Buying a Strata? Essential Strata Documents To Review

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Buying a strata/condo, whether a townhouse or an apartment, isn’t just about choosing the right home – it is also about understanding the strata corporation that comes with it.

The building’s financial health, governance, and long-term planning directly affect your investment. That is why a thorough strata document review is one of the most important steps in the purchase of a strata property.

Strata documents are important for a purchaser of a strata property as they give you a behind-the-scenes look at:

• How well the building is maintained

• The financial strength of the strata

• Whether major repairs are coming soon

• How the community operates, behaves and makes decisions

• Whether you will face unexpected costs or special levies

Strata documents may be thought of as the “home inspection” for the entire building, not just your unit.

Essential Strata Documents Every Buyer Should Review

1. Form B Information Certificate

Provides a snapshot of the strata’s overall health, including monthly fees paid by owners, upcoming special assessments, summary of insurance coverage, bylaw updates, ongoing legal proceedings, and parking and storage allocations.

2. The Strata Plan

Shows exactly what you are purchasing, and includes the layout of the building, common property, limited common property, and the size and boundaries of your unit.

3. Meeting Minutes

Perhaps the most revealing documents. Minutes highlight ongoing disputes, maintenance concerns, owner complaints, budget discussions, and upcoming projects. Buyers should obtain at least two years of meeting minutes to get a fulsome understanding of the strata.

4. Strata Bylaws and Rules

Outline how residents may use their property. Common topics include pets, rentals, renovations, noise, smoking, parking, and storage.

5. Depreciation Report

One of the most critical documents. It outlines the condition of major building components, estimated replacement timelines, projected repair costs, and long-term funding. This document helps buyers anticipate future special levies/assessments. A very negative report may affect mortgage eligibility.

6. Engineering and Consultant Reports

These reports dig deeper into structural and mechanical issues. Pay close attention to end-of-warranty reports, water ingress issues, envelope concerns, and mechanical system assessments. Problems arising in these reports may not yet be present in the strata’s meeting minutes.

7. Strata Insurance Documents

Review the strata’s deductibles, coverage limits, exclusions and claims history. High deductibles may result in significant out-of-pocket costs for owners. Obtaining your own insurance policy is essential to mitigate these deductible expenses.

8. Financial Statements

Assess the financial statements to ensure that the operating budget makes sense, the contingency reserve fund is adequately funded, and that expenses are not rising faster than fees. If the strata has low reserves, it may rely on frequent special levies.

9. Annual Operating Budget

Shows how your monthly fees are used and whether the strata is planning responsibly.

10. Disclosure Statement (if applicable)

A disclosure statement is applicable for new buildings. It is an important document for understanding parking and storage allocations, long-term contracts and shared facility arrangements. These details may impact your use and costs for years.

11. Long-Term Lease or License Agreements

Some parking stalls or storage lockers may be under special agreements and not owned in conjunction with your strata unit. Review the terms carefully.

12. Air Space Parcel Easement Agreements

If your building shares land or amenities, such as parking, with another development, this document explains the cost-sharing and responsibilities.

13. New Home Warranty Documents and Claims History

For newer buildings, review remaining warranty coverage, if any claims have been filed, and whether any issues remain unresolved. Warranty disputes may signal broader issues with the building.

14. Legal Proceedings

Any lawsuits involving the strata may lead to significant financial implications for owners.

Red Flags Buyers Should Watch For

When reviewing the above documents, buyers should be alert for:

• Compliance with the Strata Property Act (a lawyer can assist you in determining whether the strata is in compliance with the SPA)

• Low contingency reserves

• Repeated or escalating complaints

• Evidence of water leaks or building envelope problems

• A history of special levies

• Upcoming major repairs

• Conflicts within council or with owners

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Why Should a Parent Document a Loan to a Family Member?

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In today’s housing market, it is increasingly common for parents to help their children financially when buying a home. Although the parent’s intention—whether the funds are meant as a gift or a loan—may be clear at the outset, circumstances such as death or changing family relationships can create uncertainty over time. This is why proper documentation is essential. Clear records protect all involved and preserve family relationships by preventing misunderstandings down the road.

Understanding the Legal Presumption

When a parent transfers money to an adult child without receiving anything in return, the law generally presumes that the transfer is not a gift but is instead held on trust by the child for the parent.

This is because the law presumes bargains, not gifts to adult independent children. In other words, while the child may have legal ownership of the money, the parent is considered the beneficial owner.

This is called the presumption of resulting trust. It applies unless evidence shows that the transfer was intended as a gift.

The presumption can lead to complications if a dispute arises later, particularly when there is no clear record of what the transferring parent intended (gift versus loan) at the time of the transfer.

Making Your Intentions Clear

To avoid confusion and potential disputes, it is critical to establish, from the outset, whether the money is intended as a gift or a loan. If the parent intends the funds to be a loan, certain steps should be taken to document this clearly:

  1. Create a Written Loan Agreement: Courts focus on the intention of the parent at the time of the transfer. A written document illustrating the parent’s intention, prepared contemporaneously with the transfer of funds, provides the strongest evidence of this intent.
  2. Specify Repayment Terms: The loan agreement should outline the terms of repayment, including any interest, schedule of payments, and consequences of default. Even a simple repayment plan reduces ambiguity as it demonstrates the expectation of repayment.
  3. Keep Documentation Accessible: Retain copies of the loan agreement, bank transfers, and any correspondence discussing the loan. This documentation can be invaluable if disagreements arise later.

If the funds are intended as a gift, it is equally important to document that intent. A simple Deed of Gift, gift letter or other written declaration can help to evidence the intention of the parent to give the money with no expectation of repayment. This protects both parties and can be used to rebut the legal presumption of resulting trust.

Common Pitfalls

Problems most often occur when nothing is documented at the time of transfer of funds. What begins as a clear oral agreement can become muddled over the years, especially as family dynamics shift – for example, if the child separates from a partner, if siblings become involved, if the parent’s financial situation changes or if someone dies.

Without clear evidence, one party may later claim that the funds were a gift, while the other insists they were a loan. This can lead to costly legal battles and lasting strain on family relationships.

Final Thoughts

Providing financial assistance to family members can be a generous and helpful gesture, but it comes with potential legal and relational complexities. By clearly documenting gifts or loans (specifying repayment terms), and keeping thorough records, parents can protect their interests and maintain harmony within the family. Clear communication and proper documentation ensure that everyone understands the nature of the transaction, preventing misunderstandings down the road.

If you are considering providing financial help to a child or another family member, it’s important to make sure your intentions are clearly documented. The lawyers at Heath Law LLP in Nanaimo can guide you through preparing a loan agreement or gift documentation to protect both your interests and your family relationships. Contact us today to schedule a consultation.

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Real Estate in BC: Misrepresentation in Property Disclosure

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In real estate transactions, parties rely on the information provided by one another to form a clear understanding of the deal.

Mutual trust and honest communication are essential for meaningful engagement among all involved. The act of misrepresentation, whether through a false statement or the omission of a material fact, undermines that trust. Misrepresentation can significantly influence a party’s decision and expose the other to serious legal consequences.

A recent decision, Sewell v. Abadian, a 2025 British Columbia Court of Appeal ruling, illustrates how courts in BC address the issue of misrepresentation by omission.

In Sewell, the seller, a former realtor, failed to disclose in the disclosure statement that an addition to the home did not have a permit, even though it was known to him. He crossed out relevant sections of the disclosure statement stating only that he had not lived in the home himself. The Court concluded that the buyer had reasonably relied on the seller to disclose everything he knew about the property. By crossing out parts of the disclosure statement, the buyer believed the seller was indicating he was unaware of the answers to those questions.

The seller’s omission was found to constitute misrepresentation, entitling the buyer to rescind the deal and recover a $300,000 deposit. The Sewell decision reinforces the legal and ethical responsibility of full disclosure in real estate transactions. It makes clear that silence or selective omission can amount to misrepresentation with serious consequences, and that courts will scrutinize attempts to obscure or withhold material information.

For anyone involved in real estate, this case underscores the importance of transparency and the potential risks of failing to disclose known issues.

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Real Estate: Misrepresentation by Phantom Bidding

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In real estate transactions, buyers rely on information provided by the sellers and their realtors to make informed decisions.

Practices like phantom bidding, where false or non-existent offers are alluded to in order to create a sense of competition, undermine that trust. This deceptive tactic misrepresents the actual interest in a property, manipulating buyers into making higher offers based on misleading information. Such behavior erodes the integrity of the transaction and can damage the credibility of those involved. Tran v. Brickman, a recent 2025 Ontario Superior Court decision illustrates how courts in Canada address issues of misrepresentation.

The seller in Tran fabricated offers, falsely communicating to the only buyer that there were other offers in play. To complete the deal, the buyer would have to increase their offer. The court found that these offers, allegedly made by other parties, were nothing more than “oral puffery.” They were not valid under Ontario’s real estate regulations, which require offers to be in writing.

As a result, these were found to be phantom bids.

The buyer was awarded $28,600 in damages under the loss of opportunity doctrine, recognizing the buyer’s lost chance to negotiate fairly. The ruling reinforced that offers must comply with real estate regulations or they could be seen as phantom bids in Ontario, leading to misrepresentation.

Ontario has taken steps to regulate phantom bidding, including rule changes in 2015 and increased enforcement. British Columbia has seen fewer formal complaints and has therefore not adopted similar regulations, instead continuing to rely upon existing ethical standards. The case law in British Columbia on phantom bidding is limited, however, there are signs of growing attention to the issue. In July 2023, real estate boards across British Columbia’s lower mainland introduced the Disclosure of Multiple Offers Presented form.

This form requires listing agents to disclose the number of offers and brokerages involved, enhancing transparency and aiming to boost buyer confidence in competitive offer situations. Transparency does remain limited, as actual offer details remain hidden.

While not a direct response to phantom bidding, it is a clear step toward increased accountability in offer presentation.

 

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Home Flipping Tax Summary

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What is the Home Flipping Tax and how does it affect you?

As of January 1, 2025, British Columbia’s Residential Property (Short-Term Holding) Profit Tax Act, commonly known as the Home Flipping Tax, came into effect. The tax targets speculative real estate activity by taxing profits from the sale of residential properties held for less than 730 days. The tax applies not just to physical properties but also to the assignment of pre-sale contracts and includes individuals, corporations, trusts, and partnerships.

If you sell a property within 365 days of buying it, you will pay 20 percent tax on the profit. If you sell between 366 and 730 days, the tax rate gradually decreases to zero by day 730 determined by the following formula:

The profit is calculated as the sale price minus the purchase price and any improvement costs. A deduction of up to $20,000 is available if you lived in the home as your primary residence for at least 365 days. This deduction does not apply to pre-sale assignments.

There are exemptions. Some people and organizations do not need to pay or file, including charities, Indigenous nations, non-profits, and government organizations. Other exemptions, such as those for death, divorce, illness, job loss, or relocation, still require you to file a return but may reduce or eliminate the tax owed. Builders and developers will also be exempt if the property was held for construction or development.

Anyone who sells a property within two years must file a return within 90 days of the sale, even if they qualify for an exemption. Failure to file can lead to penalties.

TL;DR:

Who Does It Apply To?

  • Individuals, corporations, trusts, and partnerships
  • Sales of physical properties and assignment of pre-sale contracts

How Much Is the Tax?

  • 20% tax on profit if you sell within 365 days of purchase
  • Gradually decreases to 0% by day 730
  • Profit = Sale price – Purchase price – Improvement costs
  • Up to $20,000 deduction if the home was your primary residence for at least 365 days (does not apply to pre-sale assignments)

Are There Exemptions?

Yes, but you may still need to file:

  • Full exemptions (no tax, no filing): Charities, Indigenous nations, non-profits, government organizations
  • File required, possible reduction/elimination of tax: Death, divorce, illness, job loss, relocation
  • Builders/developers are exempt if the property was held for construction or development

Filing Requirements

  • If you sell within two years, you must file a return within 90 days of the sale, even if exempt.
  • Failure to file can result in penalties.

If you are selling or assigning property in 2025 or later,  you should seek a professional tax advisor or contact us for legal advice to understand the consequences and requirements of such transactions.

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Understanding the Home Buyer Rescission Period in British Columbia

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How the Home Buyer Rescission Period Protects You in BC Real Estate Transactions

Buying a home is a significant financial commitment, and sometimes, decisions made in the heat of the moment can lead to buyer’s remorse. Recognizing this, British Columbia has implemented a Home Buyer Rescission Period (“HBRP”) to offer buyers a safety net. Here’s what you need to know about this essential protection mechanism.

What is the Home Buyer Rescission Period?

The HBRP, often referred to as a “cooling-off period,” is a statutory timeframe during which home buyers can back out of a purchase agreement without incurring severe penalties. This period aims to give buyers the chance to reconsider their decision, seek additional advice, or conduct further due diligence. Further, parties to a real estate transaction cannot waive the right to rescind within the HBRP.

Key Features of the Home Buyer Rescission Period

  1. Duration: The HBRP lasts for three business days. This period begins the day after the buyer’s offer is accepted by the seller.
  2. Scope: The HBRP applies to most residential real estate transactions, including detached homes, townhouses, apartments and condominiums. However, the HBRP does not apply to transactions of real property on leased lands, leasehold interests, property sold at auction, property sold under a court order or the supervision of the court, or property under section 21 of the Real Estate Development and Marketing Act. Further, the HBRP does not provide the right to rescind once title of the property has been transferred from the seller to the buyer.
  3. Notice Requirement: If a buyer decides to rescind their offer, they must notify the seller in writing within the rescission period. The notice must include the identification of the property, the buyer’s name and signature, the seller’s name, and the date that the right of rescission is being exercised.
  4. Costs: Exercising the right to rescind is not entirely free. Buyers who rescind their accepted offer are required to pay the seller 0.25% of the agreed-upon purchase price. If a deposit has been paid, this amount can be paid from the deposit, with the remainder of the deposit to be returned to the buyer. This payment helps compensate the seller for the inconvenience and potential loss of opportunity.

The HBRP is a crucial consumer protection measure. It provides buyers with the time to conduct thorough inspections, secure financing, seek professional advice, and avoid impulsive decisions.

If you are considering purchasing a new residence, visit our FAQ page for definitions, and explore our blogs on real estate law or homeowner liability. Additionally, contact us for assistance in updating your will and trust after your new purchase. For more information, check out our Wills & Estate Law blogs.

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Fraudulent Misrepresentations in Real Estate Transactions: The Truth Hurts, But Lies Kill Contracts

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Understanding Fraudulent Misrepresentations in Real Estate Contracts

A recent decision out of Ontario (1000425140 Ontario Inc. v 1000176653 Ontario Inc., 2023 ONSC 6688) illustrates how fraudulent misrepresentations in real estate transactions can lead to the rescission of the contract. The case involved Aiden Pleterski, the self-described “Crypto King”, and NBA basketball star, Shai Gilgeous-Alexander. The defendants fraudulently misrepresented to the plaintiff, Gilgeous-Alexander, that the luxury home was private and secure, and omitted to disclose the ongoing safety risk of defrauded investors attending the property and threateningly demanding to know where Mr. Pleterski was. There was ample evidence to support the ongoing safety risk, including Mr. Pleterski being kidnapped, held hostage and physically harmed by people he had defrauded. The Court found that the defendants knew of the safety risk at the property. The Court held that the safety concerns of the plaintiff were legitimate and not simply “sensitivities or superstitions.”

The defendants argued that they were shielded from liability by the “buyer beware” doctrine and argued that they did not make any fraudulent misrepresentations. However, the Court held that rescission of the contract was the appropriate remedy in this case, putting the parties back to their original positions.

What is a Fraudulent Misrepresentation?

A fraudulent misrepresentation occurs where a representation of fact is made without any belief in its truth, with the intent that the person to whom it is made shall act upon it and actually causing that person to act upon it. A fraudulent misrepresentation may be a direct lie or a significant omission, also known as a half-truth. Generally, an executed contract for the sale of land can only be rescinded if fraud is present.

What is the “Buyer Beware” Doctrine?

The “buyer beware”, or caveat emptor doctrine operates to protect sellers of land by holding buyers responsible for defects that would be discoverable upon a reasonable inspection. Simply put, a seller is not responsible for everything that could potentially impact a property, but they may be responsible where they knew of, or ought to have known of the presence of the defect and failed to disclose it to the purchaser. As such, fraudulent misrepresentations are one exception to the doctrine. A seller who makes a fraudulent misrepresentation cannot rely on caveat emptor to shield themselves from liability.

Could this Outcome Occur in British Columbia?

Had this case occurred in British Columbia, it is possible that the outcome would be the same. However, it would require exceptional facts. In a case out of the Court of Appeal for British Columbia (Wang v Shao, 2019 BCCA 130), the seller’s omission about a murder on the property was not found to be a fraudulent misrepresentation, and the buyer was not entitled to rescission. In another case out of BC (Karner v Kuhnke, 2021 BCSC 1942), a couple selling a home failed to disclose a geotechnical report identifying a dangerous rock wall behind the house requiring costly remediation work. The sellers only disclosed that some rocks had fallen onto the deck but did not disclose the full extent of the risk. By intentionally revealing only parts of the truth, the buyers were led to believe that the rock wall was not an issue. The Court found that the half-truths told by the sellers regarding the rock wall amounted to a fraudulent misrepresentation. The sellers were liable for the tort of deceit. The plaintiff buyers in this case did not seek rescission, however, rescission of the contract may have been an alternative remedy had they not wanted to keep the property.

If you think you’ve been a victim of a fraudulent real estate transaction, book a consultation with Nanaimo’s best team of legal experts in real estate law and litigation.

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Understanding the Short-Terms Rental Accommodations Act of British Columbia

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How BC’s Short-Term Rental Accommodations Act Affects Your Property

The government of British Columbia has recently enacted new legislation regarding short-term rentals. The Short-Term Rental Accommodations Act (the “Act”) came into effect in October 2023 and will continue to be rolled out over the course of two years. The primary aim of the Act is to address the housing shortage by transitioning short-term rental units into long-term housing options. However, there are certain exemptions to the new legislation including hotels, motels, student accommodations, as well as ski and resort regions, and farmlands.

A short-term rental is defined as the service of accommodation by a property host, in exchange for a fee, that is provided to members of the public for a period of less than 90 consecutive days. The Act limits short-term rentals to where the host utilizes the property as their principal residence, meaning they reside at the residence for a longer period of time in a calendar year than any other place. Further, the property host may offer for rent a secondary suite or an accessory dwelling unit where the property is the host’s principal residence. The principal residence requirement applies to communities with a population higher than 10,000 people, including smaller neighbouring communities. Communities such as Tofino and Whistler are not included in the principal residence requirement, however, their local governments may choose to opt-in to include this requirement.

The Act also imposes obligations on the host of short-term rentals as well as the platform service providers, such as Airbnb and VRBO, to be registered with the province. The host must include their provincial registration number, and where applicable, a business licence number on the rental listing.

The Act will have impacts on short-term rentals found on Airbnb, VRBO and other platforms, however, rentals will still be available where the property is the principal residence of the host. Where it is the principal residence, the host can rent the property, as well as one secondary suite or one accessory dwelling unit.

Do you have questions about turning your primary residence into a short-term rental, or how the Act affects secondary properties? Contact Heath Law to schedule your consultation.

*This blog is up to date as of June 1, 2024*

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Removing a Builders Lien in BC

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I have had a Builders Lien filed against my property; what can I do to remove it?

Generally, a builders’ lien is a charge on property by a person who has supplied work or material to a building under construction. Since builders’ liens are typically simple and inexpensive to file against property, an owner may find themselves in a situation with multiple liens against their title. The filing of a builders’ lien can have an immediate and serious impact. It may affect the ability to gain financing or interfere with the sale of the property. Therefore, it may be necessary for persons affected by a lien to have methods at their disposal to obtain a discharge of the lien.

The Builders Lien Act (“BLA”), ss. 22 to 25, outline procedures for how persons who have interests in the liened property can obtain the discharge of liens. For example, section 24 of the BLA provides that a claim of lien can be cancelled by “giving security”. This process essentially involves money being paid into court. The money paid is considered to be sufficient to cancel the claim of lien and allows the person who has the interest in the property to carry on activities as usual. There are other legal means to discharge a builders’ lien, and our team of real estate and litigation experts can provide you with this advice. Call our office at 250-753-2202 to request an appointment.

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Filing a Builders Lien

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Filing a Builders Lien against the owner of a property for lack of payment

The Builders Lien Act (BLA) can be an important tool for those in the construction industry.

One of the main purposes of a builders lien is to ensure that owners are not able to obtain an improvement to their land without paying for work and materials used to create such an improvement. In order to claim a builders lien a person may be a contractor, subcontractor, or worker as defined under s. 1(1) of the BLA; and have performed or provided work, supplied material or both in relation to an improvement. For example, a subcontractor can file a lien to recover monies owed for improvements made on the construction of a new multi-residential building. Section 1(1) of the BLA provides clarification in the form of definitions of contractor, subcontractor and worker. They are as follows:

  • Contractor: A person contracting with or employed directly by an owner to perform or provide work and/or to supply materials in relation to an improvement.
  • Subcontractor: A person engaged by a contractor or another subcontractor to perform or provide work or supply materials in relation to an improvement. Note that the definition does not include a worker or person engaged by an architect, engineer, or material supplier.
  • Worker: A person engaged by an owner, contractor, or subcontractor for wages in any kind of work, whether employed under a contract of service or not, but the definition does not include an architect or engineer, or person engaged by an architect or engineer.

The BLA also defines an owner as:

  • a person who has any legal or equitable interest in the land on which an improvement is made, at whose request and
    • 1. on whose credit or behalf,
    • 2. with whose knowledge or consent, or
    • 3. for whose direct benefit the work is done, or material is supplied. [section 1(1)]

Filing a builders lien can be complicated as there are many important deadlines. Obtain legal advice and direction from a lawyer when considering filing a lien to ensure that the lien is filed correctly and within the permitted time.

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