Navigating Strata Sections: The Form F Certificate Requirement Explained
In British Columbia's complex strata property landscape, a common question arises for mixed-use developments: when a strata lot sells, must each section within a strata corporation issue its own separate Form F payment certificate? This question has become increasingly relevant as more strata corporations incorporate sections for different property uses.
The Legal Framework of Strata Sections
According to strata property expert Tony Gioventu, sections within strata corporations are created by bylaw and function as additional legal entities alongside the main strata corporation. These sections possess the same powers and duties as the strata corporation itself, operating in parallel rather than subordinate to the main organization.
Gioventu explains that sections typically form when different property uses exist within a single strata corporation, such as combinations of commercial and residential units, or apartments alongside townhouses. Within each section, exclusive expenses are allocated, an executive council is elected, and additional bylaws specific to that section may be established.
The Form F Certificate Dilemma
The central question from property managers and strata councils concerns the sale process. When a strata lot sells in a development with multiple sections, each section must indeed provide its own Form F certificate to confirm no monies are owing to that specific section.
This requirement holds true regardless of whether one management company oversees both the strata corporation and its sections, or separate companies manage different components. Even when a single management company handles all operations, separate Form F certificates must be issued by both the strata corporation and each relevant section.
Management Considerations and Best Practices
Gioventu emphasizes several important considerations for property management companies working with strata sections:
- Separate agency agreements must be maintained with both the strata corporation and each section
- Clear identification of the principal client (typically the strata corporation) is essential
- While management of meetings, collections, and financial operations is often consolidated for efficiency, legal separation must be maintained
- Annual general meetings should not blend section business with corporation business
The expert advises that separate notices must be issued for section meetings, with only those identified within specific sections receiving notification. This ensures clear records and prevents obligations from becoming muddled between the corporation and its sections.
Practical Implications for Property Transactions
For sellers, buyers, and real estate professionals, the requirement for multiple Form F certificates means additional steps in the transaction process. However, this precaution protects all parties from potential liability for undeclared fees or outstanding balances.
Gioventu recommends that both sellers and buyers obtain Form F certificates from all relevant entities – the strata corporation and each applicable section. This comprehensive approach ensures complete transparency regarding financial obligations and prevents surprises after property transfers occur.
As mixed-use strata developments continue to grow in popularity across British Columbia, understanding these requirements becomes increasingly important for property managers, strata councils, and individual owners navigating the complexities of shared property ownership.
