Step 1 - Read the Strata Bylaws
Stratas have rules that limit what you can do even inside your apartment. Rental restrictions, pet restrictions and age restrictions are the big ones. But bylaws can restrict your renovations and tell you what you can and cannot do - right down to the colour of your curtains. Carefully review the bylaws to make sure that they are right for you.
Step 2 - Read the Form B Information Certificate
The Form B Information Certificate will tell you what your monthly strata fees are, if there are any special levy payments owing, what parking stalls and/or storage lockers are yours, and whether the strata is involved in a court case.
Step 3 - Read the Strata Minutes
You should always get the last two years of Annual and Special General Meeting Minutes and Council Meeting Minutes. It is very important to review each set of minutes to get an idea of what the strata’s issues are. Are there any big ticket repair items: a new roof, a new elevator or hot water boiler. If there are, you may be looking at a huge special levy. This also gives you an idea about how the strata corporation is run.
Step 4 - Read the Depreciation Report
A Depreciation Report gives you an idea of what repair and maintenance jobs are coming due and what the potential cost of those items will be. It will tell you if the strata has enough funds to cover those obligations and if not options for funding upcoming repairs. An important point to note is that the engineers who usually do the reports can get into trouble if they undervalue an upcoming repair or minimize it’s necessity so they tend to price the repairs high. Take it with a grain of salt and realize that an upcoming repair may not be as expensive as quoted or even necessary. The Depreciation Report helps strata corporations plan for the repair and replacement of common property components. Not all buildings have a Depreciation Reports, they are NOT mandatory. Banks like Depreciation Reports because it helps them assess mortgage risk.
Step 5 - Read the Financial Statements
How much is in the Contingency Reserve Fund? How much is owing to the strata? The smaller the Contingency Reserve Fund, the less the strata has for big ticket items or emergency repairs. Most stratas don’t have enough money in their contingency fund. If you are buying into an older strata that hasn’t replaced its roof, doors, windows, or elevators in a long time, those items may need replacement soon and you will have to pay for those repairs in the form of a special levy rather than using the Contingency Reserve Fund.
Step 6 - Get a good, local realtor how can walk you through all of this
Interested in a great worry free strata building? Check out this Open House this weekend
With credit to Taeya Fitzpatrick, October 27, 2017