Managing a portfolio of rental properties can be both rewarding and trying, depending on the number of units and the range of problems or issues connected to those properties. The task becomes even more complex when the units are part of the holdings of a strata corporation. Strata property management by its very nature involves far more complex issues than looking after properties belonging to a single owner. Navigating the complexities of strata property ownership is a task often best left to the experience and skills of a Strata Management Company.
A strata corporation is a legal entity created under the BC Strata Property Act (SPA) with all of the powers of a person. This legal designation means the corporation has the power to enter into binding contracts and to hire employees, with exactly the same power and legal presence as an individual. Typically a strata corporation is created to divide a building(s) and/or parcel of land into separate components, each individually owned, as well as all common components of the property. All of the property involved is then owned collectively by the strata corporation members, namely the owners. This form of collective ownership is most commonly found in townhouse or condominium developments, but a similar system of ownership can also be applied to business or commercial properties.
Strata property management by its very nature involves far more legal issues than looking after properties belonging to a single owner
Daily operation of the Strata Corporation is normally left to the entity’s elected strata council, the body of owners who administer their group holdings. When a management contract is entered into, it is the strata corporation, as a separate legal entity, that is entering into the contract, not the individual property owners. Although the strata council may negotiate and sign the contract, the strata council is doing so on behalf of the strata corporation and its owners. Depending on the wishes of the strata council, the services of a Strata Management Company is often employed to carry out many of the duties of the strata corporation.
A few of those duties, especially those related to the enforcement of l bylaws, cannot be delegated. At the discretion of the strata council a limited number of services, such as collecting strata fees, paying bills and preparing financial reports might be assigned to the Strata Management Company. Any management contract entered into would set out in detail the services that the strata management company is expected to perform.
To contract with a strata management company, the development’s owners must approve the payment of the management fees. Usually the fee is included in the budget as approved by the owners at the Annual General Meeting (“AGM”), or as an additional expense at either the AGM or at a special general meeting. The strata management company is normally the body that organizes the AGM, develops its agenda and helps with such services as organizing the election of officers to the strata council, among other duties.
As can be seen, there is more involved when owning a strata property as compared to a unit with a single owner. The very nature of these complexities is your best motivation for hiring a strata management company to oversee the day-to-day administration of the property. Strata properties can be an excellent investment, but offer their own unique and daunting challenges. But you don’t have to go it alone when you employ the services of a professional strata manager.