What Is a Strata Corporation & What Does It Actually Do?
A strata corporation is a legal body that manages a shared residential or commercial property in British Columbia, Canada. The word “strata” refers to a form of ownership where individuals own their unit and share ownership of common areas. Those who live in a condo, townhome, or multi-unit building in B.C. likely live in a strata. Read on to learn more about the strata meaning, the Strata Property Act, the responsibilities of the strata council, and much more.
What Is a Strata Corporation?
A strata corporation forms when a developer files a strata plan with the Land Title Office, a provincial government office in Canada. This plan divides a development into strata lots (the units), shared spaces, and sometimes limited common property that is only used by certain unit holders, such as patios or parking spaces. A strata is similar to a condominium corporation in other parts of Canada.
Anyone who buys a strata property automatically becomes a member of the corporation. In fact, more than 1.5 million people live in stratas in British Columbia. Each owner holds a strata title for their individual unit and shares ownership of community common areas.
What Is the Strata Property Act?
The Strata Property Act is the law that guides how stratas operate in British Columbia. It explains the rights and duties of owners, council members, and the strata. It also sets rules for meetings, voting, finances, and bylaws. With it in place, a strata has legal power to make big decisions, enforce rules, and impose and collect strata fees.
The Strata Property Act requires each strata to:
- Hold an annual general meeting
- Elect a strata council
- Prepare an annual budget
- Keep records and financial statements
Every strata council must comply with the Act in creating and enforcing its bylaws and rules.
Who Governs a Strata Corporation?
Generally, a strata council runs a strata corporation. Who’s allowed to serve on the council and for how long are outlined in a strata’s bylaws. Usually, a strata council is comprised of unit owners, and council members are elected by their fellow unit owners.
What Are the Responsibilities of the Strata Council?
The council represents strata owners and has a fiduciary duty to act in the best interest of the community. While the council runs the day-to-day business of the corporation, its specific duties may vary from strata to strata.
Typical responsibilities might include:
- Managing the building and shared spaces
- Enforcing strata bylaws and strata rules
- Planning budgets and approving expenses
- Hiring and supervising service providers
- Communicating with residents
- Preparing for meetings and keeping minutes
Some properties hire a strata management company for help. Managers provide guidance and support, but the strata council still makes the final decision.
What Are the Different Types of Stratas?
Stratas come in many forms and are located throughout British Columbia. The most common types of stratas include:
- Residential Strata. These cover condos, townhouses, duplexes, or detached homes in a planned neighbourhood.
- Commercial Strata. These include shopping plazas, office buildings, or industrial parks.
- Mixed-Use Strata. A mix of residential and commercial units in one development.
- Bare-Land Strata. Unit holders own the land but share common services, such as private roads, lighting, or a clubhouse.
What Is the Difference Between a Strata and an HOA?
A strata corporation in Canada is similar to a homeowners' association (HOA) in the United States in that they both supervise shared common areas and collect fees.
However, there are some significant differences. A strata provides more shared ownership. So, unit holders have a financial interest in the common areas. Here are a few more differentiators.
Stratas
- Common in Canada
- A legal system of property ownership
- Governed by the Strata Property Act
- Residents own their unit plus shared spaces
- The strata council runs the community
HOAs
- Common in the United States
- A nonprofit organization
- Governed by federal, state, and local laws
- HOA owns shared facilities, not the homeowners
- The board of directors oversees the community
FREE GUIDE: “What Is an HOA? Definition, Pros, and Cons for Homeowners”
Benefits of Hiring a Professional Strata Management Company
Many strata councils hire a strata management company to help them fulfill their responsibilities to the community. The top benefits of hiring a management company include:
Oversee Daily Operations
A management company coordinates maintenance, repairs, service providers, and communications.
Regulatory Expertise
Strata law can be complex. Well-versed in the Strata Property Act, professional managers ensure the community remains compliant and avoids legal issues. Additionally, they provide guidance and advice based on industry knowledge.
Financial Management
Good fiscal planning protects a community's future. Managers help with accounting, collections, invoices, and long-term planning. They also track and organize strata fees to keep the corporation stable.
Technology
Modern management tools allow residents to pay fees online, submit requests, and access records. These platforms improve communication and service.
LEARN MORE: “Top 10 Considerations for Choosing a Community Management Company”
Why Many Stratas Trust Associa British Columbia
With a local team that lives and works in the area, Associa British Columbia is dedicated to the success of its clients. Associa British Columbia offers full-service strata management, financial services, and advanced technology to support communities of all sizes.
As an industry leader, the company helps council members successfully fulfill their roles, complete requirements, and assist with duties.
“Associa has been our strata council’s strata management service provider for decades. I like their full-service offerings, including rental property management services and educational webinars,” says one reviewer.
Understanding Managed Communities in Canada, Mexico, and the U.S.
A strata corporation is a legal system of property ownership. Governed by the Strata Property Act, a strata council must ensure its community always meets regulatory standards.
To learn strata terminology and the vocabulary used in managed communities across North America, download “How Do You Say HOA?”. This ebook explains common terms and helps owners understand the language used in communities throughout Canada, the United States, and Mexico.
FAQs
How do strata bylaws work?
Strata bylaws are official rules that govern how owners and residents use strata property. They cover topics like noise, pets, renovations, and shared facility use. The strata council enforces these bylaws, which encourage community cohesion.
Do I need insurance if I live in a strata?
Yes, residents must insure their individual strata lots and belongings. The strata itself holds strata insurance, which covers shared spaces, not personal units.
What happens if an owner doesn’t pay strata fees?
Unpaid strata fees accrue interest and may result in fines or legal action. The strata corporation can place a lien on the strata lot to recover owed fees.