There are legal specifications regarding how strata fees and special levies should be applied to different sized units
Dear Condo Smarts: Our townhouse complex is 14 years old. The first buyers moved in during 1998-99.
From the beginning, the owners always paid the same strata fees for monthly expenses, and the same fees for special levies. The original documents provided by the developer indicate that each strata lot pays one-48th of the total fees, indicating that all our expenses for the strata corporation would be shared equally.
At this time, our roofing needs some major upgrades and possibly replacement. The quality that was installed by the contractor originally was the minimal standard of the time.
After several quotes, our projected costs, including a roofing inspector and taxes, will be $400,000.
We held our SGM in December and approved the levy with an equal share for each owner due on Feb. 1. One unit sold in January, and the buyer’s agent indicated that we overcharged the amount for the roof, as the sold unit was one of the smallest of the 48.
The buyer produced a copy of the plan from Land Titles, and sure enough, the formula shows there are six different sizes of units and different unit costs, although the roofing inspector has identified that the roofing area over each unit is virtually the same.
Do we have to change our formula? Can we amend the documents in Land Titles so they are consistent?
Dear Anna: A strata corporation is created when the owner-developer files the strata plan in the Land Title Registry. Whether it is an older strata plan, which shows the unit entitlement on the measured drawings, or a newer plan, whereby the schedule of unit entitlement is filed separately, the schedule that is filed in the Land Title Registry is the formula that applies.
This is a very common error that arises when strata corporations use the documents originally disclosed to buyers.
Part of the problem is that the owner-developer does his or her best to estimate what they intend to create as a formula, but the actual formula for strata entitlements is established when the surveyor measures the property, and the formula is approved by the Superintendent of Real Estate and the Registrar of the Land Title Registry.
Anna’s original disclosure had indeed indicated that all strata lots may share common expenses, if possible, on an equal basis. There was also, however, a draft schedule of unit entitlement attached to the disclosure statement that projected the measured area of each strata lot and how that would be converted in the schedule of unit entitlement. The strata plan also went further to indicate these were not the final measurements and the filed strata plan would include the final schedule of unit entitlement after the survey.
A strata corporation must use the registered schedule of unit entitlement for all expenses, except in the circumstance where the strata corporation has amended the schedule or there is an order from the courts replacing the schedule with an alternative, which may be considered if, for example, there is a material error in the plan, resulting from significant unfairness.
To amend the plan, the strata corporation would be required to pass a unanimous vote in favour of a resolution. In Anna’s strata, it would be possible to amend the registered schedule to reflect their historic practices if all 48 strata lots and their eligible voters voted in favour of the resolution.
The proposed amendment will also require the approval of the Superintendent of Real Estate and the Registrar of Land Titles.
If your strata is considering an amendment or attempting to correct years of improperly calculated fees, seek the advice of a lawyer who is experienced with the Strata Property Act and amendments to the strata plan requiring unanimous votes.
Source: The Victoria Times Colonist