When a new strata is created, the developer is called the “owner developer.” They are automatically part of the strata corporation because they own the unsold units. The strata corporation is legally formed when the strata plan is registered at the BC Land Title and Survey Authority.At the beginning, the developer typically has significant control because they still own most of the units.

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Strata Fees and Payment

The developer must pay strata fees on any units they still own, just like any other owner.
This includes:

• Monthly strata fees
• Contributions to the contingency reserve fund
• Special levies (if approved)

Their share is based on the unit entitlement for each unsold unit. This means the more units they still own, the larger portion of the strata budget they must cover.

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Voting Rights

The developer has voting rights for each unit they own.
This means:

• They can vote at general meetings
• Their votes can significantly influence decisions early on
• Their voting power decreases as more units are sold

Once owners purchase units, those new owners gain voting rights and the developer’s control gradually reduces.

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Strata Council Participation

In the early stages, the developer often appoints or controls the initial strata council. This is done to manage the property until enough units are sold and owners are ready to take over.However, after the first Annual General Meeting (AGM), owners can elect their own strata council. The developer can still sit on council if they own units and are elected, but they are no longer automatically in control.The developer’s involvement generally ends when:

• Most or all units are sold
• Owners take full control of the council
• The developer no longer owns units in the strata

At this point, the strata is fully owner-run.

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Timeline of Developer Involvement in a New BC Strata

Step 1 – Development and Registration

• The developer builds the project.
• The strata plan is registered, officially creating the strata corporation.

Step 2 – Initial Control

• The developer owns all units and controls decisions.
• They set the first budget, strata fees, and bylaws.

Step 3 – Units Begin Selling

• New buyers become owners and members of the strata.
• Voting rights begin shifting.

Step 4 – First AGM

• Must be held within a set period after the first sale.
• Owners can elect their own strata council.
• The developer’s control starts to decrease.

Step 5 – Transition Period

• More owners move in and take leadership roles.
• The developer may still vote and participate if they own units.

Step 6 – Full Owner Control

• The developer has sold most or all units.
• Owners manage the strata fully.

Step 7 – Developer Exit

• The developer no longer pays strata fees or votes.
• They are no longer on council unless they still own a unit.

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This structure helps ensure a smooth transition from construction to a fully functioning owner-run community.

Red Flags to Watch for in New Developments

1. Strata Fees That Seem Too Low

Developers sometimes set initial strata fees low to make units more attractive to buyers.
However, this can mean:

• Fees may increase significantly in the first few years
• The operating budget may be unrealistic
• The contingency reserve fund may be underfunded

2. Incomplete Construction or Deficiencies

Pay attention to reports of:

• Water leaks
• Building envelope issues
• Elevator or HVAC problems
• Warranty claims

Frequent complaints about deficiencies can indicate construction quality concerns.

3. Large Warranty or Repair Discussions

New buildings are covered by the Homeowner Protection Act through the 2-5-10 home warranty program, but ongoing repair issues discussed in meetings could indicate future costs or disputes with the developer.

4. Developer Retaining Too Many Units

If the developer still owns many units:

• They may still control votes
• Rental units may increase
• Decisions may not reflect owner-occupiers’ interests

5. Delays in Completing Amenities

Watch for delays with promised amenities such as:

• Gyms
• Rooftop patios
• Landscaping
• Parking areas

Sometimes these are completed later than expected.

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Reviewing Strata Meeting Minutes During Transition

Meeting minutes are one of the best ways to understand what is happening in the building.Look for information about:Financial health

• Budget changes
• Fee increases
• Reserve fund contributions

Construction issues

• Warranty claims
• Deficiency repairs
• Insurance claims

Strata governance

• Developer involvement in voting
• Election of owner councils
• Changes in bylaws or rules

Community concerns

• Noise complaints
• Rental issues
• Parking problems

Meeting minutes provide insight into how the building is operating and whether there are emerging concerns.

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Important Questions Buyers Should Ask When Purchasing a New Development

About the Developer

• What other projects has the developer completed?
• Are there past warranty or litigation issues with their buildings?

About the Strata Budget

• Is the initial operating budget realistic?
• How much is being contributed to the contingency reserve fund?

About Developer Control

• How many units does the developer still own?
• Has the first Annual General Meeting been held?
• Are owners now controlling the strata council?

About Construction Quality

• Are there any known deficiencies or warranty claims?
• Has the building envelope been inspected?

About Insurance and Maintenance

• What is covered by the strata insurance?
• Are there maintenance plans for major building systems?

About Future Costs

• Are strata fees expected to increase?
• Are any special levies anticipated?

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 Final ThoughtBuying a brand-new strata property can be exciting and offers the advantage of modern construction and warranties, but it’s important to review the early governance, finances, and developer involvement carefully. Understanding these details helps buyers make informed decisions and ensures the building is transitioning smoothly to a fully owner-run strata corporation.