Strata Conversions – Stratifying an Existing Building
by Ben Hagen
If you own an un-stratified duplex, triplex, apartment or any other multi-unit residential building and are seeking to transfer the units to purchasers or family members, a strata conversion provides a method of transferring title to the units without requiring any new construction. Essentially, converting to strata turns your rental units into condos that can be sold separately from one another.
A strata conversion allows an owner to divide a previously occupied building into strata lots, which can then be transferred to third parties. Municipal approval for a strata conversion is required in accordance with the Strata Property Act.
Owners should consider many factors before submitting a strata conversion application, including: their relationship with their tenants, the location and zoning of the property, the age and condition of the building and the market for the sale of the strata lots.
This article briefly discusses how to apply for strata conversion with the City of Vancouver.
The City of Vancouver issued the Strata Title and Conversion Guidelines to help applicants navigate the municipal approval process, and streamline City’s decision-making. The Guidelines estimate the conversion application process takes 8 to 10 weeks. However, owners should bear in mind that additional steps are required both before and after the application process.
One of the goals of the Guidelines is to ensure that the rights of existing tenants are protected. As a result, the owner must obtain written consent from at least 2/3 of the households in the building and demonstrate that the interests of all existing tenants have been adequately respected throughout the process.
The conversion application is submitted to the Subdivision and Strata Title Group and must include the following documents:
- A letter stating the property address and legal description of the site and providing the names and mailing addresses of the persons occupying the building, together with the proposals by the owner developer for the relocation of persons who may be affected by the proposed conversion.
- A site plan showing:
- the location and dimensions of the site boundaries and the area of the site;
- adjoining street names;
- the location, size, shape and siting (including setbacks) of all existing and proposed buildings or additions, including accessory buildings; and
- the location and dimensions of all off-street parking and loading spaces, manoeuvring aisles and access driveways from streets and lanes.
- A floor plan showing:
- the dimensions of all rooms and halls, and all outside dimensions including balconies and decks; and
- the areas of the building designated as strata lots, common property and limited common property.
- A notarized declaration stating:
- that each person occupying the building has been given written notice of the intent to convert the building into strata lots under the Strata Property Act together with the date of notice;
- the number of units occupied on the date of the notice;
- that notices have been posted in conspicuous places in the building, advising of the intent to convert the building into strata lots under the Strata Property Act; and
- that each person occupying a unit in the building has been provided with prospective sale prices, example management fees and a copy of the declaration of the building quality.
- A written report from a registered architect, engineer, or any other person, in a form acceptable to the City Building Inspector, that the building is of a reasonable quality for its age, including reference to the state of repair, general workmanship and measure of compliance with relevant City By-laws.
- A non-refundable processing fee (currently set at $4,550.00), payable to the City of Vancouver.
Steps After the Application
After the application is submitted, the City will send each tenant an information brochure on strata conversions as well as a copy of the Guidelines. The tenants are also provided with a tenant response form to be completed and returned to the City. The City Building Inspector and Engineering Department are then asked to comment on the application. If the building contains more than six residential units, the application will be sent to the Manager of the Housing Centre for comments.
The application can be approved, refused, or approved in principle and subject to conditions. Once approved, the owner is required to provide formal lease termination notices to the tenants. The owner can then proceed with the additional steps required to complete the stratification, including: preparing the strata plan, marketing and selling the strata lots (which may include filing a disclosure statement under the Real Estate Development Act depending on the number of lots).
If you need help with the strata conversion process and eventual sale of your strata lots, please contact a member of Bell Alliance’s commercial real estate team and we would be happy to assist.