Script 407 gives information only, not legal advice. If you have a legal problem or need legal advice, you should speak to a lawyer. For the name of a lawyer to consult, call Lawyer Referral at 604.687.3221 in the lower mainland or 1.800.663.1919 elsewhere in British Columbia.

What are condominiums, townhouses, and strata lots?
We usually think of a condominium development as having stacked housing units, like an apartment block, and a townhouse development as having side-by-side, semi-detached units. But in legal terms, a condominium or townhouse refers to a type of legal ownership, not the building structure.

A condominium or townhouse development is one that’s been legally subdivided. Each condo or townhouse owner owns a specific housing unit, called a “strata lot”. The unit owners also own an interest in the “common facilities”, which is property owned by all the unit owners. Common facilities typically include the hallways, stairs, underground parking area, and sometimes, a recreation centre.

A strata lot may also have attached to it a parcel of “limited use common property” – such as a patio, balcony, parking space, or storage locker – which you don’t own, but which you have the right to use for just yourself, subject to certain restrictions.

There are also “bare land strata title developments,” usually these are building lots in new subdivisions. You can also buy strata lots of bare land in mobile home parks or recreational properties, such as campsites.

What should you consider before making an offer to buy?

1. The monthly maintenance fees for the common facilities – check the common facilities such as swimming pools, tennis courts or other recreational facilities, and decide how much you will use them. Maintaining these facilities can be expensive. As a strata lot owner, you’ll have to pay your share of their upkeep through your monthly maintenance fee, even if you don’t use them.
2. The condition of the building – if the development is in poor repair, you’ll have to pay your share of the cost to fix it. Look at the minutes of the meetings of the strata corporation members (who are the owners of the individual strata lots) to see if any major repairs have been made or are planned. You could be responsible to pay for assessments that have been previously approved, but not yet implemented.

3. The type of ownership: “freehold” or “leasehold” interest – in most condominiums, the owners of the strata lots or housing units also own an interest in the land. Their interest is considered “freehold”. But in some developments, the strata lot owners only lease the land. The lease may last for 50 to 99 years. During the lease term, unless the land lease has been prepaid, the owners typically pay a monthly lease payment in addition to their monthly maintenance fees. When the lease ends, ownership of the property (including all of the units built on the land) goes back to the holder of the lease. This can decrease the value of the property and any unit you’re thinking of buying, particularly as the end of the lease approaches.
   
   If you plan to buy a condo or townhouse on leased land, you should first get a copy of the lease and have your lawyer review it before you make an offer to buy.

4. The bylaws and rules – read them carefully and understand them before you buy. The BC Strata Property Act includes detailed bylaws that apply to all property and operations of every condominium. Bylaws set out the duties of owners, tenants, occupants, visitors, the corporation and the strata council, as well as the procedures at council and general meetings. They also allow the strata corporation to penalize owners who violate the bylaws. As well, the bylaws provide for voluntary dispute resolution. Copies of the bylaws may be registered at the Land Title Office.
   In addition, each condominium may have its own set of rules. They apply only to the use and enjoyment of common property and common facilities.
   Bylaws and rules spell out your rights and responsibilities and control what the place will be like to live in. Bylaws normally restrict or prohibit the renting out of units in the building. This is important: if you plan to live in your unit, you may want the other owners to live in their units too and not be allowed to rent them out. On the other hand, you won’t want the bylaws to prohibit renting if you’re buying the unit as an investment to rent out.
   Bylaws may also restrict or prohibit pets and certain age groups, such as children. Bylaws and rules may control the size of your patio and regulate the use of the recreational facilities and other common property. Even if you understand the bylaws and rules before you buy, they can be changed at any time, if enough of the owners agree. Also, if you want to make changes to your condo unit that will affect other owners, or outside changes, which can be seen by other owners, you will probably need permission from the strata corporation.

5. The financial statements of the strata corporation – the strata corporation is made up of all of the owners of the strata lots or units in the development. The strata corporation produces financial statements. By examining them, you can see how much your monthly maintenance fee will be, what it includes, and where all the money goes. The statements will also show whether there are any special assessments to cover major expenses such as repairs. Also, find out how much is in the emergency reserve fund and whether any major renovations are planned, because as an owner, you would have to help pay for them.

6. The registered strata plan – this will show what property you will be responsible for and the costs connected with it. Compare your share of the costs and liabilities to the shares of the other units in the strata plan. The strata plan is on file with the Land Title Office. As well, ask about any alterations (changes) that have been made to the development that you may be responsible for. The strata council has to disclose them on Form B.
7. Any restrictive covenants or easements – they may affect your ability to sell, rent, use, lease, or dispose of your property.
8. The Disclosure Document filed by the developer – ask for a copy of it if you’re buying a new condominium.

Put all your questions in writing and get written answers from the seller and the strata council.

Using a lawyer is a good idea
Before making an offer to buy a condominium, townhouse or strata title property, you should have a lawyer review the legal title to the property, the bylaws, and the agreement of purchase and sale, together with all related documents. If you can’t see a lawyer before you make an offer, then add a sentence to your offer saying it is subject to your lawyer’s approval. Then take the offer to your lawyer before you remove any of the “subject to” clauses. A condo or townhouse is an expensive purchase and the process of buying one is complicated. Mistakes can be very costly. So it makes sense to use a lawyer.

More information
Refer to script 401, called “Owning a Condominium”. Because buying a condo or townhouse is very similar to buying a house, you should also refer to script 406, called “Buying a House.” It outlines many important topics not covered here, including “subject to” clauses, title searches, fraud risks, property inspections, the statement of adjustments, and more.

If you need financing, refer to script 408, called “Mortgages and Financing a House Purchase”.

[updated July 2007]

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