Can a BC Strata Borrow Money? Strata Loans Explained

The engineer's report lands two weeks before the AGM: the roof has three years left, the estimate is well into six figures, and the contingency reserve fund covers about a fifth of it. Somebody at the back asks the question that is really the whole meeting — "can't we just borrow the money?"

What's missing in that room usually isn't goodwill. It's a clear picture of the options, written down early enough for owners to compare them. This post settles the rule on strata borrowing in BC: who approves it, what the corporation can and cannot pledge as security, and how a loan compares with a special levy or a draw on the reserve fund.

Yes — with a 3/4 vote of the owners

A strata corporation in BC may borrow. Under section 111 of the Strata Property Act, the corporation may borrow money it requires to exercise its powers and perform its duties after approval by a resolution passed by a 3/4 vote at an annual or special general meeting. Council cannot take out a loan on its own authority.

A "3/4 vote" is a defined term. Under section 1, it means at least 3/4 of the votes cast by eligible voters present in person or by proxy at the time the vote is taken, excluding those who abstained. It is not 3/4 of all owners, and abstentions do not count against the resolution.

What the strata can pledge as security

Section 111 also lets the corporation secure repayment of the money and the interest on it — but only subject to section 81, which states flatly that the strata corporation must not mortgage common property. That is the hard limit: the building and the land shown on the strata plan are not available as collateral.

What section 111(2) does list, without limiting the general power, is security by one or more of:

• a mortgage of property other than common property;
• an assignment of unpaid strata fees or special levies;
• a negotiable instrument.

In practice, lenders in this market work mainly from that second item — the corporation's right to collect from owners — which is why the strength of a strata's collections record and its bylaws matter to the terms it is offered. The Act's enforcement route stands behind that: before suing, beginning arbitration, starting a Civil Resolution Tribunal claim, or registering a lien for money owed, section 112 requires at least 2 weeks' written notice demanding payment.

Questions councils actually ask

Can council sign a loan and tell owners afterward? No. Section 111 requires the 3/4 vote at a general meeting first, and the resolution should make clear what is being borrowed, for what, and how it will be repaid.

Can we borrow from our own contingency reserve fund instead? Only in a narrow way. Under Strata Property Regulation s.6.3, the CRF may lend to the operating fund only if the loan is repaid by the end of that fiscal year and only to cover temporary shortages where expenses fall due before budgeted contributions have been collected — and owners must be informed as soon as feasible of the amount and purpose. It is a cash-flow tool, not project financing.

Is a loan cheaper than a special levy? Not inherently — it is slower and carries interest. A loan spreads the cost over years, which can keep owners who cannot write one large cheque from being forced to sell; a levy is cheaper in total but lands at once. Many councils put both to owners with the numbers side by side.

Does an insurance claim change this? It can. Insurance money received under section 156 must be used to repair or replace the damaged property without delay under section 157, unless owners decide otherwise by 3/4 vote within the window in section 159. Borrowing is usually about the uninsured portion — deferred maintenance, upgrades, and the gap between the claim and the real cost.

Comparing the three funding routes

• Contingency reserve fund. A majority vote covers CRF spending in five specific cases under s.96 — including repair, maintenance or replacement recommended in the most current depreciation report. Any other CRF expenditure needs a 3/4 vote. See the Province's guide to the contingency reserve fund, and our CRF guide.
• Special levy. A 3/4 vote where each lot's share is calculated by unit entitlement under ss.99, 100 or 195; if the levy is divided in another way that establishes a fair division of expenses for that particular levy, a unanimous vote is required. The resolution must set out the purpose, the total amount, each lot's share and the due dates — see the Province on special levies.
• Loan. A 3/4 vote under s.111, plus a decision about how repayment is funded — often through the annual budget, which is approved by majority vote, or through a levy collected in instalments. How your strata structures that depends on its own registered bylaws and the lender's terms, so get both reviewed.

Whichever route wins, the repair itself may need its own approval: owner alterations need written approval from the corporation, while a significant change in the use or appearance of common property needs a 3/4 vote under s.71.

What a healthy strata does about it

Borrowing is what happens when a building's upkeep outruns its savings. The work that prevents it is unglamorous and starts years earlier: a current depreciation report, a reserve fund that is actually contributed to, and a budget owners can read. Depreciation reports are now required for strata corporations of five or more lots, due by July 1, 2026 in Metro Vancouver, the Fraser Valley and the Capital Regional District and July 1, 2027 elsewhere, renewing every five years. Since November 1, 2023, every corporation and section must budget at least 10% of its operating-fund contributions to the CRF, determined after considering the most recent depreciation report — see budgeting and strata fees, plus our walk-throughs of strata fees and the annual budget.

A healthy strata also keeps the paper trail where owners can find it: the engineer's report, the quotes, the loan term sheet, the resolution as voted. Tools like SearchStrata can help owners and councils make sense of a thick document package with AI analysis, and ManageStrata exists on the same principle — the minutes, votes and books belong to the corporation and stay with it when a council or manager changes, with a full export available at any time. A ten-year loan outlasts most councils; the record of why it was taken on should outlast them too.

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.