Estimated reading time: 3 minutes
Key Takeaways
- The Insurance Under Destruction (IUD) value determines payouts when a strata lot is destroyed and is instrumental in rebuilding decisions.
- Unit Entitlement may influence monthly fees and voting power; it relates to the IUD and was calculated using the same values.
- Upgrades made by owners are not covered by strata insurance, so additional personal insurance is necessary for replacement costs.
- Stratas with a rental pool need pre-determined IUD calculations to manage revenue sharing accurately.
- Working with an experienced buyer’s agent can help navigate strata complexities and find the right property in Whistler.
Overview
Within the Strata Plan, there is typically a chart that has the Insurance Under Destruction (IUD) and a corresponding Unit Entitlement value. This IUD value was determined when the building was in the planning stages. The following information was taken from the Condominium Home Owners Association of British Columbia (CHOABC):
“The Schedule of Insurance upon Destruction was a formula introduced into the legislation under the Condominium Act that set a value to each strata lot within a strata corporation. The formula would be used in the event the property was destroyed and had to be rebuilt.“
“If the building was destroyed and was not going to be rebuilt then it is referred to as Interest Upon Destruction. For example, if your building were to experience a devastating fire and the structure was demolished, the insurance would pay the settlement amount under your policy to each of the owners based on the Schedule of Interest Upon Destruction, which was already pre-determined in the registered strata plan.” The strata would be wound-up in the process.
Destroyed by Fire
In Whistler, we have seen some strata lots destroyed in a fire. The strata lots destroyed were rebuilt to the same configuration as the original strata plan. Any variances would go through a process within the strata corporation and the Resort Municipality of Whistler.
Insurance to Cover Upgrades
If the fire destroyed a condo/townhome where the owner upgraded the property, the strata’s insurance does not cover each owner’s personal upgrades. When an owner renovated to a standard above the original development, they now rely on the additional insurance they purchased privately to cover the replacement cost of upgrades.
IUD or Unit Entitlement
Unit entitlement is another measurement of setting a value. Unit Entitlement usually determines your monthly strata fees and voting power. The unit entitlement may refer back to the IUD chart, or it can be a separate chart. However, the calculations should be based on the same values.
IUD and Rental Pool
Stratas with a rental pool require the IUD or Unit Entitlement pre-determined calculations. This calculation is used to determine the revenue share of each dollar generated within the rental pool.
Next Steps
Stratas, rental pools, insurance, and Phase 2 topics are tricky to topics to grasp. An experienced buyer’s agent can help you increase your knowledge of each Whistler strata and hone in on the best purchase for you and your family. If you think I would be a good fit to work with your family and you are not already working with a Whistler real estate agent, please contact me.
Marion Anderson Real Estate Agent
Sutton Group – West Coast Realty, Whistler, B.C.
marion@marionanderson.com (604) 938-3885