New strata developments

When buying into a new strata development, it is important to know that the “owner developer” has some unique obligations from when the strata corporation is created until two years following the strata corporation’s first annual general meeting (AGM). 

Learn more on this page:
Definition of owner developer
Creating the strata corporation
Expenses
Contingency reserve fund
Before the first annual general meeting
Preparing for the first annual general meeting
The first annual general meeting (AGM)
After the first annual general meeting (AGM)
Home warranty insurance

Definition of owner developer

Generally speaking, an owner developer is the person who files the strata plan in the Land Title Office. An owner developer can also be a person who acquires all or more than 50% of the strata lots in a strata plan from a person who is registered as the owner when the strata plan is filed. This may result in there being two separate owner developers within a single development.

Creating the strata corporation

The strata corporation is created when the owner developer files the strata plan in the Land Title Office. A registration number will be assigned to the strata corporation, which becomes the legal identity of the strata corporation. Examples of strata corporation numbers are LMS 1234 or KAS 9876. The name of the strata corporation is “The Owners, Strata Plan, (the registration number of the strata plan)”.

Before the first conveyance of a strata lot, the owner developer can amend the Standard Bylaws or create new bylaws by filing a “Form Y: Owner Developers’ Notice of Different Bylaws”.  Examples of new bylaws commonly filed are creating separate sections within the strata corporation and apportioning of common expenses by strata lot type.

A strata corporation is a legal entity created under the Strata Property Act and not the Business Corporations Act. This means the strata corporation does not have an incorporation certificate and the Registrar of Companies does not regulate the strata corporation. 

The BC Financial Services Authority:

• receives Disclosure Statements for filing under the Real Estate Development Marketing Act for strata titled developments consisting of 5 or more strata lots (see BCFSA for current fees)
• searches for and provides copies of filed Disclosure Statements (see BCFSA for current fees)
• receives complaints concerning inaccurate or incomplete Disclosure Statements or marketing without a Disclosure Statement
• approves some schedules of unit entitlement, voting rights and interest upon destruction under the Strata Property Act (see BCFSA for current fees)​

Expenses

The owner developer must pay the actual expenses of the strata corporation that accrue in the period up to the last day of the month in which the first conveyance of a strata lot to a purchaser occurs.

• For example, if the first conveyance of a first strata lot occurs March 12, the owner developer pays expenses up to March 31.

During the period, beginning one month after the first conveyance of a strata lot until the first annual general meeting, if the actual strata corporation expenses exceed the estimated expenses set out in the interim budget, the owner developer must pay the difference to the strata corporation within eight weeks after the first general meeting.

Owner developers who seriously underestimate the interim budget must pay additional amounts to the strata corporation. If the actual operating expenses are more than that set out in the interim budget by:

• 10% to under 20%, the owner developer must pay an additional amount which is equivalent to the excess multiplied by two
• 20% or more, the owner developer must pay an additional amount which is equivalent to the excess multiplied by three

Any penalty owing to a strata corporation by an owner developer underestimating the interim budget can be collected, if necessary, by the strata corporation registering a lien against one of the owner developer’s strata lots, if the owner developer still owns one or more strata lots.

Contingency reserve fund 

At the time of the first conveyance, the owner developer is required to pay a lump sum of money into the contingency reserve fund (CRF).

The minimum contribution into the CRF depends on when the first conveyance of a strata lot in the development occurs.

Effective November 1, 2023, the amounts the owner developer must contribute to the CRF have increased. The minimum amount that the owner developer must contribute to the CRF will be the lesser of:

• 10% of the estimated operating expenses as set out in the interim budget, multiplied by the number of years since the strata plan was deposited, or
• 50% of the estimated operating expenses, as set out in the interim budget.

These amounts have been increased from 5% and 25% respectively.

Before the first annual general meeting (AGM)

When the strata corporation is created, the owner developer must exercise the powers and perform the duties of the strata council.

This means the owner developer must exercise reasonable care and skill when acting as the strata council and always act in good faith with a view to the best interests of the strata corporation. 

• Learn more about the roles and responsibilities of owners, tenants, the strata council, the strata property manager and the strata corporation.

In addition, the owner developer must also:

• prepare a twelve-month interim budget and provide it to prospective purchasers before they sign an agreement of purchase and sale
• pursue all warranty remedies with respect to the construction of the common property and common assets
• ensure that the term of any insurance policy for the strata corporation continues for at least four weeks following the date of the first AGM
• not enter into a contract with the strata corporation after the first conveyance of a strata lot, unless the contract is approved by a unanimous resolution at a special general meeting. Persons who are not at arm’s length to the owner developer also cannot enter into a contract with the strata corporation after the first conveyance of a strata lot, unless the contract is approved by unanimous resolution
• ensure that after the conveyance of the first strata lot but before the first AGM, all resolutions ordinarily requiring approval by a 3/4 vote are passed by a unanimous resolution of the owners
• establish a contingency reserve fund at the time of the first conveyance of a strata lot to a purchaser

Preparing for the first annual general meeting (AGM)

The owner developer is responsible for preparing the strata corporation for its first AGM within six weeks of the earlier of the following dates:

• nine months from the date of the first conveyance of a strata lot or
• the date that 50% plus one of the strata lots are conveyed to purchasers

Giving notice: Notice of the first AGM must be given two weeks prior to the date of the meeting. The Notice must include a description of the matters to be voted on and the exact wording of resolutions requiring a unanimous or 3/4 vote.

The Owner Developer must distribute the Notice, proposed budget and financial statements to: 

• every strata lot owner
• every mortgagee who has filed a “Form C: Mortgagee’s Request For Notification”
• every tenant who: has been assigned a right to vote; or has a lease of three years or more; and if the strata corporation has received notice of the assignment and the time period during which the assignment of lease is effective.

If the first AGM is not held by the required date, the owner developer must pay the strata corporation $1,000 if the meeting is delayed by up to 30 days, and $1,000 for each additional delay of seven days after the initial 30 day period.  If necessary, the strata corporation can collect the amount owning by the owner developer by registering a lien against one of the owner developer’s strata lots, if the owner developer still owns one or more strata lots.

If the owner developer fails to hold the first AGM within the required time, then a strata owner may hold the first AGM by giving two weeks’ notice to all the persons to whom the owner developer should have given notice, and to the owner developer. 

The first annual general meeting (AGM)

The owner developer must provide the strata corporation with the first annual budget and other information, including: building permit plans, strata corporation contracts, warranties and manuals for common property and assets, and all usual records. 

Some of this information will be very helpful for depreciation reports that the strata corporation is required to prepare by the second AGM.

The strata council is elected at the first AGM and the owner developer no longer acts for the strata corporation.

If the owner developer fails to provide the required documents, and the strata corporation must pay money to obtain any missing documents, and it may if necessary collect the sum owing for obtaining the documents from the owner developer by registering a lien against one of the owner developer’s strata lots, if the owner developer still owns one or more strata lots.

Conducting the meeting: The chair of the meeting will be the owner developer either acting personally or through an agent.  If the owner developer is unwilling or unable, an individual elected by the voters who are present in person or by proxy should act as chair.

An owner developer who still owns one or more strata lots is entitled to participate in the meeting as an owner with the voting entitlement of all retained strata lots and is eligible for election to the strata council. If elected, the owner developer must act in the best interests of the strata corporation. 

After the first annual general meeting

The owner developer must do the following: 

Home warranty insurance

In B.C. new homes have home warranty insurance to protect against construction, building envelope and structural defects.

Strata-titled properties have two different types of home warranty insurance:

1. one for common property and
2. one for each individual strata unit.

BC Housing's Licensing & Consumer Services branch (formerly the Homeowner Protection Office) provides new home buyers and owners information on home warranty insurance in British Columbia. 

References:
Strata Property Act Sections: 1, 2, 5-8, 10-23, 45, 116, 121, 245
Strata Property Regulation: 3.1-3.4, 14.6, Part 17
Standard Bylaws (unless amended by the strata corporation or section): 30

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The content on this website is periodically reviewed and updated by the Province of British Columbia as per the date noted on each page: January 24, 2023.