Strata Housing More Than Condos

Strata are usually associated with condos or condominiums but there are many different types of strata housing such as townhouses, duplexes, and even single-family homes on a bare land strata subdivision. 


What defines a strata isn’t the building type or size, instead, it's based on the legal nature of its creation. When the developer files a strata plan at the Land Title Office, a strata corporation is formed. A strata development can then be divided into separately owned units called “strata lots” based on the strata plan which divides a building or parcel of land into individually owned parcels. The parcels not owned by a single individual will be called common property which each strata lot owner will own a percentage. This allows individual owners to own their personal lots along with a share of the common property.  This means that every individual owner is also a member of the STRATA CORPORATION. 


Types of Stratas


Freehold Strata

Stratas can either be freehold or leasehold. In the case of a freehold strata development, the individual owners hold a fee simple title to their personal strata lots. A fee simple title grants the owner of the property exclusive rights on the property, which means they own the property completely and without any limitations or conditions aside from taxation, zoning or building restrictions. A fee simple title is the highest form of land ownership recognized in Canada. Having a freehold strata means that you have the right to sell the property whenever you want, as you exclusively own your strata lot. 


Leasehold Strata

In a leasehold strata development, you don’t own the property, instead, you hold a leasehold interest of the strata lots for a specific term, usually 50 or 100 years. Instead of being an owner, you are technically a tenant. However, you will still be registered on title and are treated as owners under the strata corporation. When you decide to sell your leasehold strata, you are selling your leasehold interest in the strata lot to the next leasehold buyer. 


Leasehold strata developments aren't very common, however, if dealing with a leasehold development you must be extra careful to fully understand what you are buying into. The market value of leasehold strata is usually much less compared to freehold strata lots. 


Strata Lot Owners Rights

Freehold strata owners own the strata lot defined in the strata plan. The strata lots boundaries are usually at the center of walls, ceilings, and floors. This means that freehold strata lot owners have the full right to change and renovate their personal strata lot if it doesn’t affect the common property.


Strata owners also share a percentage of the common property and common assets of the strata corporation based on the unit entitlement as tenants in common


Some of the major rights of strata lot owners include:

- the right to vote at the general meeting

-obtain certain records from the strata council

-directing the actions of the strata council by majority vote

-limiting the power of the strata council

-seeking court action to prevent unfair acts of the strata corporation. 


Strata Lot Owners Responsibilities

Some of the major responsibilities and rules strata lot owners must follow are:

-strata lot owners are responsible for paying for their regular strata fees based on their unit entitlement. 

-responsible for maintaining and repairing their personal strata lot, and limited common property. 

-comply with the bylaws and rules of the strata corporation

-reasonably use the property as not to make a nuisance to others

-pay special levies to the strata corporation if they have been approved 


Strata Corporation and the Strata Council 

A strata corporation is a legal entity created through a strata plan in which all the strata lot owners act as a single entity. This means that the strata corporation can enter contracts, hire, and be sued like a normal person. 


The strata corporation is responsible for managing and maintaining the common property and assets of the strata development on behalf of you, the owners. The owners will also elect an executive body for the strata corporation called the strata council. Any owner can be elected into the strata council as a representative of all the strata lot owners. The role of the strata council is to act as the managing body of the strata corporation to make sure it operates smoothly on behalf of the owners. It is common for the strata council to hire a property manager to assist the strata corporation. 


These responsibilities of the strata corporation include:

-preparing, and managing various records such as depreciation reports

-holding general meetings

-maintaining and repairing the common property

-maintaining funds 

-paying common expenses

-preparing budgets

-obtaining property insurance


Strata Bylaws and Rules

All strata corporations must have bylaws and may or may not have certain rules. All the bylaws apply to the owners, tenants, and people visiting the strata. Bylaws can cover both personal strata lots and. Bylaws are created to control, manage, and maintain the well-being of the strata lots along with the common areas. 


Every strata uses the Standard Bylaws developed by the provincial government as the default. However, stratas often deviate a little bit from the default bylaws to better reflect the values and opinions of the owners. The most common changes from the standard bylaws include pet restrictions, rental restrictions, and strata lot renovation restrictions (written approval from the strata council for major renovations). 


Rules differ from bylaws by the fact that rules can’t govern the use of strata lots, only bylaws can govern the use of strata lots. Instead, rules are used to control the use, safety, and maintenance of common property and assets. 


Strata Fees

Since all owners share the common property as tenants in common, each strata lot owner must pay strata fees to cover the budget for the common expenses in running a strata corporation. Strata fees and the annual budget are approved by a majority vote each year at the annual general meeting. Strata fees are usually paid monthly and will include contributions to both the operating fund and the contingency reserve fund. Strata fees are calculated by dividing the expenditures of the strata corporation among all the strata lots based on unit entitlement. 


Unit Entitlement

Unit entitlement is a number given to each strata lot that determines how much of the common property and assets belong to them. This number in residential buildings is usually determined by the habitable area of a strata lot. This means that a large condo will have a higher unit entitlement and must pay higher strata fees compared to a smaller condo. 


Operating Fund

The operating fund is used for commonly shared expenses that happen once a year or more. This includes landscaping, cleaning, property management, yearly insurance, and minor maintenance. 


Contingency Fund

The contingency fund is used for common expenses that occur less than once a year. This includes potential upgrades and repairs to the roof, elevator, or road repaving. The needs of the contingency fund are usually known beforehand by the required yearly depreciation report. The depreciation report helps strata owners plan and pay for repairs over a 30 year time period. 


Special Levies 

A special levy must be approved by a majority approval by at least ¾ of all the strata corporation owners. Once the special levy is approved, each strata owner is charged with an additional one-time fee along with their normal strata fees. A special levy is only used for a shared common expense when the expenditure isn’t included or anticipated in the annual budget or if there are insufficient funds in the contingency fund to pay for it. Special levies are commonly used to pay for unexpected damage to the roof, the plumbing system, windows, and major leaks.