There are many crucial factors that can affect the purchase of a home; inability to get the proper financing and issues found during the home inspection are the most common. In addition to this, one factor that is specific to purchasing a strata lot would be matters found within the strata documents.
Unfortunately first-time buyers and repeat buyers alike aren’t aware of how significant bylaws or other items in the strata documents are, and how much they can affect their purchase, until it’s too late. Therefore, it is highly recommended that you obtain a copy of the strata documents and read through them carefully before you remove your conditions, and the purchase of the home becomes irreversible.
Here are some of the most crucial items to look for when reading through strata documents.
1. Rental Restrictions
Rental restrictions are important to keep in mind for both investors and regular purchasers. Strata councils have the ability to set specific rules, including the number of lots in the complex that can be rented out at once, and the length of time that a given lot can be rented during one calendar year. Some councils even choose to prohibit rentals altogether, so it’s a good idea to check on this before even making an offer on a unit. If a complex doesn’t allow rentals, it’s obviously not the right choice for an investor. Those purchasing a strata unit with the intent of living in it should also keep the restrictions in mind in case there’s a change they would want/need to rent it out in the future.
2. Pet Restrictions
Pet restrictions are a key item to know regardless of whether or not you’re purchasing the unit for yourself or as an investment property. Rules regarding pets can vary quite significantly from complex to complex, so it’s never safe to assume the unit you’re currently interested in has the same rules as one you’ve previously inquired about. These rules can include, but are not limited to, size/weight restrictions, number of animals allow per unit, and if the animal is allowed outdoors without a leash. Complexes often ban pets altogether, and some require the animal be preapproved and registered with the Strata Council before moving in.
3. Parking Restrictions
Something that many buyers don’t think of when purchasing a strata unit is the parking restrictions that are in place; these restrictions can be quite strict depending on the complex. The most common rule is that the owner(s) of a unit can only use the parking stall(s) assigned to their strata lot, but sometimes the rules go much further than that. Many complexes don’t allow the parking of recreational vehicles (boats, trailers, motorhomes, snowmobiles, ATVs, etc) anywhere on the limited common property or common property. Some complexes do allow recreational vehicles, but there are specific size limits enforced. Another item to remember regarding parking is the use of visitor parking. There is usually a very limited number of designated visitor parking stalls, therefore some complexes don’t allow the same visitor to use a stall for more than 1 week at a time. It’s important to keep this in mind if you tend to have company stay with you for extended periods of time.
4. Insurance Bylaws
Though it’s fairly typical for a strata complex to already have insurance in place by the time you purchase a unit, these insurance policies often only cover the building(s) and not any of its contents. This is why we always recommend that purchasers get their own insurance as well to ensure that the contents of their unit are covered as well. This also protects them from any insurance deductibles from the strata as well.
5. Depreciation Report
Both repeat buyers and first-time buyers may not think to look at the complex’s depreciation report, but this is an extremely important one to remember. The depreciation report outlines the assets of the common property, and the projected maintenance, repair, and replacement costs over a 30-year period. Not only does this list include buildings, but landscaping, roads, and recreational amenities on the lot (if any) as well. Looking at this report will help you determine if expensive repairs could be needed in the future, which could save you money and stress.
6. Meeting Minutes
Though it’s very likely there will be many of them to go through, reading AGM and Council minutes can bring you up to speed on what’s going on with the strata complex. These meetings often discuss repairs and maintenance that have been done or will need to be addressed soon, as well as any rules that are in the process of being passed, or issues brought up by residents of the complex. For example, residents might be trying to have new pet restrictions put in place, so while the complex may allow pets right now, this could no longer be the case by the time you remove conditions and/or move in. This is why it never hurts to have a read through the meeting minutes!
*DISCLAIMER* Please keep in mind that every strata complex is unique and there could be other key factors that might affect your purchase. We make no guarantee that you will be ok to proceed with purchasing a strata unit solely by using the information provided in this post. Please feel free to give us a call if you have any questions. We’d be happy to help!