FREQUENTLY ASKED QUESTIONS

 
What are AGM and SGM Documents for?
What are Insurance documents for?
What are Minutes documents for?
What are Bylaws documents for?
What are Financial Statement documents for?
What are Depreciation Report documents for?

These are the official records for Annual General Meetings and Special General Meetings.

 

The AGM happens at the end of the the strata corporation's fiscal year. This yearly meeting is when council reports its progress to owners, and lays out its plans budget for the coming year. There may be votes on special resolutions for all sorts of things such as:

  • Adding or changing bylaws

  • Increasing strata fees

  • Raising funds for special levies

  • Renewing or deferring a depreciation report

  • Changing property management companies

  • Moving funds from the CRF to the operating budget

  • Etc.

This is also a chance for owners to be together in one room so that they can candidly discuss the building's state of affairs, and to help foster a sense of community. The strata council is chosen at the AGM. There must be a quorum of 1/3 of eligible voters, either in-person or by proxy (meaning that an eligible voter who will not be in attendance has given their vote to someone who will be).

A Special General Meeting is supplemental to an AGM and can happen any time of the year. An SGM usually relates to a problem that requires a vote by owners, but that needs to be resolved immediately, rather than waiting until a scheduled AGM.

The strata corporation renews its insurance policy on an annual basis. The policy covers common property, common assets, buildings on the strata plan, and original fixtures. The insurance document contains information about the insuring agreement, deductibles, and policy limits.

The strata corporation's policy does not cover an individual owner's belongings, or their individual unit. Owners must purchase their own insurance to cover these things.

The strata council meets on a regular basis, but since there is no specified schedule in law, the frequency could vary from once a month, to every other month, to once per quarter. During the meeting, a quorum of council members must be present (or call-in), and minutes must be taken to provide a record of the proceedings.

 

The topics of discussion are vastly different from strata to strata, depending on the state of the building, and even the personalities of the people on council. Topics may include:

  • Upcoming work and restoration efforts

  • Noise complaints

  • Plumbing leaks

  • Problematic tenants

  • Legal issues

  • Displeasure with the property manager

  • Budgets

  • Special levies

  • Security issues

  • Etc.

 

Of all the documents provided to a prospective buyer, the minutes are the most important as they give a picture of the building's mood, and whether or not the council is proactive. Unfortunately, minutes are often intentionally kept vague to conceal problems in the building.

These are the rules and bylaws that an owner, a tenant, and anyone else visiting or residing in the property must abide by. The difference between rules and bylaws is that rules only apply to common property, whereas bylaws cover both common property and the use of individual strata lots (i.e. your own unit). Standard Bylaws are part of the BC Strata Property Act and a strata corporation can amend the Standard Bylaws through a 3/4 vote, and by filing the changes with the BC Land Title Office. The strata council can enforce rules and bylaws by imposing fines on the offending owner.

Funded by the strata fees paid by owners, the strata corporation pays for common expenses such as:

  • Scheduled maintenance

  • Janitorial service in common areas

  • Property management services

  • Accounting

  • Waste management

  • Plumbing and HVAC

  • Security

  • Insurance

  • Utilities for common property

  • Etc.

 

The financial statement comes at the end of the strata corporation's fiscal year, and reports on its actual income and expenses for that year. The statement must contain:

  • Opening and current balances of both the operating fund and the contingency reserve fund

  • Expenditures from both the operating fund and the contingency reserve fund

  • In-depth detail of income from all sources, except special levies

  • High-level accounting of income and expenditures from special levies, if any

 

The statement contains the planned budget for the year that just ended, and compares it to the actual outcomes. It also contains a budget for the upcoming year based on the current strata fees. It may contain a budget with increased strata fees to cover additional forecasted expenses, or to grow the contingency reserve fund.

A depreciation report is very thorough document, created by a professional engineer, to inform the strata council and owners of:

  • All of the repairs and upgrades that the building needs, or that should be considered

  • A timeline for when each of these tasks should be performed

  • The estimated cost of each of these tasks

  • Recommendations for how the strata corporation can raise the necessary funds

 

The depreciation report offers a very transparent view of all of the necessary and recommended work that the building should undertake in the next year, five years, and even ten years. This allows strata council, owners, and potential buyers to plan and budget for many years in the future. Also, any task in the depreciation report only requires a 50% vote, as opposed to the usual 75%, which means that it is easier to proceed with these tasks.

 

While British Columbia law requires strata corporations to renew their depreciation report every three years, a 3/4 vote can defer this renewal on a yearly basis. Some strata corporations believe that the cost of a depreciation report is too high, and choose to create an in-house maintenance document instead. Under fully transparent circumstances, and when prepared by a professional, a maintenance document can be as good as a depreciation report. However, some stratas defer the renewal to avoid paying for required repair work. If a building does not have a depreciation report, the Minutes should be reviewed to determine the reason.

 
 
 
 
 

©2018 by

  • Facebook Social Icon