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How To Stratify A Property

If you own property that has the correct zoning then you may be able to create a strata on that property. This has become popular with owners to capitalized on new potential for their property as part of Kelowna’s infill project, and for developers to take advantage of development in desirable areas of Kelowna. In order to create a strata there are certain steps and processes that need to be followed. This article offers a very general guide to that process.

The strata created can be two, three, or four units. You will need to work with the City of Kelowna to confirm you have the correct zoning, and then obtain the necessary permits and approvals to begin work. Once that step has been completed and construction is underway you can connect with a surveyor to survey the property. The surveyor will tell you what stage the construction needs to be at in order for the survey to be prepared; it is best to reach out to a surveyor early in your build process so they are aware of the timeline for construction and can therefore plan accordingly.

Once the surveyor has prepared the survey it will be provided to the lawyer. The lawyer prepares additional documents that need to be signed by the owner, the owner’s lender (if applicable), and possibly other third parties. When the lawyer looks at title to the property they will determine which entities need to sign which documents.

One of the documents the lawyer may prepare is the bylaws for the strata. It is best for an owner/developer to prepare custom bylaws for the strata that are more appealing to potential purchasers; this could mean the bylaws either allow or prohibit rentals as well as short-term use (i.e. Airbnb), possible restrictions on smoking and cannabis, and modifications to the number of pets that a strata-owner can keep. If the owner/developer of the strata does not create custom bylaws then there are standard bylaws which apply; however, these standard bylaws may not be as desirable for a potential purchaser so the bylaws should be considered and discussed with the lawyer and realtor early on.

Once the lawyer has prepared the documents, and once those documents have been signed by the appropriate parties (all managed by the lawyer) then the lawyer will submit the documents to the land title office for registration. Once the documents are registered at the land title office the strata will be created meaning there will be legal title to each individual strata lot.

Once the titles are created for each individual strata lot, the strata lots can then be sold to purchasers. As the owner/developer you can enter into a contract to sell a strata lot before the strata lot exists, but the actual transfer of the legal title cannot take place until after the titles are created. Your lawyer will assist with these contracts and will explain the timing of the sales in more detail.

If you are looking to create a strata development please reach out to your lawyer early on to have a conversation about the type of project you will build, the timelines, key terms for contracts, and an overview of how to create and ultimately sell your strata lots. If you have questions about your strata project please reach out to Alison McLeod at 250.979.2561 or [email protected]. Alison is a partner at Doak Shirreff Lawyers with a practice in real estate and business law.

This article is not to be taken as legal advice for any legal matter and only provides general information; if you have legal questions please reach out to Alison McLeod for legal advice for your specific circumstance.