Strata

A strata is a legal structure of property ownership in which each owner holds title to an individual unit — called a strata lot — and shares ownership of common property such as hallways, roofs, elevators, parking areas and the underlying land with every other owner in the development.

How strata ownership works in Canada

"Strata" is the term used in British Columbia, where these developments are governed by the provincial Strata Property Act. Other provinces use "condominium" for the same concept, but the structure is comparable: separate title to a unit plus shared ownership of common elements.

Every owner in the development automatically becomes a member of the strata corporation, a legal entity run by an elected strata council. The corporation collects monthly strata fees to fund common-area maintenance, shared utilities, management costs and a contingency reserve fund for major repairs.

Why strata matters when you get a mortgage

Lenders treat a strata lot differently from a freehold home, because part of your monthly housing cost sits outside the mortgage itself:

• Strata fees are counted as a housing expense in the lender's GDS and TDS ratio calculations, so a higher fee leaves less room for mortgage payments.
• Lenders and their appraisers review the corporation's budget, financial statements, insurance coverage and, in British Columbia, its depreciation report.
• Special levies for large repairs are a risk to the owner, not the lender, but a history of them can raise questions during underwriting.
• Strata insurance covers common property; owners generally arrange their own coverage for the inside of the unit.

A simple comparison helps. Buying a strata townhouse means adding the monthly strata fee to the mortgage payment when judging affordability, while a freehold house of similar price leaves maintenance, insurance and repairs to the owner directly. Neither is automatically cheaper; the costs simply appear in different places.

Documents to expect

Because the corporation's health affects the security, lenders and lawyers commonly ask for a status certificate, an estoppel certificate or a Form B Information Certificate in British Columbia. It summarizes fees, arrears, reserve fund balance, pending litigation and special assessments. Weak reserve funds or unresolved disputes can slow or block financing, so review these documents before conditions are removed.