BC Real Estate Trading Services Course Strata Properties (Condominiums) Questions and Answers — Questions and Answers
Question 1: A prospective buyer is reviewing the documents for a strata unit in Vancouver and notes that the parking stall is designated as 'Limited Common Property' (LCP). What does this designation mean for the buyer?
- The buyer will own the parking stall outright as a separate titled property.
- The strata council can reassign the parking stall to another owner upon providing reasonable notice.
- The buyer will have the exclusive right to use that specific parking stall, and this right is attached to their strata lot. (Correct answer)
- The parking stall is common property available on a first-come, first-served basis to all residents.
Correct answer: The buyer will have the exclusive right to use that specific parking stall, and this right is attached to their strata lot.
Limited Common Property (LCP) is common property that has been designated for the exclusive use of one or more specific strata lots. This right is attached to the strata lot and transfers with the sale of the unit. The strata corporation still owns the LCP, but the owner of the designated strata lot has the exclusive right to use it. Reassigning LCP is a complex process and generally requires a resolution passed by a 3/4 or unanimous vote, not a simple decision by the strata council.
Question 2: A strata corporation in British Columbia needs to fund a major, unbudgeted roof replacement costing $250,000. The Contingency Reserve Fund (CRF) is insufficient to cover the full amount. What is the standard procedure the strata corporation must follow to raise the necessary funds?
- The strata council can approve a special levy by a majority vote at a council meeting.
- The strata corporation must obtain a bank loan, which only requires a majority vote of owners at an AGM.
- The strata corporation must pass a resolution for a special levy, which requires a 3/4 vote at an annual or special general meeting. (Correct answer)
- The monthly strata fees for all owners are automatically increased until the required funds are collected.
Correct answer: The strata corporation must pass a resolution for a special levy, which requires a 3/4 vote at an annual or special general meeting.
Under the Strata Property Act, a special levy is used to raise funds for common expenses that were not included in the annual budget or exceed the CRF. To approve a special levy, a resolution must be passed by at least a 3/4 vote of the owners at a properly convened annual or special general meeting. The resolution must state the purpose, total amount, how each owner's share is calculated, and the payment date(s).
Question 3: Which of the following documents is NOT required to be attached to a current Form B Information Certificate in British Columbia?
- The current budget of the strata corporation.
- The minutes from the last three Annual General Meetings. (Correct answer)
- The rules of the strata corporation.
- The most recent depreciation report, if one has been obtained.
Correct answer: The minutes from the last three Annual General Meetings.
The Strata Property Act, Section 59, specifies the documents that must be attached to a Form B. These include the strata corporation's current budget, the rules, a summary of insurance coverage, and the most recent depreciation report (if any). While a buyer should review AGM minutes, they are not a required attachment to the Form B itself and must be requested separately.
Question 4: Effective November 1, 2023, what is the minimum annual contribution a strata corporation in BC must make to its Contingency Reserve Fund (CRF) when approving the annual budget?
- 5% of the total amount budgeted for the operating fund.
- An amount equal to the annual insurance deductible.
- 10% of the total amount budgeted for the operating fund. (Correct answer)
- Whatever amount is recommended in the most recent depreciation report.
Correct answer: 10% of the total amount budgeted for the operating fund.
As of November 1, 2023, the Strata Property Regulation was amended to increase the minimum required annual contribution to the CRF. Strata corporations must contribute at least 10% of the total amount budgeted for the annual operating fund to the CRF. This is a mandatory minimum, though many stratas contribute more based on the recommendations in their depreciation report.
Question 5: In a BC strata corporation, the strata council wishes to implement a new regulation prohibiting the use of personal barbecues on all balconies. Which of the following statements correctly describes how this can be legally enforced?
- The strata council can create a 'rule' and enforce it immediately without owner input.
- This restriction can only be implemented as a bylaw, which must be approved by a 3/4 vote of the owners and filed with the Land Title Office. (Correct answer)
- As it relates to safety, the strata manager can issue a notice that makes the regulation effective immediately.
- A simple majority vote of the strata council is sufficient to create a new, permanent bylaw for this purpose.
Correct answer: This restriction can only be implemented as a bylaw, which must be approved by a 3/4 vote of the owners and filed with the Land Title Office.
A restriction on the use of a strata lot (such as a balcony) must be implemented as a bylaw, not a rule. Rules can only govern the use of common property and assets. Creating or amending a bylaw requires a resolution to be passed by a 3/4 vote of the owners at an annual or special general meeting. To be enforceable, the new bylaw must then be filed with the Land Title Office.
Question 6: Under recent changes to the Strata Property Act in BC, what is the status of depreciation reports for strata corporations with five or more lots?
- They are optional but highly recommended by BCFSA.
- They are mandatory, but the requirement can be waived annually with a 3/4 vote of the owners.
- They are mandatory, and the option for owners to vote to defer obtaining one has been eliminated. (Correct answer)
- They are only required if the strata corporation is more than 10 years old.
Correct answer: They are mandatory, and the option for owners to vote to defer obtaining one has been eliminated.
Effective July 1, 2024, significant changes were made to depreciation report requirements in BC. All strata corporations with five or more lots must now obtain a depreciation report on a five-year cycle. The previous provision that allowed strata corporations to waive this requirement with an annual 3/4 vote has been removed.
BC Real Estate Trading Services Course Strata Properties (Condominiums) Questions and Answers
A prospective buyer is reviewing the documents for a strata unit in Vancouver and notes that the parking stall is designated as 'Limited Common Property' (LCP).
What does this designation mean for the buyer?