WHAT IS THE BEST WAY TO REVIEW THE DOCUMENTS?

Start With The Form B

This will offer you a quick glimpse at items you may need to investigate within the strata minutes.

Bylaws

Bylaws are very important to review. It is also important that you are aware of all of your clients’ needs to make sure you address any bylaws that may affect the use of the property for a potential buyer.

Strata Plan

• You must confirm the square footage for the property on the Strata Plan.

• Professional measurements can often be more than the strata plan square footage. This must be disclosed to the client.

• To convert Sq meters to Sq feet x 10.7639

AGM & SGM’s

• I would review the SGMS and AGMS that have been provided first.

• Review from the latest date to the most present meeting.

- This allows you to review any big items of conversation or potential large items of repair, maintenance and future expenditures.

• Reading the AGM and SGM first will allow you to better understand some of the topics in the individual minutes better.

2 Year Of Minutes

• Start from the latest date you have and read the minutes forward.

• We are looking for issues, recurring problems and most importantly not IF there are issues but rather how well does the strata deal with issues.

• You want to look for patterns or recurring issues within the strata.

• Pay particular notice to complaints and what they are for and why they are occurring.

• Does the subject property have any concerns about these complaints?

• What items are often talked about but never resolved?

• It could be as simple as seeing lots of complaints about barking dogs, your client has a dog that barks often. This is something you should bring forward.

• To make sure you have received all minutes refer to the start of each document.

• Each set of minutes will state approval of the previous meeting. Make sure that is a document you received. Then they will post at the end of each meeting when the next expected meeting is. I would keep a ledger to make sure you have a complete set of minutes.

Strata Corporation Financials

Reviewing the financials of a strata corporation is important for several reasons:

Financial Health: Reviewing the financials allows the owners to assess the financial health of the strata corporation, including its revenues, expenses, and reserves. This can help identify any financial issues or problems that need to be addressed, such as a budget deficit or insufficient reserve funds.

Budget and Operating Plan: Reviewing the financials allows the owners to understand the budget and operating plan for the coming year, and to make sure that they are realistic and comprehensive.

Reserves: Reviewing the financials allows owners to evaluate the adequacy of the strata corporation’s reserves, which are funds set aside for future repairs and replacements of the common property.

Transparency: Reviewing the financials allows the owners to see how their money is being spent and make sure that the strata council is transparent in their actions and expenses.

Planning: Reviewing the financials can help the owners plan for future expenses or improvements, and make sure that the strata corporation is financially stable and sustainable.

Compliance: Reviewing the financials allows the owners to make sure that the strata corporation is in compliance with local strata laws and regulations, including accounting and financial reporting standards..

ENGINEERING & DEPRECIATION REPORTS

It is very important to not only review all building reports but also to make sure you have received all copies of any reports.

When you are reviewing the minutes for the building there will be evidence of any discussions on major projects. If they mention any report provided to the Strata Corporations minutes then you need to request a copy to get further information.

WHAT IS THE DIFFERENCE BETWEEN AN ENGINEERING OR CONSULTANTS REPORT AND A DEPRECIATION REPORT?

An engineering or Consultants reports are usually concerning a specific problem or issue ie) parking membrane /roof/ water ingress etc.

A depreciation report is required under the Strata Property Act. So almost every strata should have a Depreciation Report available. If they do not then we should discover why not.

The Depreciation Report should not be relied upon for exact details of the building. Rather it is a document to offer the strata a cost analysis for the next 30 years of the building’s life. It is excellent to review to get the particulars on any upcoming maintenance required or the age of the current mechanicals and building systems.

Many of the recommendations are estimates so review and take the information to ask the right questions to protect and inform your purchaser.

Insurance

• Make sure you have the most recent copy of the Strata Insurance

• Pay particular attention to the deductibles.

• Water/flood deductibles have risen almost 10 fold in recent years.

• If a deductible is over $100,000 then you may need third-party protection

• If the deductibles are over $250,000 special caution and considerations need to be taken.

• Do not write a subject-free offer or remove subjects without your clients confirming that they can get insurance for a specific property.

TITLE /PDS

Although we request the PDS and the Title search in the strata documentation these two items are specific the actual suite. Title will have a common property component but generally the items we are looking for on the common area title would be and litigations or liens against the strata corporation.

Many Strats will have easements or rights of ways that are INTER ALIA. This just means it allies to the entire strata.

When reviewing the PDS please remember that any information disclosed is to the best of the clients knowledge. It should be used as a reference but not a fact. Any concerns or contradicting information should be investigated.

Conclusion

REVIEWING THE STRATA INFORMATION WHEN SELLING AN ATTACHED STRATA PROPERTY IS A MAJOR PART OF A REALTORS RESPONSIBILITIES. HOWEVER, IT IS VERY IMPORTANT TO HAVE THE CLIENTS REVIEW THE INFORMATION THEMSELVES AS WELL.

As a best practice an advisor should review the strata corporations information and create a document or email to report on any findings. Flag any issues or concerns that could effect the enjoyment, cost or use of the property. The information should ALL be included for the client to review as well. Any concerns or questions should be addressed prior too committing to a firm deal.

If your client is a first time buyer, elderly or not familiar with purchasing strata tiled properties; explaining the purpose of reviewing this information and items we should be reviewing and paying attention to is very important.

If any information you discover is outside your scope of expertise it is very important to get advice from an expert in that area.