks managed by the strata. If the water escape deductible is $25,000, $50,000 or $100,000, it is a good bet there have been frequent claims in the building. Your next question as a buyer is: what’s the cause? If it is a result of failed plumbing systems that need to be upgraded, special levies are on the horizon. Ask questions. It may be the upgrades are complete and it’s a matter of a few years before the deductibles come down again. As an owner, you are exposed to those high deductibles as a common expense for the strata, and personally if the cause of a flood is from your strata lot. 
The Strata Property Act also now requires strata corporations to maintain copies of any reports obtained by the strata corporation respecting repair and maintenance of major items, including engineering reports, risk management reports, sanitation reports, and environmental assessments. If there has been asbestos testing on the building, the strata must retain a copy of that report.

Go Back Two Years in the Strata Minutes

If you request and read the strata minutes of council meetings and general meetings for at least the past two years, they should provide you with a sense of the strata business. Make a list of maintenance, emergencies, long-term planning decisions, insurance claims, and funding decisions. You can cross reference them in the documents you receive. Sterile minutes where nothing happens is a strata that is generally hiding something.
"Buyer beware" for condo buyers should read, “buyer be aware.” If the strata corporation is not providing a document requested, or there is confusion about allocation of parking or storage, or there is missing information, you might want to rethink your decision. Read everything and if in doubt request more information. Five hours of your time could end up in you avoiding a $55,000 special levy.

Tony Gioventu
Condominium Home Owners Association. Courtesy of