Salmon Arm Shuswap strata smarts....."Costly Misunderstanding"

Dear Condo Smarts: We purchased a townhouse in Langley before Christmas in a phased development. We seriously misunderstood what we were getting, and what our costs were going to be. As it turns out, the strata is almost 15 years old. We never considered we were part of the older section, so under new warranties we thought we were safe.

In March, we received an engineering report that shows the first 50 units built in the '90s are leaky condos -- and we have to pay for the special assessments of the leaky townhomes as well. Our inspectors didn't investigate the older units, and no one advised us of the risks. Yes, we'll qualify for a no-interest loan, but considering the payments, we may have to sell and take our losses. Please let people know the risks in a phased strata.

-- Carol and Kevin

Dear Carol & Kevin:

It's important to understand what phasing is and it's important for buyers to read disclosure statements and get their questions answered before the deal is closed.

A phased development is a strata plan that's built, developed and sold in groups over a period of time set out by the developer as part of its master plan.

It can be a few homes -- 10 units divided into two phases, building and selling five at a time -- or 500 homes with 10 or more phases.

Each phase sets out the proposed number of units to be built and when they are projected to be built and completed. Once each phase is ready for sale, the developer files the strata plan for that phase, which in turn creates the titles for each of the units.

Once the phase is registered and the strata plan is filed, it becomes a functioning part of the strata corporation. Strata fees are due on each lot, and each lot exercises voting rights.

(Bylaws regarding pets, rentals or age restrictions can only be amended once the final phase has been conveyed to the strata through its AGM, or if the developer grants permission in writing to adopt such bylaws and the strata votes in favour by 3/4 vote. In a strata with many phases being built over years, it could be a long time before restrictive bylaws can be imposed.)

When purchasing in a phased development, ask how many are still to be built and when they will be finished. You may be in a development that will be under construction for a long time, or at the end of a phase with an already well-developed community.

Once the final phase is complete, all units from all phases are one strata and share all the common expenses, liabilities and use of facilities.

Review the history of the strata, minutes and financials to ensure it is well maintained and serviced and there are no scary surprises, or you may pay for years of use, neglect and dispute.

(Tony Gioventu/Vancouver Province)