At the core of every strata purchase is the information buyers rely on in order to determine the status of the strata and make a decision.
One of the biggest, unforeseen, issues I have faced since starting Condo Clear is obtaining access to the appropriate documents. Nearly every review we receive (90% plus) we do is missing important information which begins the often-daunting task of requesting additional documents from the strata and/or their management company.
Realtors are aware of the main documents needed such as the Form B, Depreciation Report, and Two years worth of minutes; however, there are some lesser known, but equally important pieces that we find ourselves requesting on a regular basis:
- Current Form B – Many times we receive a Form B that is months old, and we have even received push-back from people in the industry that believe a Form B is valid for 30, 60, or 90 days. This is not the case. A Form B is merely a snapshot of the strata corporation for that specific period of time and could change the next day. Having an updated Form B may mean that you need to obtain a new one multiple times; but that is the only way to ensure no significant changes have happened. I often advise listing Realtors to request a Form B initially, and then request another one as soon as there is an accepted offer. If you want to be proactive you may want to request a Form B every month. The cost is limited to $35 (if no rush fees are applied) which, is typically a lot cheaper than paying for a one or two day rush if you find yourself in a tight deadline.
- Insurance Certificate – Having the appropriate insurance is a requirement for every strata corporation and it is often assumed that is the case; however, we often see policies that are subject to a co-insurance cause, which may mean the strata is under-insured, or have high deductibles which may require additional personal insurance or indicate a high loss history due to water leaks, etc. This is a document that I believe should be mandatory with the Form B yet it is often overlooked and this is more important now more than ever with the current issues surrounding insurance coverage in strata corporations.
- Current Financial Statements – Most management companies do provide a copy of the most recent financial statement and balance sheet (if applicable); however, some do not, and many self-managed strata corporations only provide the year end financials. Having up-to-date financials provides a much better picture of where the strata corporation is financially, especially in relation to their depreciation report.
- AGM/SGM Notices – Typically we don’t have a problem getting the minutes themselves but often we do not receive the notice packages. Under the Act the strata corporation is required to provide notice of the AGM/SGM to the owners and this notice may contain certain pieces of important information that often don’t make it into the minutes. This may include:
- A copy of the insurance certificate;
- Proposed budget;
- Year-end financials; and,
- Reports from the council and/or contractors.
- Form V: Schedule of Unit Entitlement – This has become a relatively new practice for us. In most document packages we receive a copy of the fee schedule that the strata corporation uses to determine each units share of the strata fees; however, in the past year we have come across multiple strata corporations that were not calculating their strata fees properly. In most cases it is a matter of a few dollars difference in their strata fee but over time this can add up to a significant sum of money, especially if any kind of large special levies are expected. We now double check these calculations in order to ensure buyers are paying their appropriate share of the common expenses.
- Engineers Reports – This one can be a little more challenging as we often don’t know if they exist until a review of the documents has been done. These can contain material information that often effect a buyer’s decision. The reports could relate to major building repairs or projects that are coming up, or have already been completed but in either case, it is one of the most important documents for a buyer to review.
The best way to avoid a lack of information is to request all the documents right up front. Some management companies may push back and say things like “We never provide these documents.” or “We have never had a request for this before.” but ultimately they are required to provide the documents requested.
For your reference, the following is a list of documents we recommend requesting with every transaction:
- Current Form B – Within 30 days;
- Current Financial Statement – Within 60 days;
- Latest Depreciation Report (Should come with the Form B);
- Insurance Certificate;
- Rental Disclosure Statement (should come with the Form B);
- Registered Bylaws;
- Rules (should come with the Form B);
- Strata Plan;
- Form V: Schedule of Unit Entitlement;
- AGM/SGM Minutes – Two years;
- AGM/SGM Notices – Two years;
- Council Minutes – Two years; and,
- Any Engineers Reports.
Condo Clear Services Inc. is a fully licensed brokerage under the RECBC that specializes in supporting strata buyers through reviewing and summarizing strata documents.
Ryan Stenquist & Magurel Mic