The Strata Plan as a Corporate Entity – A Philosophical Approach

Before the reader spends any time with our Property Reviews, we believe it important to make clear the position we take as maintenance specialists and consultants to our clients and their properties.

First and foremost, we work for the Strata Corporation and offer our advice and recommendations solely in what we believe to be the Corporation’s best interests. This position can, and often does, fly in the face of what some individual owners consider their own interests, so it is important to ensure that everyone understands our motives and philosophy from the outset.

Your Strata Corporation is a business.!!

This is a simple statement but, we wager, one that many owners have rarely if ever heard. The “business” of the Strata is quite simple – to manage the assets of the Corporation for the benefit of its “shareholders” – just like any other.

“What does that have to do with me?” you ask. “I’m a homeowner, not a shareholder.”…and there’s the rub. As a Strata Lot owner, your rights (and your obligations) far more closely resemble those of a company shareholder, than those of a single-family homeowner.

As part of the purchase agreement, your “share” in the Strata Corporation entitles you to live in the space that you call your “home”. What you did not do was move into a “house”, over which, you have absolute control. In fact, you moved in to the Strata Corporation’s “asset” and, if the “business” is operating properly, you will be able to live in the well maintained “home” that your real estate agent sold you.

What this means, however, is that some decisions the Strata Corporation must take, in the best interests of ALL shareholders, will not necessarily be the choice you might make as a “house” owner. That said, we think you’ll find it much easier to appreciate the operational decisions that the Corporation is obliged to make if you look at things from this perspective.

The British Columbia Strata Property Act (1998), consisting of the Act, its Regulation, and its supplementary Instruction Guides (the latter is now out of print but available through the Financial Institutions Commission www.fic.gov.bc.ca) and its predecessors going back to the early 1970’s, have been developed to govern the relationship between the Strata Corporation and its Owners (Shareholders).

To our knowledge, it is the only form of property ownership, other than a Cooperative, that requires such extensive legal stewardship and oversight, and we strongly recommend that each Strata owner take the time to read these
documents. Whether you appreciate it or not, they have a very strong influence on your life.

At times in our reviews, we step beyond the pragmatic maintenance commentary to discuss the Corporation’s responsibility in regard to Risk Management and its legal obligations under the SPA, and a number of other Acts and Regulations that impact its operations. This will include examples of specific conditions observed during our site inspection that may highlight the Corporation’s poor practices, or an individual owner’s decision to make unilateral changes.

While we have no wish to embarrass the owners or the corporate directors, it is important that all parties understand why it is imperative that the Corporation takes a leading role in the process, even though the owner may resent the “intrusion”. In turn, the Directors must appreciate why they cannot abrogate the Corporation’s obligations, and leave owners to manage maintenance requirements for which, it is responsible.

All that said; we make our recommendations to, and solely for our client, the Strata Corporation, based on the accepted industry practices of professional property and asset managers, and our own local experience of more than 30 years in building maintenance and property management.

To Next Article: Owner Driven Renovations

Advertisements