Early in my search, I was underwriting a 2-bedroom condo in Kamloops — listed at $395,000, well-located, tenanted at $1,550/month, strata fee of $380/month. The gross numbers looked reasonable. Not great, but in the ballpark of what I expected for that price point.
Then I requested the strata documents.
Buried in the financials was a notice of a pending special levy: $14,000 per unit for emergency roof replacement. The contingency reserve fund was underfunded relative to the building's depreciation report, and the strata council had voted to special-levy the shortfall rather than increase monthly contributions and wait.
Fourteen thousand dollars, due within 90 days of the levy approval, from the owner at the time of the levy — meaning if I bought that property before the levy was formally passed, it would be mine. The deal, at $395k, with a $14k levy incoming, was now a $409k deal. The cash-flow math collapsed.
That experience accelerated my education on strata ownership in BC considerably. Here's what I understand now that I didn't before.
What Strata Actually Means in BC
A strata corporation is the legal entity that governs a strata development. When you buy a strata unit, you own your individual strata lot plus an undivided interest in the common property — the lobby, roof, exterior walls, parkade, elevators, shared mechanical systems. The strata corporation manages and maintains the common property on behalf of all owners.
Day-to-day governance is handled by a strata council — elected from among the owners, typically a president, vice-president, secretary, and treasurer. The council makes operational decisions; major decisions (like passing a special levy over a certain threshold) require a 3/4 vote of all owners at a general meeting.
Every month, you pay strata fees. In Kamloops, typical strata fees on a 2-bedroom condo run $350 to $600 per month depending on building age, amenities, and financial management. Older buildings with more deferred maintenance and less-funded contingency reserves tend to have higher fees — or have low fees and under-maintained systems, which is arguably worse.
The strata fee covers two buckets: the operating fund (day-to-day expenses — common area utilities, landscaping, insurance, management) and the contingency reserve fund (capital expenditures — roof replacement, boiler replacement, elevator modernization, parking lot resurfacing).
How to Read a Depreciation Report
BC law requires stratas with more than 4 strata lots to obtain a depreciation report at least every 5 years. The depreciation report is prepared by a qualified engineer or building inspector and projects the 30-year capital expenditure timeline for the building's major components.
A good depreciation report will tell you:
- The current condition and estimated remaining useful life of every major component (roof, windows, membrane, elevators, mechanical systems)
- The projected replacement cost for each component in future dollars (inflation-adjusted)
- The current balance in the contingency reserve fund
- Three funding scenarios: no additional contributions, a low contribution rate, and a high contribution rate — and what each scenario means for fund adequacy over 30 years
What you're looking for is the gap between the projected expenditure timeline and the current fund balance. If the roof needs replacing in 7 years at a projected cost of $450,000 and the contingency reserve currently holds $85,000, that's a $365,000 gap that will need to come from somewhere — increased monthly contributions, a special levy, or a strata loan.
The condo I was underwriting had a depreciation report showing $840,000 in capital expenditures projected over the next 15 years, against a contingency reserve balance of $127,000. The strata fees had not been increased materially in four years. The math on that building was brutal — and it was invisible until you read the depreciation report.
Special Levies: The Hidden Liability
A special levy is a one-time charge assessed against all strata lot owners to fund a capital expenditure that the contingency reserve cannot cover. They require a 3/4 vote to pass, but when a building needs its roof replaced and the fund is dry, the 3/4 vote is not difficult to obtain.
The liability question for investors is timing. In BC, the responsibility for a special levy attaches to whoever is the owner at the time the levy is passed by general meeting vote. If the vote has already happened and the levy is outstanding, it typically must be paid by the seller before completion — this is negotiated as part of the contract. But if a levy has been discussed and is pending a vote, you could complete your purchase and then face the levy as the new owner.
This is why reviewing strata minutes — not just the financials — is essential. The minutes of strata council meetings and general meetings will reveal what has been discussed, what votes are upcoming, and what the council knows about the building's condition that isn't yet reflected in a formal notice. Read the last three years of minutes, minimum. If the council has been talking about the roof for 18 months, a levy is not a surprise — it's a scheduled event.
Strata Bylaws and Rental Restrictions: The Investment Killer
Beyond the financial risks, strata bylaws can fundamentally alter whether a condo can function as a rental property at all.
Many BC stratas have rental restriction bylaws. The most common form limits the percentage of units in the building that can be rented to non-owner-occupants at any given time — typically 25% to 30%. If that cap is full when you buy, you cannot rent your unit until another owner moves back in and vacates a rental slot.
BC's Strata Property Act was amended a few years ago to restrict stratas from adding new rental restriction bylaws and to void certain blanket prohibitions on rentals — but existing grandfathered bylaws remain enforceable. You need to check the current bylaws specifically, not assume that provincial changes protect you.
Additionally, many stratas have pet bylaws, short-term rental prohibitions (relevant if you were considering Airbnb), noise restrictions, and renovation approval requirements that affect what you can do with the unit. A unit where you want to renovate the kitchen to increase rent may require strata council approval for any work touching common-property walls or plumbing.
For an investor, every bylaw restriction is a potential reduction in the property's income capacity or resale flexibility.
Why I Now Prefer Freehold Duplexes
After the condo experience and subsequent research, my target property type has shifted strongly toward freehold duplexes.
Freehold means you own the land and the building outright. There's no strata corporation, no strata council, no monthly strata fee, no depreciation report risk, no special levy, no bylaws about who can rent or what you can do with the property. When the roof needs replacing, you decide when and how, you hire the contractor, and you pay for it — but you're also the only person deciding how much to fund for that eventuality.
The absence of strata politics alone is significant. I have no interest in attending strata AGMs, navigating disagreements between council members about landscaping contractors, or being outvoted on decisions that affect my asset. Full control over a freehold duplex means the decisions about the property are mine — and so is the full downside if I make bad decisions.
The other major advantage is forced appreciation. On a freehold duplex, I can renovate the suites, add a carport, improve the landscaping, convert unused space — and capture the full value of those improvements in my asset. In a strata, any improvement to common property requires strata approval and the benefit is shared across all owners. Improvements to your individual unit help, but you're limited in scope.
Freehold duplexes in Kamloops in May 2026 are running $490k-$560k depending on neighborhood and condition. That's a higher price point than comparable condos, but the clean ownership structure and control justify the premium for my investment thesis.
When Strata Can Still Make Sense
I'm not saying strata is always wrong for investors. There are situations where it makes sense.
New or newer buildings with full contingency funding. A strata in a 2018-built building with a healthy contingency reserve, recent depreciation report showing adequate funding, and no pending capital expenditures is a fundamentally different risk profile from a 1985-built building with deferred maintenance. If you buy a well-managed newer strata, the risk of surprise levies is significantly lower.
Commercial strata. Commercial strata (retail bays, office units) operates under different dynamics than residential. If you're buying a commercial strata unit as an investment, the analysis is similar but the tenant base and revenue profile are different.
Location premium that doesn't exist in freehold alternatives. Some neighborhoods have no freehold residential options at an investor price point. If the only way to get into a specific high-demand location (close to a hospital, TRU campus, or downtown core) at a workable price is through a strata, the location may outweigh the structural complexity — if and only if the financials are clean.
The rule I now apply: before I spend an hour on any strata property, I request the depreciation report and the last two years of strata minutes as a precondition of further due diligence. If those documents aren't available or the numbers are alarming, I move on. There are enough freehold duplexes in Kamloops that I don't need to take on strata risk to find a workable deal.
That $395k condo never went back on my list. The $14,000 levy was the least of the building's problems.