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Strata Titling is used by investors to extract some extra value from their property portfolio.This involves converting a number of units on a single land title into separate titles. The majority of this is a paper exercise, although the units will have to comply with council regulations which may involve some modifications.
You can expect an increase in valuation of 5% to 10% as the bank will view each unit as being of higher value with them having independent titles.
It also gives the investor more flexibility going forward. For example, they can sell one property and keep one property. A useful mechanism to be aware of when you are doing your research on investment opportunities.
Strata Titling is a simple and easy way to add value to a property and create instant capital growth, independent from curerent market growth.
New Buildings
When a new building containing two or more units is constructed and has not been occupied, a strata plan can be deposited for registration in the Provincial Land Title Office, without requiring any City approval on the strata plan. New development in most single-family districts generally cannot be strata titled, and the City may require a covenant to be registered against the property title to restrict strata titling in these districts. Some other uses, such as Artist Studios, may also be restricted from strata titling in some zoning districts.
Existing Buildings (Strata Conversions)
Any proposal involving the conversion of a previously-occupied building to strata title ownership must receive City approval, in accordance with the Strata Property Act. The City’s process for conversion of previously-occupied buildings to strata or cooperative ownership is intended to assess the impact of conversion on the supply of rental accommodation in the area and to consider the impacts on residential tenants who are unwilling or unable to stay in their residence by purchasing a strata lot or cooperative unit. It also ensures that the building proposed for conversion is in a reasonable state of repair. Buildings are inspected by City staff for compliance with the Building, Electrical, Plumbing and Fire By-laws and in general must be upgraded to substantially comply with these by-laws. For attached dwellings, fire separation between units and life-safety systems such as sprinklers are mandatory.
City Council is the “approving authority” for conversion of previously occupied buildings into strata lots. Council has delegated its authority to the Subdivision Approving Officer for strata conversion applications of residential buildings with less than six units and for buildings which have not previously contained residential accommodation.
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