New Strata Developments
When buying into a new strata development, it is important to know that the “owner developer” has some unique obligations from when the strata corporation is created until two years following the strata corporation’s first annual general meeting (AGM).
Learn more on this page:
Definition of Owner Developer
Creating the Strata Corporation
Contingency Reserve Fund
Before the First Annual General Meeting
Preparing for the First Annual General Meeting
The First AGM
After the First AGM
Home Warranty Insurance
Generally speaking, an Owner Developer is the person who files the strata plan in the Land Title Office. An Owner Developer can also be a person who acquires all or more than 50% of the strata lots in a strata plan from a person who is registered as the owner when the strata plans are filed. This may result in there being two separate Owner Developers within a single development.
The strata corporation is created when the Owner Developer files the strata plan in the Land Title Office. A number will be assigned to the strata corporation, which becomes the legal identity of the strata corporation. Examples of strata corporation numbers are LMS 1234 or KAS 9876. The name of the strata corporation is “The Owners, Strata Plan, (the registration number of the strata plan)”.
At the time of filing the strata plan, the owner developer can amend the Standard Bylaws or create new bylaws by filing a “Form Y: Owner Developers’ Notice of Different Bylaws”. Examples of new bylaws commonly filed are creating separate sections within the strata corporation and apportioning of common expenses by strata lot type.
A strata corporation is a legal entity created under the Strata Property Act and not the Business Corporations Act. This means the strata corporation does not have an incorporation certificate and the Registrar of Companies does not regulate the strata corporation.
The Office of the Superintendent of Real Estate (OSRE):
- receives Disclosure Statements for filing under the Real Estate Development Marketing Act for strata titled developments consisting of 5 or more strata lots (see OSRE for current fees)
- searches for and provides copies of filed Disclosure Statements (see OSRE for current fees)
- receives complaints concerning inaccurate or incomplete Disclosure Statements or marketing without a Disclosure Statement
- receives a "Form J: Rental Disclosure Statement" for filing (see OSRE for current fees)
- searches for and provides a copy of a filed "Form J: Rental Disclosure Statement" (see OSRE for current fees)
- approves some schedules of unit entitlement, voting rights and interest upon destruction under the Strata Property Act (see OSRE for current fees)
The Owner Developer is responsible for paying all expenses for the development, until one month after the first conveyance of a strata lot.
During the period beginning one month after the first conveyance of a strata lot until the first annual general meeting, if the actual strata corporation expenses exceed the estimated expenses set out in the interim budget, the Owner Developer must pay the difference to the strata corporation within eight weeks of the first meeting.
Owner Developers who seriously underestimate the interim budget must pay additional amounts to the strata corporation. If the actual expenses are more than that set out in the interim budget by:
- 10% to under 20%, the Owner Developer must pay an additional amount which is equivalent to the excess multiplied by two
- 20% or more, the Owner Developer must pay an additional amount which is equivalent to the excess multiplied by three
Any penalty owing to a strata corporation by an Owner Developer underestimating the interim budget can be collected, if necessary, by the strata corporation registering a lien against one of the Owner Developer’s strata lots, if the Owner Developer still owns one or more strata lots.
At the time of the first conveyance, the Owner Developer is required to pay a lump sum of money into the contingency reserve fund (CRF). The minimum contribution into the CRF depends on when the first conveyance of a strata lot in the development occurs.
For example, the Owner Developer must contribute a minimum of 5% of the estimated operating expenses as set out in the interim budget if the first conveyance of a strata lot is no later than one year after the strata plan is deposited. If the first conveyance occurs later than one year after the strata plan is deposited, the minimum contribution is the lesser of 5% multiplied by the number of years or partial years since the deposit of the strata plan and 25% of the strata corporation’s operating expenses as set out in the interim budget.
When the strata corporation is created, the Owner Developer must exercise the powers and perform the duties of the strata council.
This means the Owner Developer must exercise reasonable care and skill when acting as the strata council and always act in good faith with a view to the best interests of the strata corporation.
- Learn more about the roles and responsibilities of owners, tenants, the strata council, the strata property manager and the strata corporation.
In addition, the Owner Developer must also:
- prepare a twelve month interim budget and provide it to purchasers prior to entering into contracts with purchasers
- pursue all warranty remedies with respect to the construction of the common property and common assets
- ensure that the term of any insurance policy for the strata corporation continues for at least four weeks following the date of the First AGM
- not enter into a contract with the strata corporation after the first conveyance of a strata lot, unless the contract is approved by a unanimous resolution at a special general meeting. Persons who are not at arm’s length to the Owner Developer also cannot enter into a contract with the strata corporation after the first conveyance of a strata lot, unless the contract is approved by unanimous resolution
- ensure that after the conveyance of the first strata lot but before the first AGM, all resolutions ordinarily requiring approval by a 3/4 vote, but which need to be passed by a unanimous resolution during this period, are approved accordingly
- establish a contingency reserve fund at the time of the first conveyance of a strata lot to a purchaser
The Owner Developer is responsible for preparing the strata corporation for its first AGM within six weeks of the earlier of the following dates:
- nine months from the date of the first conveyance of a strata lot or
- the date that 50% plus one of the strata lots are conveyed to purchasers
Giving Notice: Notice of the first AGM must be given two weeks prior to the date of the meeting. The Notice must include a description of the matters to be voted on and the exact wording of resolutions requiring a unanimous or 3/4 vote. The Owner Developer must distribute the Notice, proposed budget and financial statements to:
- every strata lot owner
- every mortgagee who has filed a “Form C: Mortgagee’s Request For Notification”
- every tenant who: has been assigned a right to vote; is a family member, as defined in the Regulations; or has a lease of three years or more; and if the strata corporation has received notice of the assignment or leasing arrangements
If the first AGM is not held by the required date, the Owner Developer will owe the strata corporation $1,000 if the meeting is delayed by up to 30 days, and $1,000 for each additional delay of seven days after the initial 30 day period. If necessary, the strata corporation can collect the amount owning by the Owner Developer by registering a lien against one of the Owner Developer’s strata lots, if the Owner Developer still owns one or more strata lots.
If the Owner Developer fails to hold the first AGM within the required time, then a strata owner may hold the first AGM by giving two weeks’ notice to all the persons to whom the Owner Developer should have given notice, and to the Owner Developer.
The Owner Developer must provide the strata corporation with the first annual budget and other information, including: building permit plans, strata corporation contracts, warranties and manuals for common property and assets, and all usual records.
Some of this information will be very helpful for depreciation reports that the strata corporation is required to prepare by the second AGM.
The strata council is elected at the first AGM and the Owner Developer no longer acts for the strata corporation.
If the Owner Developer fails to provide the required documents, and the strata corporation must pay money to obtain any missing documents, and it may if necessary collect the sum owing for obtaining the documents from the Owner Developer by registering a lien against one of the Owner Developer’s strata lots, if the Owner Developer still owns one or more strata lots.
Conducting the Meeting: The chair of the meeting will be the Owner Developer acting personally or through an agent. If the Owner Developer is unwilling or unable, an individual elected by the voters who are present in person or by proxy should act as chair.
An Owner Developer who still owns one or more strata lots is entitled to participate in the meeting as an owner with the voting entitlement of all retained strata lots and is eligible for election to the strata council. If elected, the Owner Developer must act in the best interests of the strata corporation.
The Owner Developer must do the following:
|Within 1 week after First AGM||Transfer control of the strata corporation’s money, keys, and garage openers to the new strata council.|
|4 weeks after the First AGM||Ensure that strata corporation's insurance coverage is in place until this date.|
|8 weeks after the First AGM||Have delivered the strata corporation’s updated financial statement prior to this date. The statement must end with the date that the new budget takes effect, or the date of the first AGM, if no new budget was approved.|
|2 years after First AGM||Keep and make available to the strata corporation all financial records up to the date that control of the strata corporation money is transferred to the strata council.|
In B.C. new homes have home warranty insurance to protect against construction, building envelope and structural defects. Strata-titled properties have different types of home warranty insurance, one for common property and one for each individual strata unit. BC Housing's Licensing & Consumer Services branch (formerly the Homeowner Protection Office) provides prospective new home buyers and owners information on warranty insurance in British Columbia.
Strata Property Act Sections: 1, 2, 5-8, 10-23, 45, 116, 121, 245
Strata Property Regulation: 3.1-3.4, 14.6, Part 17
Standard Bylaws (unless amended by your strata corporation or section): 30
The information on this website about strata housing is provided for the user’s convenience as a basic starting point; it is not a substitute for getting legal advice. Learn more about the site’s purpose and limits. The content on this website is periodically reviewed and updated by the Province of British Columbia as per the date noted on each page: June 5th, 2017.