Making the Purchase

The Strata Concept

The strata concept is quickly becoming a popular alternative to the traditional family house. Buyers are discovering the value and lifestyle benefits of stratified living; the same budget that will buy a house with many up-gradable features will buy you a brand new townhouse. And being away is much easier as your lawn in mowed, structure insured, exterior maintained, and neighbourhood secured.

Strata Developments appear in several different forms: apartments, row-houses, individual houses, cabins, condominiums, commercial outlets, etc. They can be stacked vertically, joined horizontally, or separated into independently standing structures; consist of one floor plan and usage type or be a complete mix. Regardless of the number of “parts” or the structural make up, the concept is the same.

Historically, the law allowed property owners to subdivide their land into two or more separate pieces and sell each piece to individual owners. In 1966, the same concept was applied to buildings creating the strata concept.

Strata Developments are generally made up of 2 main components: Strata Lots and Common Property.

Strata Lots are the “parts or pieces” that are independently owned by individual parties. Each Strata Lot is a Fee Simple Interest comparable to a non-stratified property. It can be bought, sold, inherited, financed, and insured.

What makes a Strata a Strata is the Common Property. Because certain components are shared such as the roof, foundation, exterior structure, grounds, driveway, parking lot, etc. (this will vary) these items are considered common and require a form of government. A Strata Corporation owns the Common Property and as a Strata Lot Owner, you are a member of the Strata Corporation owning an undivided share.

*A simple way to look at a Strata Development is that the Strata Corporation is the town to which you are a tax payer, an entitled voter, and an interest holder; and your Strata Lot is your house within the town.

The Strata Corporation is responsible for the common property including insurance and maintenance. Although every Strata is operated differently, common responsibilities of the Corporation include: garbage removal, snow removal, grounds keeping, and water & sewer. The Corporation pays one large expense bill for each utility on a periodic bases and each Strata Corporation Member is responsible to pay a fee for use of these utilities.

Unit Entitlement is a Strata Corporation Member’s “piece of the pie” and is based on a strata lot’s square footage. Generally speaking, the more square footage a Strata Lot Owner acquires, the larger the Unit Entitlement as a Strata Corporation Member. Unit Entitlement will determine each Strata Corporation Member’s share of utilities, liabilities, contribution to contingency reserve, any special levies, and reimbursement upon destruction. Regardless of Unit Entitlement, each Strata Corporation Member’s voting right is equal.

A Strata is not a Co-op, can be developed on leased land creating a Leasehold interest, and is not subject to the Strata Property Act if located on First Nations lands. Buyers are advised to seek legal advice if purchasing Leasehold interests or interests within First Nations lands.