The Role and Responsibilities of a Strata
Corporation
1. The Creation of the Strata Corporation
A strata corporation is created to divide a building(s) and/or
a parcel of land into
separate components individually owned and common components
owned by all
of the owners.
The strata plan will show the separately and commonly owned
components of the
building(s) and/or land:
- separately owned components are referred
to as “strata
lots”; and
- commonly owned components are referred
to as “common
property”.
A strata corporation is a legal entity created
by the deposit of a strata plan in the
Land Title Office.
The Land Title Office will assign a number to the strata
corporation. This will
become the legal identity of the strata corporation. Examples
of strata corporation
numbers are LMS 1234 or KAS 9876.
The name of the strata corporation is “The Owners,
Strata Plan, (the registration
number of the strata plan)”.
Strata corporations are created under the Strata Property
Act (the “Act”), and not
the Company Act. This means that there is no incorporation
certificate for a strata
corporation, and the Registrar of Companies does not regulate
strata corporations.
2. What is a Strata Corporation?
The strata corporation is a legal entity with all of the
powers of a natural person
who has full capacity. This means that it can sue others,
be sued by others, enter
into contracts with others and hire employees.
The owners of the strata lots are the members of the strata
corporation.
If a strata corporation is responsible for paying a judgment,
the owners are
personally liable to pay a portion of the judgment in proportion
to their unit
entitlement.
A strata corporation does not have limited liability like
a company.
3. What Does a Strata Corporation Do?
The strata corporation is responsible for managing and
maintaining the common
property and assets of the strata development for the benefit
of all of its owners.
The specific obligations of the strata corporation are
usually performed by the
strata council, or agents or employees which it hires.
Additionally, the strata council will also perform its
own obligations which are
imposed by the Act and Regulations on the strata council,
and will benefit the
strata corporation.
The specific obligations of the strata corporation which
are set out in the Act and
Regulations are:
- preparing, retaining and making accessible
various records;
- holding general meetings, or obtaining the
appropriate waiver of general
meetings;
- giving notices of general meetings;
- preparing “Information
Certificates” (Form
B) and “Certificates of Payment”
(Form F);
- ensuring that the strata corporation address
is correct at the Land Title Office;
- maintaining and repairing
common property, except any limited common
property that the owners may have to maintain
under the bylaws;
- complying with work orders which deal with
common property;
- maintaining a contingency reserve fund which
is accounted for separately
from the operating fund;
- paying common expenses;
- determining the amount
of contributions which owners must make to the
operating fund and the contingency reserve
fund;
- preparing annual budgets;
- informing owners of
any changes to strata fees;
- obtaining adequate insurance coverage;
and
- informing owners if the strata
corporation is sued.
4. Strata Corporation Decision Making
Decisions of the strata corporation are made by either
the eligible voters in the
strata corporation or the strata council in the
following manner:
- the Act or Regulations may require that
a matter be resolved by a unanimous
vote. These decisions must
be made by all the voters in
the strata corporation;
the Act or Regulations may require that a matter be
resolved by a ¾ vote.
These decisions must
be made by ¾ of
all the eligible voters
who are present
in person or by proxy at
a general meeting, and
who have not abstained
from
voting;
- the Act or Regulations may require that a matter be
resolved by a majority
vote of the strata
corporation (e.g. approving
budget, directing or
restricting
council, ratifying rules, continuing first strata management
contract). These
decisions must be made by more
than half of all the eligible
voters who are
present in person or by proxy at a general meeting, and
who have not
abstained from voting;
- if a matter is not required by the
Act or Regulations to be decided by a
specific vote of the strata
corporation it can be resolved
by a majority vote of
the strata corporation even if the matter is usually decided
by the strata
council. These decisions must
be made by more than half of
all the eligible
voters who are present in person or by proxy at a general
meeting, and who
have not abstained from voting;
- any matter that is not required by the Act or Regulations
to be resolved by a
specific vote of the strata
corporation, or has not already
been resolved by the
strata corporation, can be made by the strata council.
These decisions usually
relate to the daily management of
the strata corporation.
5. Democratic Principles
Strata corporations are democratic, and run on
democratic principals, such as the
following:
- equal voting:
- usually, each residential strata lot will have one
vote; and
- usually, commercial
strata lots will have a vote
that may be less or greater
than one, but it will be
in proportion to its size
compared to the average
size of other residential (in mixed developments)
or commercial lots.
- election of representatives:
- at every annual general meeting, the owners will elect
a strata council to
manage the strata
corporation.
- majority rule:
- if an issue is before the strata corporation at a
general meeting, the owners
can direct and control
the strata council with
a simple majority vote,
unless the Act requires that a matter be approved by a
vote by persons
holding ¾ or
all of
the votes.
- right to raise issues:
- owners can add matters to a general meeting agenda,
if they can get
persons holding
25% of the votes
to agree to it;
and
- owners can requisition a special general meeting for
a particular purpose if
they can get persons holding
25% of the votes to agree to
it.
6. Community Interest of Strata Corporation
A strata corporation creates a community of strata owners.
The right
of an owner
to use and enjoy
his or her property
will be limited
by rules, bylaws
and decisions
of the strata corporation which are in the community interest.
The obligations and limitations placed on a strata lot
owner may be significantly
greater than an owner
who lives in a non-strata
titled house.
For instance:
- strata lots may be separated by interior walls, floors
and ceilings that are just
several inches thick, and
the strata corporation
may have bylaws which are
intended to control noise, such as a bylaw prohibiting
the installation
of
hardwood flooring;
and
- a roof may be in need of repair, but an owner wishes
to put off the repair, as
he or she cannot afford
to pay his or her
share of the repair. The strata
lot
owner may have no
choice but to pay
the special assessment
for the repair, as
getting the roof fixed is in the community
interest and an obligation of the
strata corporation.
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