How to Prepare a Strata Annual Budget in BC

A strata budget is not a wish list. It is the document that sets strata fees for the coming fiscal year, and the Strata Property Act is specific about what it must contain, how it is approved, and what happens if owners vote it down. Here is how to build one properly.

Start with the two funds

Every strata budget funds two separate pots. Under section 92, owners contribute by means of strata fees to:

• an operating fund for common expenses that usually occur once a year or more often than once a year, plus the expenses necessary to obtain a depreciation report under s.94 and an electrical planning report under s.94.1; and
• a contingency reserve fund (CRF) for common expenses that usually occur less often than once a year, or that do not usually occur.

Keeping the line items in the right fund matters, because the rules for spending from each are different. Our complete guide to the contingency reserve fund covers the spending side in detail.

What the budget must contain

Section 103 requires the strata corporation to prepare a budget for the coming fiscal year and says it must contain the information required by the regulations. That list is in Strata Property Regulation s.6.6:

• opening balances in the operating fund and the CRF;
• estimated income from all sources other than strata fees, itemized by source;
• estimated operating-fund expenditures, itemized by category;
• the total of all contributions to the operating fund and to the CRF;
• each strata lot's monthly contribution to each fund;
• estimated closing balances in both funds.

The proposed budget must be distributed with the notice of the annual general meeting under s.45 and must be accompanied by a financial statement.

Fund the CRF minimum, not the leftovers

Since November 1, 2023, every strata corporation and section must budget a minimum annual CRF contribution of at least 10% of the total budgeted contribution to the operating fund, determined after considering the most recent depreciation report (see the Province's budgeting page and the Strata Property Regulation). The old rule that no contribution was required once the CRF hit 25% of the operating budget is superseded — do not rely on it. For the fiscal year following the first annual general meeting, Regulation s.3.4 sets the same 10% floor.

Two statutory reports also need to appear in your numbers. Depreciation reports are required for strata corporations of 5 or more lots — no waiver — with deadlines of July 1, 2026 for Metro Vancouver, the Fraser Valley and the Capital Regional District and July 1, 2027 elsewhere in BC, renewing every 5 years (requirements). An electrical planning report is required for 5+ lot stratas by December 31, 2026 (Metro Vancouver / Fraser Valley / Capital RD) or December 31, 2028 elsewhere; stratas under 5 lots instead need an EV-charging approval process by December 31, 2026. If you have a report already, our guide on how to read a depreciation report shows how to translate its funding models into a CRF contribution.

How each lot's share is worked out

Each strata lot's contribution is calculated by unit entitlement — the Schedule of Unit Entitlement filed with the strata plan, not the bylaws and not simply floor area. There are narrow exceptions in Regulation s.6.4: an operating-fund contribution that relates to and benefits only limited common property is shared only by the lots entitled to use it, and a contribution that benefits only one type of strata lot is shared only by that type — but only if that type is identified as a type in your registered bylaws. Whether either applies to your strata depends on your bylaws and your strata plan, so check both. Even where they apply, CRF contributions and special levies are still calculated on total unit entitlement.

Council questions, answered

Does the budget need a 3/4 vote? No. The budget is approved by a majority vote at each annual general meeting, and the proposed budget may be amended by a majority vote at the AGM before the budget itself is put to a vote (s.103).

What happens if owners defeat the budget? Under s.104, the strata must prepare a new budget within 30 days — or a longer period approved by a 3/4 vote at that meeting — and put it to a special general meeting for approval by majority vote. Until the new budget passes, owners keep paying the same monthly strata fees as under the previous budget, and spending from the operating fund is limited to s.98 expenditures or the types of recurring expenses in the previous budget, up to the maximum set out there for each category.

Can we spend on something the budget doesn't cover? Section 97 allows operating-fund spending that is authorized in the budget, approved by a 3/4 vote at a general meeting, or permitted by s.98 or s.104(3). Section 98 permits unapproved operating-fund spending up to the amount set in your bylaws, or — if the bylaws are silent — the lesser of $2,000 and 5% of the total operating-fund contribution for the year. Either fund may be used where there are reasonable grounds to believe an immediate expenditure is necessary to ensure safety or prevent significant loss or damage; that spending must not exceed the minimum needed, and owners must be told as soon as feasible.

Notice, approval and follow-through

General-meeting notice must be at least 2 weeks, and notice sent by email, mail or fax is conclusively deemed received 4 days after it is sent — so an emailed AGM package should go out about 18 days ahead. Since November 24, 2022, all BC strata corporations may hold electronic or hybrid general meetings and accept electronic votes without passing a bylaw.

After approval, owners must be told their new fee within 2 weeks (s.106, Part 6). At year end, s.105 says an operating surplus must be transferred to the CRF, carried forward as a surplus, or used to reduce next year's operating contribution — unless owners decide otherwise by 3/4 vote — while a deficit must be eliminated during the next fiscal year. If fees go unpaid, see collecting strata fee arrears in BC; note that BC has no statutory late fee, only interest where a bylaw sets the rate, capped at 10% per annum compounded annually under the Regulation.

Self-managed councils using ManageStrata can keep the budget, financial statement and AGM notice package together so the numbers owners vote on are the numbers on file. If you are inheriting a messy set of records, running last year's budget, financials and depreciation report through SearchStrata for AI analysis of strata documents can help you spot recurring costs and commitments before you draft.

This article is general information about BC strata law, not legal advice; verify against the current Strata Property Act and Regulation or consult a BC strata lawyer.