Strata operations: What records are strata corporations required to keep?

0:00 – Overview: Digitizing Strata Records

0:00 Wendy Wall: Thank you everyone for joining us today for this webinar, what records are strata corporations required to keep. My name is Wendy Wall, I'm the president of the Vancouver Island Strata Owners Association, and I want to thank the organizers of the BC Strata Tech conference for inviting us to speak today. So what are we going to cover? Well, you saw that massive pile of paper. Today I want you to think about a strata that has thousands of pieces of paper that they're thinking of digitizing.

0:33 And so what we're going to cover today is, just briefly, the difference in the laws between what property managers have to do and strata corporations, going digital, where should you keep those records and where can you keep those records, what records do you have to keep and for how long, and then we'll just touch on requests for records.

0:45 – Storage Laws for Managers and Stratas

0:58 Wendy Wall: So, storing records. The laws are a little bit different depending on whether you are a strata manager or a strata corporation. So for strata managers, they have to comply with the Real Estate Services Act, the accompanying regulation, rules, and the Personal Information Protection Act, which throughout today I'm just going to refer to as PIPA. So you'll see that the Strata Property Act isn't in that list. So under their Real Estate Services rules, any record that they're required to keep under their rules, they are allowed to keep them as electronic records, they just have to be able to print them.

1:45 And some people say, well, is our property manager allowed to just keep them electronically, and where do they keep them? Well, the Act for the real estate industry says that the records have to be kept in the province of BC. So that could be paper copies, that could be electronic copies. Now for strata corporations it's a little bit different. Stratas have to comply with the Strata Property Act.

2:16 You'll notice that the Real Estate Services Act is not in this list, but we have to comply with the Strata Property Act, the regulation, bylaws — whether it's our own bylaws, standard bylaws or a combination of them — and we also have to comply with PIPA. So, can a strata store records electronically? Well yes, they can. There's no requirement to keep paper copies, but you could keep both.

2:47 And do the records have to be stored in Canada? Well, actually no. There's no requirement under the Strata Property Act or PIPA for a strata corporation to store the electronic records in Canada or even in BC. So this is something that comes up a lot, because people have concerns about the servers, where those servers are located, for example in the United States. So now you're ready to go digital.

3:13 You've got those thousands of pieces of paper and you're wondering where to start.

3:15 – Going Digital: Locating and Storing Records

3:21 Wendy Wall: So the first thing, of course, is, where are they now? In most stratas we don't have a space to store our records, so it's very common, especially if you're in a strata that is 30 or 40 years old, to not know where those records are. Or over time, different secretaries, different council members are all storing some of those records. If you're in a townhouse you might have three different people with records stored in their garages.

3:45 And of course the formats, it can be quite interesting. Sometimes we have things on USBs or in a Google Drive, but sometimes we still have paper, and we might even have some old technology. You might have information burned on CD-Rs or DVDs, or heaven forbid, floppy disks. And then I suggest that the next thing you decide is where do you want to keep your digital records, because that's going to dictate a little bit about how you get organized.

4:18 We've all got those little USBs, but of course they don't have a lot of storage, so you might decide to have a large external drive, and that external drive gets handed from council member to council member as councils change. But there are some great online platforms that are designed just for stratas, and you're going to see some of those things at this conference, and they've got some great features, especially for usability and security and access control.

4:49 You could store in some other online places like iCloud, Google Drive, Dropbox, Sync, but you might find that it's quite labour intensive to continually control access, change passwords, or add individual people who are allowed access to something. Our owners change, our council members change, and it would be very easy to drop the ball and forget to change access settings for some of those things. So just keep that in mind.

5:19 And those problems are generally solved by these online platforms that have been developed specifically for stratas. There's nothing wrong with keeping your records on paper, and there's nothing wrong with having multiple methods. So I know stratas who are storing their electronic records in one of these platforms or sites, they keep certain records on paper as a backup. I know stratas who also back up all their digital records to an external drive and keep that in a safe place.

5:51 Lastly, what do your bylaws say? It doesn't happen often, but sometimes stratas have their own bylaws that say the records must be kept in a locked filing cabinet in such and such a room.

6:02 – Prioritizing Records Under Section 35

6:02 Wendy Wall: It's not very common, but it does happen. So, what records do you have to keep? Well, actually these are all in a list right in the Strata Property Act, section 35. And when you start reading that list it starts to feel a bit overwhelming, your brain might feel like it's exploding. So we're going to break that down into priorities. So some of the high priority records that you might want to digitize first are the real documents that you need when you get requests from Realtors and prospective purchasers.

6:39 But the other high priority I'm suggesting are those records that you are actually required to keep by the Strata Property Act for certain periods of time. The lower priority might be the things outside the time frame. So what I'm saying here is, you might have council meeting minutes for the last 30 years, but perhaps you want to prioritize the ones from the most recent six years, because that's what the Act requires.

7:06 There's nothing wrong with you digitizing all of those other 24 years of minutes, but you don't have to, so you might want to put those lower on your priorities. I do know stratas with thousands of documents that they want to digitize, so just create your own priorities. Another lower priority might be the documents that you have that you're not required to keep by law at all, but you want to keep them.

7:28 – Form B and Documents Buyers Request

7:33 Wendy Wall: So, what documents do your Realtors and prospective purchasers need? They will almost always ask for an information certificate, the Form B. Now, today is April 1st, and so as of April 1st there has been a small change to the Form B. It now requires a summary of our insurance coverage for the strata corporation's policy, so that's a new thing. If you have rules in your strata you have to have a copy of that attached to the Form B, also the current budget.

8:06 The most recent depreciation report has to be there. And then there's various questions in the Form B that you might need documents for. It happens less often, but let's say Mrs Jones enclosed her balcony 10 years ago and signed an indemnity agreement agreeing to take responsibility for the costs of repairs, or the cost of any damage done. You need a copy of that indemnity agreement, you need to disclose it on the Form B.

8:39 If your strata has been involved in a court case or a human rights tribunal or CRT proceeding, you need the documents from those proceedings and any judgments, if any were made. Similarly, work orders. Every so often your local government might come along and say, hey, your facade is crumbling, it's dangerous, we're going to slap a work order on you and you have to get that fixed right away.

9:04 It doesn't happen often, but if you have a work order it needs to be disclosed on the Form B. And then there are some items that are not filed at the land title office yet. So for example, you had an AGM a week ago, you passed a new bylaw, you haven't filed it at the land title office, but the Form B requires you to disclose that you haven't filed them yet.

9:26 So you're going to need a copy of the resolutions that were passed. So some of these things are very, very practical, that a buyer would want to know. Now, although it's not required on the Form B, you all know that there are things that typically every realtor and prospective purchaser will ask for. They often ask for a copy of the bylaws. They will almost always ask for at least two years of council meeting minutes, and also the minutes of annual and special general meetings.

9:58 Don't forget the notices. Quite often the notice of the AGM or SGM contains quite a bit of information that doesn't end up in the minutes, so you should keep those notices as well. And the most recent financial report, or financial reports for a couple of years, those are sometimes asked for.

10:15 – Retention Periods: Current Lists and Correspondence

10:19 Wendy Wall: So now that you've prioritized that high priority item, what do you do next? Well, the next priority that I think are all of the records that are required under section 35. And you might want to base it on how long must those records be kept. Well, the length of time is specified in Strata Property Regulation 4.1. It does get a bit confusing to correlate the two, so I have broken it down here by length of time.

10:49 So let's look first at what you have to keep only the current copy of. A list of council members: so let's say that your council changed two months ago, you only need the current list of council members, you don't have to keep the past ones. Similarly with a list of owners. You have to have a list of the owners' names, their strata lot, mailing address, their unit entitlement for their strata lot, also if they have any parking stalls or lockers, the numbers of those that are assigned to the strata lot.

11:22 We also need to keep a list of tenants. Now, that's just the strata lot and their name. The only other information that you would need is in the occasional time where a landlord has assigned their assignment of rights, so the right to vote at an AGM or the right to run for council. That's when the owner relinquishes their right and gives it to the tenant. Occasionally you might have a mortgagee file a Form C.

11:46 Basically that's just where the mortgage company is saying, hey folks, whenever there's an official notice you have to send it to us as well. So obviously you need a list of those, so that for example when you have an AGM, that you're giving notice of the AGM to those mortgagees. You also have to keep a current copy of the Strata Property Act, regulations, bylaws, and if you have rules, a copy of those.

12:13 Now we go to the time frame for two years. There's only one thing that is listed in the section that is required to keep for at least two years, and that's correspondence. But that's a big one in terms of records. But keep in mind, it's only the correspondence that's been sent or received by the strata corporation. And what that means, for example, is any communications between council and owners, or council and contractors, like a property manager, a janitorial service, whatever.

12:43 It doesn't include correspondence between council members. Now, the records that you have to keep for at least six years. So as we're going through this I hope you're seeing the priorities of what you could digitize.

13:02 – Six-Year Retention: Minutes and Financials

13:02 Wendy Wall: So you have to keep at least six years of the minutes from your general meetings and council meetings. We talked about those Form Bs earlier that you have to issue when requested, the information certificate, so you have to keep copies of those. Also your budgets and financial statements, every single one in the last six years at least, bank statements, cancelled cheques, if you still have old-fashioned deposit books, or you're having receipts from your deposits.

13:31 And then books of account. We generally call those ledgers, and they just show a record of all the money received, all the money spent, and the reasons for those expenditures. Many strata corporations file their income tax returns, so if you have copies of those. And then of course, if you're a newer strata and you had a lot of records transferred over from the owner developer, any of the financial records that they turned over, you have to keep those for at least six years.

14:07 Now, these records, it's six years, but it's after a certain date. So for example, if you had a written contract with a property manager, or you have an insurance policy, you have to keep those at least six years after that contract or policy was terminated or expired. So that could in a sense mean that you're keeping them for decades. Same thing with the ones that the owner developer entered into on behalf of the strata, when they were basically acting as the strata council before the transfer.

14:43 Those policies and contracts have to be kept for at least six years after termination or expiry. And then this one has to do more with, for example, mechanical equipment. You have to keep certain things until that item is disposed of or replaced, and it generally has to do with mechanical systems. So engineers' reports regarding repair and maintenance of major items. So imagine that you have a gas boiler that heats your entire building, and you had a mechanical engineer do a report on that boiler.

15:17 You only have to keep their report until the boiler is disposed of or replaced. Again, the owner developer should have handed over quite a few other things. They might have had operation or maintenance manuals for certain mechanical components, so again you have to keep all of those things until the item is disposed of or replaced. And warranties, you have to keep the warranties until they expire or until the item is disposed of or replaced, whichever comes first.

15:52 – Records to Keep Permanently

15:52 Wendy Wall: Now we're getting into the things you have to keep permanently. So I'm going to start with the things that the owner developer should have given you with the transfer. One is the disclosure statement. Another are the plans, the building plans, the drawings that they had to submit to the local government to get their building permit. Now sometimes those plans don't show everything, so there might be documents that show the location of pipes, wires, those types of things, if they're not already shown on those building plans.

16:21 They also have to give you the names and addresses of all of the contractors, subcontractors and suppliers when they built your strata. We're almost at the end now. You have to keep other things permanently, for example your depreciation report — not just the current one, all of them. You need to keep your registered strata plan, any amendments to that strata plan. You may have had a three-quarters vote to designate limited common property to certain strata lots, you need a copy of that.

16:53 Any decisions from a judge or from a tribunal, and also legal opinions that the strata corporation obtained. Now, what if you don't find those things, or you can't find them? Certain documents are filed at the land title office and you can just purchase a copy, for example your bylaws. And remember that the only bylaws that are in effect are bylaws that are filed at the land title office.

17:21 If you find bylaws that were passed at an AGM from two years ago and they were never filed, they're not in effect. Also at the land title office you can purchase a copy of your strata plan and any amendments, your unit entitlements, really important because that's how you calculate your strata fees. Schedule of voting rights: you need that because you need to know how many votes each strata lot has at your general meetings.

17:49 And like we talked about before, designation of limited common property. So all of those things are things that you can purchase from the land title office. So now that big stack of paper that we started with has gotten a lot smaller. So the question is, can the strata keep other records? Well absolutely, yes you can. It's not a must, it's a may. And you might have things like invoices.

18:14 You might have noticed that that wasn't mentioned, so technically speaking you don't have to keep copies of those at all. Of course, personally, having been a treasurer, I encourage that you keep them, because you do need them to reference when you're reconciling something. They're very, very useful. But just be aware that section 35 doesn't require you to keep them, which means under section 36 an owner can request it but you don't have to give it.

18:47 So VISOA has created what we call a records retention guide. So at 10 o'clock this morning, if you check our Facebook page or our Twitter feed, you'll notice that we're posting this records retention guide. And what you can do is use it as a checklist. It lists the period of time that each of these records has to be kept, and you can just go, as you're digitizing your records, you can just go through that list and check off as you've done each one.

19:18 Now, what about requests for records? Well, as I said, anything that is listed under section 35 of the Act you have to keep, and then under section 36 it gives certain people the right to ask for copies of, or access to.

19:20 – Section 36 Requests and No Redaction

19:35 Wendy Wall: So who can request copies? An owner, a tenant who's been assigned those rights, but also anyone authorized by either of those in writing. We often get this question: does the strata have to fulfill these requests? The answer is yes. The Strata Property Act is very clear, this is a must, not a may, as long as it is a record listed in section 35 and as long as the request has been made in writing under section 36.

20:05 You must give a copy. So for example, we often hear strata councils and property managers who don't want to give over a list of owners. Sorry folks, it is required. So you don't give email addresses or phone numbers, but that owner list must give all of the information that the Act requires, and you must disclose it to anyone who properly requests a copy, or to see it.

20:31 So, can the strata redact names, phone numbers, email addresses? And the answer is no. Even though we have the Personal Information Protection Act, it says that if any other enactment of law, you're still required to give copies of that record. So under the Strata Property Act, anytime someone asks for example for an owner list or a copy of correspondence, they're allowed to have it, and we're not allowed to redact it in any way.

20:59 So if I make a complaint against my neighbour for making noise and they want a copy of the correspondence, the council has to give it to them. They can't redact my name. So I always encourage people, when you're writing to council or the property manager, be professional, and remember that anybody in your strata can request a copy. So just be professional, watch your language, and don't give more information than you have to about yourself if it's not necessary to your complaint.

21:34 Don't give medical information for example, if it's not necessary, because anybody can request a copy of that in your strata.

21:44 – Copy Fees and Inspection Deadlines

21:44 Wendy Wall: Now, can the strata charge a fee for copies of records? Well yes, they can. It can be up to 25 cents per page, and this applies to both paper copies or electronic copies, but you can't charge GST. So sometimes we'll see property management companies that want to do 25 cents plus GST. That's not permitted, it can only be up to 25 cents per page. What if the person doesn't want copies, they just want to inspect the records, can the strata charge a fee?

22:15 The Strata Property Act says no. So unfortunately, if you have a property management company, they do charge fees for supervision when an owner is inspecting records, or they quite often charge fees, the strata corporation cannot charge that back to the owner. It's just going to have to be an operating cost that you absorb. Now, is there a deadline to provide those copies? Yes. So for most of those records under section 35 the deadline to provide them is two weeks.

22:47 But if someone has requested a copy of the bylaws or rules you have to give it within one week. Now, if there are copies of records, not inspection, the strata can refuse to provide the records until the fee is paid. You don't even have to charge a fee, it is optional. But if you are charging a fee you can just wait until the fee is paid before you give the copies.

23:14 So I hope that helps you prioritize and get all of your records digitized, and know where you can store them. If you want to learn more about some of the related topics that VISOA has done some education on, check out our YouTube channel. We've got recordings of our webinars about best practices for strata meeting minutes, there's also preparing for your strata AGM, we have another one on best practices for strata record keeping, and also creating a strata privacy policy.

23:52 So thanks so much. That is our YouTube channel, it's just called VISOA Videos. And if you want to stay up to date, please join our mailing list. If there's no direct link to join, just go to our website and click join mailing list, and we'll keep you up to date with news and resources and all sorts of stuff.

24:11 Ryan Grant: Perfect, great presentation there.

24:15 – Q&A: Managers, Email Chains and Destroying Records

24:15 Ryan Grant: Learned a little bit about a few new things myself. Now, we have some questions here, are you able to see them in the right hand side there? I'm posting some more. I will first just answer the first one, which was general, it wasn't really for you, it was about… People wanted to know about the recordings and slides. So yes, we will be providing recordings to everybody. We'll be emailing you out within one to two weeks.

24:45 It might take us the time to get them up onto our YouTube channel, but we will make sure that all registrants are emailed when that does occur. As for slides, we will try and ask all the presenters, see if they want to provide them, but there's no guarantee that they'll provide us a slide deck to give to people.

25:04 Wendy Wall: Okay, but at least you'll have the recordings.

25:06 Ryan Grant: Yes. So you can go through and just pick and choose which questions you feel you'd like to answer.

25:13 Wendy Wall: Okay. So, our strata has an external property manager. We leave it to them to maintain the records, documents for purchasers, and indemnity agreements, minutes, etc, although we do keep some of them ourselves. Do we need to be confirming that the manager is giving out the correct information? That's a really tough situation for councils. You can't know exactly what your property manager is providing. They are very, very busy, and every single strata has different bylaws and different strata plans and different parking arrangements.

25:51 So in my old strata every single Form B was incorrect. So you can ask for copies of those, and just remind your managers of what the situation is in your strata. I really encourage just working with them, because like I said, the details on the Form B are going to be different for every single one of the stratas that they manage. But you can't possibly keep track of everything that they're storing.

26:19 So I do know a lot of stratas who try to store their own records as well. You know, sort of shadow storage, I guess I call it. There's nothing wrong with that, and it can help cut down on having to ask the manager for copies of things all the time, which is just a great way to cut down on unnecessary work for your manager and still give council access to what you need.

26:51 If we have an email chain between a council member and an owner that goes on and on, do we need to keep every email or only the most recent? If it's a simple Q&A, can it be deleted? No, correspondence has to be kept for two years. So even those things about, you know, what is my parking space number, that's correspondence, so you have to keep it. Now in terms of an email chain, just be careful.

27:16 If you have an email chain that shows every back and forth, then you have a record of the whole thing, and you could technically delete earlier versions of that chain. But be careful, because sometimes the way an email chain goes, with the back and forth, depending on which part someone replies to, it might not show every single part of the conversation. So one of the ways to get around that is, with the platforms that we're seeing at this conference, the communication is often part of that platform, it's stored.

27:48 Or if you have an email address that is for the council, so it stores the council correspondence for years, you don't have to make a PDF of every email. The email is there, just don't delete it, and you've got a record of it. If somebody requests a copy you can turn it into a PDF, but don't feel like you have to do that for every single email, that would be crazy.

28:16 What proportion of stratas do you think are in full compliance? There's no way to know that. All I would say is that it is fairly common to get questions, or to see CRT cases, where a strata has for example refused to give copies of documents. I would just encourage every manager and strata that when you get those requests for documents, if it's in section 35, just give a copy or give access.

28:42 It is mandatory. So that is one way to sort of know if a strata is in compliance with keeping the records. So somebody's asking, if you're only required to keep minutes of your meetings for six years and correspondence for two years, is it okay to destroy them after that, and what are the pros and cons of keeping or getting rid of them? This is going to depend perhaps on how you store them, and it's up to you.

29:12 This is something that you could address as a strata corporation in your bylaws. I don't see it very often, but if you're concerned about records being destroyed, that is one place to clarify it. But this is really a decision of your strata or your council. There is no requirement to keep these records longer than the period that's specified in the Act. Personally I don't think there's anything wrong with keeping some of these things longer.

29:41 If somebody requests a document though, under section 36, you're only actually required to give a copy of the document from the time frame, but there's different opinions on that as well. And in terms of the pros and cons, we have seen for example sometimes CRT cases where they're referencing documents from more than two years ago. So there is one reason why you might want to keep them longer, so that you have those copies of correspondence, so you have those copies of minutes for situations that happened a long time ago, but that information might be really important to the current case that's in front of you.

30:30 But again, there's no legislation that says you have to keep them longer. And somebody's asking about income tax returns being ambiguous, given a non-profit society. Well, we're not non-profit societies, we're strata corporations, there is a difference.

30:46 – Q&A: Strata Revenue, Taxes and Form B

30:48 Wendy Wall: We're non-taxable corporations unless our strata has a business activity, like a golf course, that's generating income. They're asking why they're required… Oh, such as a laundry machine income. Okay, so this is a little bit off topic, but if you are only collecting money that has to do with your residents — for example you have a common property laundry room where only your residents use it — that's not considered taxable revenue.

31:23 However, if you had a gym for example and you allowed the public to use it and you were charging them a fee, then that is revenue. If you have a cell phone tower on your roof and someone's paying you money to leave that on your roof, then the money that they pay you is taxable revenue. So if you want to conduct business activities that create revenue for your strata corporation, it's always a good idea to talk to a lawyer who has experience with strata tax, a tax lawyer, because you might not understand the serious implications of your strata having a revenue stream.

32:12 Will the retention guide be available on any other platform? Yeah, it's on our website already. So if you go to our website and you go under resource links, and then you scroll down to the very bottom, it's called records retention guide. If you can't find it, don't worry, just email us. You could email workshops@visoa.bc.ca and we'll just email it to you. You mentioned that there are online platforms for strata record storage, any information on which and where to store records?

32:46 Okay, so there were two in this conference. One is PowerStrata, the other one is StrataPress. And Ryan, StrataPress is today, right?

32:56 Ryan Grant: Yes.

32:56 Wendy Wall: Yeah, so if you stick around later, or you look at the schedule, you'll see StrataPress. And there are other companies out there, but certainly you can learn today about StrataPress for sure. Can you ask for a Form B and other certificates when not selling? Absolutely. And the people who are allowed to ask for records: owners, tenants, and anybody authorized in writing by those owners and tenants. And when I say tenants, the tenants who have authorization.

33:31 You can ask for a Form B anytime. There's a fee for it, the strata can charge up to $35 for that Form B, plus 25 cents for every single page. And remember that something like a depreciation report is required to be attached, and those can be in the hundreds of pages. But technically yes, you can ask for a Form B anytime, and it's actually a good thing.

33:53 Quite often your mortgage company, when you go to renew your mortgage, sometimes they'll ask for the Form B, because some of the information in the Form B are things like, what are your strata fees, do you owe money, how much money is in the contingency reserve fund. So those are the types of information that your lender might be interested in knowing from time to time. Are we obliged to keep records of documents from your property manager?

34:23 Again, that's your choice, you don't have to. But ultimately it's the strata corporation's legal responsibility to keep all the records under the Act. So have a conversation with your property manager and find out what they're keeping, and if there's something that you want to keep yourself, just… for example council correspondence, you've already got copies of that, just keep them. Can an owner collect certificate documents required for a sale and provide them directly to the buyer when they sell, and not have to request them from the strata manager?

35:04 Absolutely, but you'd have to keep those records and you're taking the legal responsibility. So when you sign the general contract of purchase and sale, there are boxes there where you are confirming that all of these certain list of documents have been provided. So just remember, you're taking on that liability. And read through the minutes, because if it says the next meeting is, you know, April 10th, and there are no minutes for that April 10th, you need to make sure there's no documents missing.

35:40 It's also up to the purchaser to do their due diligence, and at this conference we do have two companies who review documents, right Ryan? We've got CondoClear and we've got Eli Report.

35:50 Ryan Grant: Yes, and they're today as well.

35:53 Wendy Wall: Yes. So those purchasers could hire a company like that to do a review, find that there's gaps, that there's information missing. But that's the purchaser's role. How are we doing for time?

36:12 Ryan Grant: Yes, I was just going to say that has to be the last question, because we are getting into the next segment. So Wendy, thank you so much, and any other questions that were asked for you, we will make sure to touch base with you and get them answered too.

36:28 Wendy Wall: Okay, thank you so much for your time.

36:31 Ryan Grant: Yes, always a pleasure.

36:31 Wendy Wall: Bye.