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Strata Property Act

[SBC 1998] CHAPTER 43

Part 6 — Finances

Division 1 — Operating Fund and Contingency Reserve Fund

Strata corporation responsible for common expenses

91  The strata corporation is responsible for the common expenses of the strata corporation.

Operating fund and contingency reserve fund

92  To meet its expenses the strata corporation must establish, and the owners must contribute, by means of strata fees, to

(a) an operating fund for common expenses that usually occur either once a year or more often than once a year, and

(b) a contingency reserve fund for common expenses that usually occur less often than once a year or that do not usually occur.

Minimum and maximum contributions to contingency reserve fund

93  Subject to the requirements set out in the regulations, the strata corporation must determine the amount of the annual contribution to the contingency reserve fund.

Depreciation report

94  (1) In this section, "qualified person" has the meaning set out in the regulations.

(2) Subject to subsection (3), a strata corporation must obtain from a qualified person, on or before the following dates, a depreciation report estimating the repair and replacement cost for major items in the strata corporation and the expected life of those items:

(a) for the first time,

(i)   December 14, 2013, in the case of a strata corporation that existed on December 14, 2011, or

(ii)   the prescribed date, in all other cases;

(b) if the strata corporation has, before or after the coming into force of this section, obtained a depreciation report that complies with the requirements of this section, the date that is the prescribed period after the date on which that report was obtained;

(c) if the strata corporation has, under subsection (3) (a), waived the requirement under this subsection to obtain a depreciation report, the date that is the prescribed period after the date on which the resolution waiving the requirement was passed.

(3) A strata corporation need not comply with the requirement under subsection (2) to obtain a depreciation report on or before a certain date if

(a) the strata corporation, by a resolution passed by a 3/4 vote at an annual or special general meeting within the prescribed period, waives that requirement, or

(b) the strata corporation is a member of a prescribed class of strata corporations.

(4) A depreciation report referred to in subsection (2) must contain the information set out in the regulations.

Management of contingency reserve fund

95  (1) The strata corporation must account for money in the contingency reserve fund separately from other money of the strata corporation.

(2) The strata corporation must invest all of the money in the contingency reserve fund in one or the other or a combination of the following:

(a) those investments permitted by the regulations;

(b) insured accounts with savings institutions in British Columbia.

(3) Any interest or income earned on the money in the contingency reserve fund becomes part of the fund.

(4) Despite subsection (2), the strata corporation may lend money in the contingency reserve fund to the operating fund as permitted by the regulations.

Expenditures from contingency reserve fund

96  The strata corporation must not spend money from the contingency reserve fund unless the expenditure is

(a) consistent with the purposes of the fund as set out in section 92 (b), and

(b) first approved by a resolution passed by a 3/4 vote at an annual or special general meeting, or authorized under section 98.

Expenditures from operating fund

97  The strata corporation must not spend money from the operating fund unless the expenditure is

(a) consistent with the purposes of the fund as set out in section 92 (a), and

(b) first approved by a resolution passed by a 3/4 vote at an annual or special general meeting, or authorized

(i)   in the budget, or

(ii)   under section 98 or 104 (3).

Unapproved expenditures

98  (1) If a proposed expenditure has not been put forward for approval in the budget or at an annual or special general meeting, the strata corporation may only make the expenditure in accordance with this section.

(2) Subject to subsection (3), the expenditure may be made out of the operating fund if the expenditure, together with all other unapproved expenditures, whether of the same type or not, that were made under this subsection in the same fiscal year, is

(a) less than the amount set out in the bylaws, or

(b) if the bylaws are silent as to the amount, less than $2 000 or 5% of the total contribution to the operating fund for the current year, whichever is less.

(3) The expenditure may be made out of the operating fund or contingency reserve fund if there are reasonable grounds to believe that an immediate expenditure is necessary to ensure safety or prevent significant loss or damage, whether physical or otherwise.

(4) A bylaw setting out an amount for the purposes of subsection (2) (a) may set out further conditions for, or limitations on, any expenditures under that provision.

(5) Any expenditure under subsection (3) must not exceed the minimum amount needed to ensure safety or prevent significant loss or damage.

(6) The strata corporation must inform owners as soon as feasible about any expenditure made under subsection (3).

Division 2 — Contribution to Expenses

Calculating strata fees

99  (1) Subject to section 100, owners must contribute to the strata corporation their strata lots' shares of the total contributions budgeted for the operating fund and contingency reserve fund by means of strata fees calculated in accordance with this section and the regulations.

(2) Subject to the regulations, the strata fees for a strata lot's share of the contribution to the operating fund and contingency reserve fund are calculated as follows:

Change to basis for calculation of contribution

100  (1) At an annual or special general meeting held after the first annual general meeting, the strata corporation may, by a resolution passed by a unanimous vote, agree to use one or more different formulas, other than the formulas set out in section 99 and the regulations, for the calculation of a strata lot's share of the contribution to the operating fund and contingency reserve fund.

(2) An agreement under subsection (1) may be revoked or changed by a resolution passed by a unanimous vote at an annual or special general meeting.

(3) A resolution passed under subsection (1) or (2) has no effect until it is filed in the land title office, with a Certificate of Strata Corporation in the prescribed form stating that the resolution has been passed by a unanimous vote.

No return of contributions on sale of strata lot

101  On the sale of a strata lot, the seller is not entitled to a return of contributions to the contingency reserve fund.

Division 3 — Budgets

Change of fiscal year end

102  (1) The strata corporation may, by a resolution passed by a 3/4 vote at an annual or special general meeting held after the first annual general meeting, change the dates of its fiscal year, and as a result may have a budget for

(a) a period of more than 12 months, but less than 18 months, or

(b) a period of less than 12 months, but more than 6 months.

(2) If a change to the dates of a strata corporation's fiscal year results in a period not covered by a budget, section 104 (2) and (3) applies.

Budget requirements

103  (1) The strata corporation must prepare a budget for the coming fiscal year for approval by a resolution to be passed by a majority vote at each annual general meeting.

(2) The proposed budget must be distributed with the notice of the annual general meeting under section 45 and must be accompanied by a financial statement.

(3) The budget and financial statement

(a) must contain the information required by the regulations, and

(b) may be in the form set out in the regulations.

(4) The proposed budget may be amended by a majority vote at the annual general meeting before the budget itself is put to a vote.

Failure to approve budget

104  (1) If a budget is not approved at an annual general meeting, the strata corporation must within 30 days, or such longer period as approved by a resolution passed by a 3/4 vote at the meeting, prepare a new budget and place it before a special general meeting for approval by a resolution passed by a majority vote.

(2) If a fiscal year to which a budget relates ends before a new budget is approved, the owners must, until the new budget is approved, continue to pay to the strata corporation the same monthly strata fees that they were required to pay under the previous budget.

(3) Until a new budget is approved, the strata corporation may spend money out of the operating fund only in accordance with section 98 or

(a) on the type of expenses that are set out in the previous budget and that usually occur once a year or more often than once a year, and

(b) up to the maximum amount set out in the previous budget for each category of expense.

Budget surpluses and deficits

105  (1) Subject to section 14, contributions to the operating fund which are not required to meet operating expenses accruing during the fiscal year to which the budget relates must be dealt with in one or more of the following ways, unless the strata corporation determines otherwise by a resolution passed by a 3/4 vote at an annual or special general meeting:

(a) transferred into the contingency reserve fund;

(b) carried forward as part of the operating fund, as a surplus;

(c) used to reduce the total contribution to the next fiscal year's operating fund.

(2) If operating expenses exceed the total contribution to the operating fund, the deficit must be eliminated during the next fiscal year.

Informing owners of strata fees

106  Within 2 weeks following the annual or special general meeting at which a budget is passed, the strata corporation must inform owners of any changes to their strata fees resulting from the new budget.

Payment of strata fees

107  (1) A bylaw that establishes a schedule for the payment of strata fees may set out a rate of interest, not to exceed the rate set out in the regulations, to be paid if an owner is late in paying his or her strata fees under that schedule.

(2) The interest payable on a late payment of strata fees in accordance with a bylaw referred to in subsection (1) is not a fine, and forms part of the strata fees for the purposes of section 116.

Division 4 — Special Levies and User Fees

Special levy

108  (1) The strata corporation may raise money from the owners by means of a special levy.

(2) The strata corporation must calculate each strata lot's share of a special levy

(a) in accordance with section 99, 100 or 195, in which case the levy must be approved by a resolution passed by a 3/4 vote at an annual or special general meeting, or

(b) in another way that establishes a fair division of expenses for that particular levy, in which case the levy must be approved by a resolution passed by a unanimous vote at an annual or special general meeting.

(3) The resolution to approve a special levy must set out all of the following:

(a) the purpose of the levy;

(b) the total amount of the levy;

(c) the method used to determine each strata lot's share of the levy;

(d) the amount of each strata lot's share of the levy;

(e) the date by which the levy is to be paid or, if the levy is payable in installments, the dates by which the installments are to be paid.

(4) The strata corporation must

(a) account for the money collected separately from other money of the strata corporation,

(b) invest all of the money collected in one or both of the following:

(i)   investments permitted by the regulations;

(ii)   insured accounts with savings institutions in British Columbia,

(c) use the money collected for the purpose set out in the resolution, and

(d) inform owners about the expenditure of the money collected.

(4.1) A strata corporation may, by bylaw or by a resolution approving a special levy, establish a rate of interest, not to exceed the rate set out in the regulations, to be paid if an owner is late in paying his or her strata lot's share of the special levy.

(4.2) The interest payable on a late payment of a special levy in accordance with a bylaw or resolution referred to in subsection (4.1) is not a fine, and forms part of the special levy for the purposes of section 116.

(5) If the money collected exceeds the amount required, or for any other reason is not fully used for the purpose set out in the resolution, the strata corporation must pay to each owner of a strata lot the portion of the unused amount of the special levy that is proportional to the contribution made to the special levy in respect of that strata lot.

(6) Despite subsection (5), if no owner is entitled to receive more than $100 in total under subsection (5), the strata corporation may deposit the excess in the contingency reserve fund.

(7) In subsections (4) and (5), "money collected" means the money collected on a special levy and includes any interest or income earned on that money.

Payment of special levy when strata lot sold

109  If a special levy is approved before a strata lot is conveyed to a purchaser,

(a) the seller owes the strata corporation the portion of the levy that is payable before the date the strata lot is conveyed, and

(b) the purchaser owes the strata corporation the portion of the levy that is payable on or after the date the strata lot is conveyed.

User fees

110  A strata corporation must not impose user fees for the use of common property or common assets by owners, tenants or occupants, or their visitors, other than as set out in the regulations.

Division 5 — Borrowing Powers of Strata Corporation

Strata corporation may borrow

111  (1) The strata corporation may, after approval by a resolution passed by a 3/4 vote at an annual or special general meeting, borrow money required by it to exercise its powers and perform its duties and, subject to section 81, may secure the repayment of money borrowed by it, and the payment of interest on that money.

(2) Without limiting subsection (1), the strata corporation may secure the repayment of money borrowed by it, and the payment of interest, by one or more of the following:

(a) a mortgage of property, other than common property;

(b) an assignment of unpaid strata fees or special levies;

(c) a negotiable instrument.

Division 6 — Money Owing to Strata Corporation

Notice to owner or tenant of money owing to strata corporation

112  (1) Before suing or beginning arbitration to collect money from an owner or tenant, the strata corporation must give the owner or tenant at least 2 weeks' written notice demanding payment and indicating that action may be taken if payment is not made within that 2 week period.

(2) Before the strata corporation registers a lien against an owner's strata lot under section 116, the strata corporation must give the owner at least 2 weeks' written notice demanding payment and indicating that a lien may be registered if payment is not made within that 2 week period.

Notice to mortgagee

113  If a mortgagee has given the strata corporation a Mortgagee's Request for Notification under section 60, the strata corporation

(a) may give the mortgagee written notice that the strata lot owner has failed to pay money owing to the strata corporation for more than 60 days, and

(b) must give the mortgagee a copy of any notice given to the owner under section 112.

Disputed debt

114  (1) If there is a dispute over whether an owner or tenant owes money to the strata corporation, the owner or tenant may pay the disputed amount

(a) into court if court proceedings have been started and the Supreme Court Civil Rules allow payment into court, or

(b) to the strata corporation to hold in trust if the matter has been referred to arbitration or if court proceedings have been started.

(2) On receipt of an amount under subsection (1) (b), the strata corporation holds the money and any interest on the money in trust for the parties to the dispute until the dispute is resolved.

(3) After the dispute is resolved, the strata corporation must pay the amount to the party entitled to it as set out in the decision of the court or arbitrator.

Certificate of Payment

115  (1) Within one week of the request of an owner or purchaser, or a person authorized by an owner or purchaser, the strata corporation must give the person making the request a Certificate of Payment in the prescribed form if

(a) the owner does not owe money to the strata corporation, or

(b) the owner does owe money but

(i)   the money claimed by the strata corporation has been paid into court, or to the strata corporation in trust, under section 114, or

(ii)   arrangements satisfactory to the strata corporation have been made to pay the money owing.

(2) The certificate is current for the purposes of section 256 for a period of 60 days from the date it is issued.

(3) The strata corporation may charge a fee for the certificate, but the fee must not exceed the amount set out in the regulations.

(4) In completing the certificate, the strata corporation may include money owing in respect of

(a) the matters set out in section 116, and

(b) fines and the costs of remedying a contravention of a bylaw or rule charged against the owner or fines and costs for which the owner is responsible under section 131.

(5) A certificate must not include claims of damages against an owner which have not been determined by a court or by arbitration.

Certificate of Lien

116  (1) The strata corporation may register a lien against an owner's strata lot by registering in the land title office a Certificate of Lien in the prescribed form if the owner fails to pay the strata corporation any of the following with respect to that strata lot:

(a) strata fees;

(b) a special levy;

(c) a reimbursement of the cost of work referred to in section 85;

(d) the strata lot's share of a judgment against the strata corporation;

(e) [Repealed 1999-21-25.]

(2) The strata corporation may register a lien against any strata lot, but only one strata lot, owned by an owner as owner developer, by registering in the land title office a Certificate of Lien in the prescribed form if the owner developer fails to pay an amount payable to the strata corporation under section 14 (4) or (5), 17 (b) or 20 (3).

(3) Subsections (1) and (2) do not apply if

(a) the amount owing has, under section 114, been paid into court or to the strata corporation in trust,

(b) arrangements satisfactory to the strata corporation have been made to pay the money owing, or

(c) the amount owing is in respect of a fine or the costs of remedying a contravention.

(4) On registration the certificate creates a lien against the owner's strata lot in favour of the strata corporation for the amount owing.

(5) The strata corporation's lien ranks in priority to every other lien or registered charge except

(a) to the extent that the strata corporation's lien is for a strata lot's share of a judgment against the strata corporation,

(b) if the other lien or charge is in favour of the Crown and is not a mortgage of land, or

(c) if the other lien or charge is made under the Builders Lien Act.

(6) On receiving the amount owing, the strata corporation must within one week remove the lien by registering in the land title office an Acknowledgment of Payment in the prescribed form.

Forced sale of owner's strata lot to collect money owing

117  (1) After the strata corporation has registered a Certificate of Lien against a strata lot, the strata corporation may apply to the Supreme Court for an order for the sale of the strata lot.

(2) If the strata corporation has obtained a judgment for the amount owing, the court may, after considering all the circumstances, make an order for the sale of the strata lot.

(3) If the strata corporation has not obtained a judgment for the amount owing, the court may try the issue and may

(a) order that judgment be entered against the owner in favour of the strata corporation for the amount of the lien or for an amount that the court, as a result of the trial, finds owing, and

(b) if judgment is entered against the owner, make an order for the sale of the strata lot after considering all the circumstances.

(4) An order for the sale of a strata lot must provide that, if the amount owing is not paid within the time period required by the order, the strata corporation may sell the strata lot at a price and on terms to be approved by the court.

Costs added to amount owing

118  The following costs of registering a lien against an owner's strata lot under section 116 or enforcing a lien under section 117 may be added to the amount owing to the strata corporation under a Certificate of Lien:

(a) reasonable legal costs;

(b) land title and court registry fees;

(c) other reasonable disbursements.

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