When buying a strata property, most of the time your offer will include a subject that the seller must provide various strata documents to the buyer by a certain date.
As part of your mortgage approval, the lender will ask for the Form B, which cannot be more than 30 days old, and possibly other strata documentation as well.
The Form B: discloses information about the strata corporation and lot. An owner, purchaser or person authorized by the owner or purchaser may request a Form B. This confirms what the current situation is of the strata and if there are any special assessments outstanding, special levies, and how much is in the contingency reserve fund. This information is important to the lender as it gives them an indication as to the condition of the property.
Lenders may also ask for additional documents, which may include:
- 1. A depreciation report.
- 2. The last strata meeting minutes.
- 3. The last AGM minutes.
- 4. If there was a special assessment, they may ask for details on that.
- 5. If there was an engineer’s report commissioned, they may ask for details on that.
Lenders vary on what they require so best to work with your realtor on providing these documents and ensuring they are available. Don’t leave this to the last minute – a rush order for strata documents can increase from the standard fee (approximately $35 – $50) to over $150 if the request is urgent!
As a buyer, you should be sure to give yourself enough time to go through the strata documents and disclosure statement, to make sure you understand what is included in your strata fees. The documentation should provide a detailed description of what your fees cover, and should also include a budget. While strata fees will vary depending on the building and property, they should cover maintenance of common property, insurance for common areas, landscaping of the grounds, and building amenities.
Remember, the strata fees will be on top of any mortgage and other payments you will have to make!
Strata fees and other costs make determining how much of a mortgage you can afford challenging. A mortgage broker can crunch the numbers and help you find out how much of a mortgage you can afford, and will take into consideration your strata fees and other costs so you don’t have any surprises.
Call me today to talk about how I can help you find the perfect mortgage for your situation today!