STRATA LIVING … WHAT YOU NEED TO KNOW

THE SCARCITY of land, particularly in Kingston and St Andrew, for multi-family development usage, along with the consistently high demand for housing, has made highrise/apartment developments more practical and lucrative for developers. These are typically strata developments. But what is a strata development or strata corporation as they are legally known, and what are the requirements and expectations of strata living? The strata corporation is created when the developer registers the strata plan with the Office of Titles. They are also assigned a Strata Plan Number.

Developers are required to provide in writing to purchasers of a strata unit:

• Estimated maintenance cost and what each purchaser would be required to pay, based on unit entitlement

• List of common facilities to be provided

• Proposed by-laws

• An estimate of the unit entitlement of the strata lots

• The sum to be paid for maintenance

• A list of other payments that may be applicable (e.g. maintenance contributions)

• A list of specific items covered by the sum paid for maintenance.

Strata Living

In strata corporations, there is individual ownership of strata lots as well as shared ownership over the common areas. The Registration (Strata Titles) Act identifies the boundaries of a strata lot as “the centre of the floor, wall or ceiling between such strata lot”. The owner therefore has title to the inner sections of the unit while the corporation has ownership of, and responsibility for, the external sections. External sections include the roof, common plumbing, common lighting, laundry facilities and any other amenities that exist.

Strata properties must establish an Executive Committee to, among other things, control, manage and administer the common areas for the benefit of all proprietors. The Executive Committee is elected at an annual general meeting and consists of at least three (3) proprietors and may have a maximum of nine (9) members.

The Executive Committee is also charged with keeping minutes of meetings, keeping proper accounting records, preparing and presenting accounting records of monies of the corporation at annual general meetings, and facilitating the inspection of the accounts by a proprietor or any other duly authorised person, including the Commission of Strata Corporations. The Executive Committee is also responsible for the filing of annual returns to the Commission of Strata Corporations within 120 days of the end of a financial year. Annual returns include audited financial statements or a copy of the accounts prepared in accordance with generally accepted accounting principles for the entire financial period just ended, minutes of general meetings and proof of insurance coverage or a unanimous decision not to insure.

THE COMMISSION OF STRATA CORPORATIONS

In 2010, the Commission of Strata Corporations (CSC) was established to monitor, regulate and supervise the functioning of strata corporations and keep a register of such corporations.

The commission also facilitates the resolution of disputes, in particular those between a corporation and a proprietor. A proprietor or a corporation can make an application to the Commission for Dispute Resolution and Order using the appropriate form which is available on the commission’s website. This mechanism seeks to bring the parties to a neutral setting so that the issues can be fully ventilated and an agreement reached by both parties, guided by the dictates of the Act. If an agreement cannot be reached, the commission has the power to issue an order to address any breach noted.

The CSC has the power to issue a corporation a certificate of a Power of Sale in respect of a strata lot where a proprietor defaults in the payment of contributions to the corporation in excess of 30 days.

In its quest to provide information, the commission has produced and made available to buyers and developers, including the National Housing Trust, A Buyers Guide to Strata Corporations which outlines a variety of issues and responsibilities related to strata living.

CONTRIBUTIONS AND BY-LAWS

The payment of contributions in the form of maintenance is one of the main ongoing costs associated with owning a strata property and is informed by an agreed budget presented at a general meeting. The proprietor is responsible for making monthly maintenance contributions to the maintenance fund established for the control, management and administration of the common property, for the payment of insurance premiums, or any other obligations.

The First and Second schedules of the Registration (Strata Titles) Act, establish basic by-laws or rules which are applicable to all strata corporations. However the corporation can make changes to the First Schedule by-laws with a resolution passed by 75 per cent of the proprietors, while the by-laws established in the Second Schedule can be varied by the corporation by a majority vote. It is the responsibility of the individual proprietor to make themselves aware of the by-laws which apply to their corporation.

CONCLUSION

If you live in or decide to live in a strata development, the key is to be considerate and respectful to your other proprietors and treat them as you would want to be treated. In doing so, you will only take action or make decisions that will maintain or improve your property’s value over time. Non-conformity to established by-laws stands to decrease the value of your property and the substantial investment you have made. Since the amendment of the Registration (Strata) Titles Act in 2009, which created the commission, many corporations are now better maintained and managed, thereby improving their values.