Strata Budget

A strata budget is the annual operating plan that projects the strata corporation's income and expenses for the coming fiscal year, and it is approved by strata owners at the Annual General Meeting (AGM). Under the Strata Property Act (SBC 1998, c. 43), the strata council must present a proposed budget to owners at the AGM, and owners vote to approve or reject it. If owners reject the budget, the previous year's budget continues in force until a new one is approved.

Once owners approve the annual budget at the AGM, each strata lot's monthly fee is calculated based on that lot's unit entitlement as a proportion of the total unit entitlement for the strata corporation, as prescribed by the Strata Property Act (SBC 1998, c. 43). The total projected operating expenses, including the required contribution to the contingency reserve fund, are divided across all strata lots in proportion to their unit entitlement. This means a strata lot with a higher unit entitlement will pay a proportionally larger monthly fee.

A strata corporation's annual budget typically includes projected costs for building insurance, utilities, landscaping, snow removal, property management fees, routine maintenance and repairs, and the mandatory contribution to the contingency reserve fund (CRF). The Strata Property Act (SBC 1998, c. 43) requires strata corporations to maintain a CRF for unanticipated or major future expenses, so the budget must include an annual contribution to that fund. The exact mix of expenses will vary by strata corporation depending on the age, size, and amenities of the development.

Yes. Under the Strata Property Act (SBC 1998, c. 43) and its Regulation, strata corporations are required to include an annual contribution to the contingency reserve fund (CRF) in their budget. The minimum required annual CRF contribution is set out in the Strata Property Regulation; consult the current BC Government guidance for the specific percentage thresholds applicable to your strata. The CRF is intended to fund unanticipated or significant future repair and replacement expenses related to common property and common assets.

A buyer is entitled to receive a Form B Information Certificate from the strata corporation, which under the Strata Property Act (SBC 1998, c. 43) must include a copy of the current budget and the most recent financial statements. Real estate licensees acting in a transaction involving a strata lot are required under the Real Estate Services Act (RESA) and BCFSA requirements to ensure material strata documents, including the Form B package, are disclosed to buyers. Reviewing the current budget helps buyers understand the ongoing monthly strata fee obligation before completing a purchase.

If strata owners reject the proposed budget at the AGM, the Strata Property Act (SBC 1998, c. 43) provides that the budget most recently approved by the owners continues to be the operative budget until owners approve a new one. This means monthly strata fees remain at the level set by the prior approved budget in the interim. The strata council must continue efforts to prepare and present an acceptable budget for owner approval.

Yes. Where the approved annual budget proves insufficient to cover unexpected or extraordinary expenses, the Strata Property Act (SBC 1998, c. 43) allows a strata corporation to pass a resolution approving a special levy on owners to raise the additional funds needed. A special levy generally requires a three-quarters vote at a general meeting, unless a different threshold applies in specific circumstances set out in the Act. Each owner's share of a special levy is also calculated according to unit entitlement, consistent with how regular strata fees are apportioned.

Under the Strata Property Act (SBC 1998, c. 43) and its Regulation, most strata corporations with five or more strata lots are required to obtain a depreciation report prepared by a qualified person, which projects the long-term repair and replacement costs of common property and common assets over a 30-year period. The depreciation report informs the strata council about future capital expenditure needs, which should guide how much the annual budget contributes to the contingency reserve fund. Strata owners can vote by a three-quarters resolution to waive the requirement to obtain a depreciation report, but doing so may leave the strata underprepared for major future expenses; consult the current Strata Property Regulation for the applicable waiver rules.

Strata corporations in BC are organizations that collect and use personal information in connection with their operations, including financial records that may relate to individual owners' fee accounts, and they must handle such information in compliance with the Personal Information Protection Act (PIPA) of BC. PIPA requires that personal information be collected, used, and disclosed only for purposes that a reasonable person would consider appropriate, and that reasonable security safeguards be applied. Owners requesting access to strata financial records, including budget documents, should be aware that some information about other individuals may be protected and not fully disclosed.

Yes. When a strata lot owner passes away, the estate becomes responsible for all ongoing strata fee obligations, including amounts set by the current approved strata budget, until ownership is legally transferred to a beneficiary or purchaser. Under the Wills, Estates and Succession Act (WESA) of BC, the executor or administrator of the estate is responsible for managing the deceased's assets and liabilities, which includes ensuring strata fees continue to be paid. Unpaid strata fees can result in a lien being filed against the strata lot under the Strata Property Act (SBC 1998, c. 43), so timely payment remains important during estate administration.