Tip #1: Review all relevant strata documents before purchasing a property.
One of the most common mistakes made by prospective strata home purchasers is failing to adequately review strata documents before completing their purchase. Ignorance is no excuse when it comes to abiding by the strata corporation’s bylaws and rules as they form a contract between an owner and the strata corporation that the owner enters into upon the purchase of their strata lot. Nevertheless, many owners will remain in the dark until they receive a breach letter from their strata corporation alleging a contravention. Insufficient attention prior to a purchase may lead to other nasty surprises later such as the discovery of a recently passed special levy for repairs to the common property for which the purchasers did not budget.
A good starting point is to request a “Form B” Information Certificate from the strata corporation prior to your purchase. The Form B discloses a variety of important information about the strata lot and the strata corporation including the monthly strata fees payable by the owner, any outstanding amounts owed to the strata by the owner, any agreements by which the owner took responsibility for alterations to the strata lot or to common property, any amount that the owner is obligated to pay in the future for a special levy that has already been approved and any amendments to the bylaws that are not yet filed in the Land Titles Office.
You should also take the time to review copies of recent strata council meeting minutes as well as the minutes of the past few Annual General Meetings (AGMs) and Special General Meetings (SGMs). Finally, prior to completing any purchase, you should review and consider the impact that the strata corporation’s existing bylaws may have on your intention to purchase. Pay particular attention to any rental restriction or prohibition bylaws as well as any pet restrictions.
Tip #2: Do not confuse the obligation to repair your strata lot with legal liability or the strata corporation’s duty to insure.
It is a bitter pill for any owner to swallow when their strata lot is damaged by the actions of a third party and the strata corporation refuses to undertake the necessary repair work on the owner’s behalf. While you may not be legally liable for causing the damage, your bylaws may still require you to undertake the repair work to your strata lot.
If the damage to your strata lot exceeds the deductible amount of the strata’s insurance policy, the strata corporation will ordinarily make a claim under their own policy and will seek to recover only the payment of the deductible from you. However, with exceedingly high deductibles, the repair costs of the damage may not exceed the deductible of the strata’s own insurance policy. In this case, your only recourse may be to make a claim against your own home owner insurance policy or otherwise to cover the repair costs yourself and to take legal action against the third party who caused the damage to your strata lot.
Given the complexity involved in resolving such repair issues, it is best to immediately retain the services of a lawyer to advise you before a dispute with your strata corporation escalates and results in fines and/or legal action against you.