BC Real Estate Trading Services Course Strata Properties — Questions and Answers
Question 1: What is a 'strata corporation' under BC's Strata Property Act?
- A real estate development company
- A legal entity automatically created when a strata plan is filed at the Land Title Office, consisting of all strata lot owners who collectively manage the common property (Correct answer)
- A type of homeowner's insurance company
- A municipal department that oversees condominiums
Correct answer: A legal entity automatically created when a strata plan is filed at the Land Title Office, consisting of all strata lot owners who collectively manage the common property
A strata corporation is automatically created upon the deposit of a strata plan at the Land Title Office. It consists of all strata lot owners and is responsible for managing and maintaining common property, enforcing bylaws, obtaining insurance, and administering the strata's financial affairs. Each owner is automatically a member.
Question 2: What is the difference between 'common property' and 'limited common property' in a BC strata?
- There is no difference — they are the same thing
- Common property is owned jointly by all strata lot owners, while limited common property is common property designated for the exclusive use of one or more specific strata lots (Correct answer)
- Common property is indoor space and limited common property is outdoor space
- Common property is maintained by the strata corporation and limited common property is maintained by the city
Correct answer: Common property is owned jointly by all strata lot owners, while limited common property is common property designated for the exclusive use of one or more specific strata lots
Common property (hallways, lobbies, parking garages) is shared by all owners. Limited common property (LCP) is common property designated for the exclusive use of specific strata lot owners — such as a parking stall, storage locker, balcony, or patio. LCP is still owned by the strata corporation but restricted to specific owners' use.
Question 3: What is the 'Contingency Reserve Fund' (CRF) in a BC strata corporation?
- An optional savings account for strata owners
- A mandatory fund that the strata corporation must maintain for unexpected common expense expenditures or emergencies, funded by a minimum annual contribution (Correct answer)
- A fund used only for landscaping improvements
- A government fund that covers natural disaster damage
Correct answer: A mandatory fund that the strata corporation must maintain for unexpected common expense expenditures or emergencies, funded by a minimum annual contribution
The CRF is a mandatory fund under the Strata Property Act. Strata corporations must contribute at least 10% of the operating budget annually until the CRF reaches 25% of the total annual budget. It is intended for unexpected or emergency expenses related to common property, such as urgent plumbing repairs or emergency structural work.
Question 4: What information must be included in a Form B Information Certificate when selling a strata lot in BC?
- Only the sale price and closing date
- Financial information about the strata, including monthly fees, CRF balance, outstanding lawsuits, special levies, bylaws, and any rental or age restrictions (Correct answer)
- Only the square footage and number of bedrooms
- The names and contact information of all strata lot owners
Correct answer: Financial information about the strata, including monthly fees, CRF balance, outstanding lawsuits, special levies, bylaws, and any rental or age restrictions
A Form B Information Certificate provides critical information about the strata corporation including: monthly strata fees, CRF balance, any outstanding or pending special levies, lawsuits against the strata, parking and storage allocations, bylaws and rules, rental and age restrictions, and any required repairs. Buyers rely heavily on this document.
Question 5: What is a 'special levy' in a BC strata corporation?
- A monthly maintenance fee increase
- A one-time charge approved by the strata corporation to fund a specific expense that exceeds what the operating fund or CRF can cover, requiring a 3/4 vote (Correct answer)
- A penalty for bylaw violations
- A government tax on strata properties
Correct answer: A one-time charge approved by the strata corporation to fund a specific expense that exceeds what the operating fund or CRF can cover, requiring a 3/4 vote
A special levy is a one-time charge to fund a specific expense, such as a major roof replacement, building envelope repair, or elevator modernization. It requires approval by a 3/4 vote at a general meeting. The levy is allocated among owners based on their unit entitlement. Owners who purchased after the levy was approved are still responsible for their share.
Question 6: What is a 'depreciation report' and is it required for BC strata corporations?
- A report on the property's declining market value
- A report estimating the remaining life and replacement cost of common property components, required for most strata corporations with 5 or more lots at least every 3 years (Correct answer)
- A tax document showing the building's annual depreciation
- A report only required for strata corporations over 20 years old
Correct answer: A report estimating the remaining life and replacement cost of common property components, required for most strata corporations with 5 or more lots at least every 3 years
A depreciation report (similar to a reserve fund study) estimates the remaining useful life and replacement cost of major common property components. Strata corporations with 5 or more lots must obtain one at least every 3 years, prepared by a qualified professional. It helps with long-term financial planning and adequate CRF funding.
BC Real Estate Trading Services Course Strata Properties
What is a 'strata corporation' under BC's Strata Property Act?