Some History:
In the days before the Condominium Act became law (1972???, later the Strata Property Act), if you wished to own a registered interest in a Condo it is most likely you owned a whole building, or you were able to purchase a sub-lease involving one of many specific condo units in the building.
The entity who owns the whole building has control over all sorts of aspects of the building. This includes all matters to do with the owners of the sub-leases. The terms of a sub-lease are specific to each building.
Operationally, rules are written, in most cases new owners are vetted, and all aspects from rentals to parking are under the control of the building owner.
Financial:
Of particular interest to a sub-lease owner, the lessee, are the capital and operating costs that occur annually and at times when the building components, roof, heating systems, common area facilities are maintained, upgraded or replaced. There is no lessee involvement in the financial aspects, levels of operating maintenance, or planning for capital projects. Charges are divided up in relation to the relative size of your condo, so akin to the Unit Entitlement processes under the Strata Property Act.
However, if operating or project costs go over budget there is no input by the lessees and and invoice is presented for you to pay.
Unit Sales:
The other aspect of these buildings and their sub-leases is the value in the real estate market when a registered owner is moving on. They are typically a cheaper alternative to buying a Strata condo. They are often well sized as they are older properties, but the financial issues mentioned are something for all sellers to make their agents aware of. Similarly a buyer's agent must get all the financial information. In the Strata world a Form B would be requested - it is this same information that needs to be provided for these leasehold buildings. The only way to limit your clients exposure to financial surprises.
Strata Property Act:
An EXCELLENT way to think of the issues and impact of any of this on the registered owner of a sub-lease, is to refer to all the sections of the Strata Property Act.
Some specific areas - but by no means limited to these, would be found under:
There are no By Laws, and therefore you and the other owners have no input into the way the building is operated and the rules under which it is managed.
You are not an owner in fee simple of your unit plus a portion of common property
There is no Strata Council acting on your behalf, and which you can join. Therefore there is no Strata Corporation, or AGM or Special Meetings at which you input can be provided.
There are no monthly Strata Council Meetings that you can attend.
If there is a caretaker, this person is an employee of the building owner
Annual budgets are only provided if deemed desirable by the building owners and you do not have direct input on levels of service or related costs.
Similarly, capital project budgets are only provided if deemed desirable by the building owners and you do not have direct input on he extent and timing of the work.
IN SUMMARY:
Caveat Emptor, and the agents for the seller and buyer need to be able to give you good service and set you up with good knowledge.
In the days before the Condominium Act became law (1972???, later the Strata Property Act), if you wished to own a registered interest in a Condo it is most likely you owned a whole building, or you were able to purchase a sub-lease involving one of many specific condo units in the building.
The entity who owns the whole building has control over all sorts of aspects of the building. This includes all matters to do with the owners of the sub-leases. The terms of a sub-lease are specific to each building.
Operationally, rules are written, in most cases new owners are vetted, and all aspects from rentals to parking are under the control of the building owner.
Financial:
Of particular interest to a sub-lease owner, the lessee, are the capital and operating costs that occur annually and at times when the building components, roof, heating systems, common area facilities are maintained, upgraded or replaced. There is no lessee involvement in the financial aspects, levels of operating maintenance, or planning for capital projects. Charges are divided up in relation to the relative size of your condo, so akin to the Unit Entitlement processes under the Strata Property Act.
However, if operating or project costs go over budget there is no input by the lessees and and invoice is presented for you to pay.
Unit Sales:
The other aspect of these buildings and their sub-leases is the value in the real estate market when a registered owner is moving on. They are typically a cheaper alternative to buying a Strata condo. They are often well sized as they are older properties, but the financial issues mentioned are something for all sellers to make their agents aware of. Similarly a buyer's agent must get all the financial information. In the Strata world a Form B would be requested - it is this same information that needs to be provided for these leasehold buildings. The only way to limit your clients exposure to financial surprises.
Strata Property Act:
An EXCELLENT way to think of the issues and impact of any of this on the registered owner of a sub-lease, is to refer to all the sections of the Strata Property Act.
Some specific areas - but by no means limited to these, would be found under:
There are no By Laws, and therefore you and the other owners have no input into the way the building is operated and the rules under which it is managed.
You are not an owner in fee simple of your unit plus a portion of common property
There is no Strata Council acting on your behalf, and which you can join. Therefore there is no Strata Corporation, or AGM or Special Meetings at which you input can be provided.
There are no monthly Strata Council Meetings that you can attend.
If there is a caretaker, this person is an employee of the building owner
Annual budgets are only provided if deemed desirable by the building owners and you do not have direct input on levels of service or related costs.
Similarly, capital project budgets are only provided if deemed desirable by the building owners and you do not have direct input on he extent and timing of the work.
IN SUMMARY:
Caveat Emptor, and the agents for the seller and buyer need to be able to give you good service and set you up with good knowledge.
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