Hiring Contractors as a Strata Council: What to Know

Hiring a contractor for a $50,000 envelope job, a $200,000 boiler replacement, or even a $3,000 fence repair isn't just a procurement task. It's a fiduciary act. Council members are spending other people's money and signing the corporation's name to contracts that bind every owner. Hiring contractors for a BC strata correctly means following a defensible process, verifying everything in writing, and structuring the deal so the strata isn't holding the bag if something goes wrong. We've watched too many councils inherit lawsuits, liens, and incomplete work because the original hiring decision skipped one of the steps below. Here's how to do it right.

Why hiring contractors is a fiduciary act

Council members owe the strata corporation a duty of honesty, good faith, and reasonable care. Strata Property Act s. 31 sets this duty out explicitly: act honestly and in good faith with a view to the best interests of the strata corporation, and exercise the care, diligence, and skill of a reasonably prudent person in comparable circumstances.

When you sign a contractor's quote on behalf of the strata, that signature commits the corporation. If the price is uncompetitive, the contractor is uninsured, the contract has no scope, or the work is awarded to a council member's brother-in-law without disclosure, council has breached its duty, and individual council members can be named in a Civil Resolution Tribunal claim.

Best practices we use with every Avesta-managed strata:

• Three written quotes for any job over $5,000
• Formal tender (with envelope consultant or engineer) for any job over $25,000
• Written scope document attached to every quote so quotes are apples-to-apples
• Conflict-of-interest disclosure under s. 32 documented in council minutes
• All contracts signed by two council members, not the strata manager alone

Verifying contractors before you sign

A reputable BC strata contractor will produce these documents within a business day. If they can't, walk away.

We've watched stratas hire well-intentioned contractors who didn't have current WorkSafeBC coverage, only to discover the issue when an injury claim landed at the strata's door. Verification takes 20 minutes and saves a six-figure liability claim.

The contract: what should be in it

A clean BC strata contractor agreement runs 6 to 15 pages. The non-negotiables:

1. Defined scope of work. Drawings, specifications, materials list, and exclusions.
2. Fixed price or clearly defined hourly basis. With a not-to-exceed cap on hourly work.
3. Payment schedule. Progress payments tied to defined milestones. Never pay 50% up front; 10–20% deposit is the maximum.
4. Holdback clause. 10% holdback retained until 55 days after substantial completion per the Builders Lien Act.
5. Change order process. Written change orders signed by two council members before extra work begins. Verbal authorizations don't bind the strata.
6. Schedule with start and substantial completion dates. Plus a delay clause specifying who bears cost of delay.
7. Insurance requirements. Repeating the $2M GL minimum and naming the strata as additional insured.
8. Warranty. Minimum 1 year on workmanship; manufacturer warranties on materials. Larger envelope projects 2 to 5 years.
9. Termination clause. Council's right to terminate for non-performance with defined notice.
10. Lien indemnity. Contractor warrants subcontractors and suppliers will be paid.

For envelope, roof, mechanical, and structural work, council should also require sealed engineer or architect drawings and an inspecting consultant separate from the contractor.

Builders liens: the rule that catches councils

The BC Builders Lien Act gives contractors, subcontractors, and material suppliers a statutory right to file a lien against title for unpaid work. For strata corporations, the relevant provisions:

• A 10% holdback must be retained from every payment until 55 days after substantial completion
• The holdback is paid into a separate trust account for larger projects (over $100,000 typically)
• A subcontractor or supplier can file a lien if the general contractor doesn't pay them, even if the strata has paid the general in full
• If the strata didn't hold back the 10%, it may have to pay subcontractors directly

The holdback is your insurance policy. The cost of getting this wrong is paying twice.

Change orders: where projects go sideways

Almost every renovation has change orders. Walls open up, subsurface conditions emerge, owners request adjustments. The risk isn't change orders themselves. It's unauthorized change orders.

The rule we use with every strata we manage: no change order over $1,000 is approved without two council member signatures, in writing, before the work happens. The contract should explicitly say verbal change orders don't bind the strata. We've seen $40,000 envelope jobs grow to $90,000 because the strata manager said "yes, go ahead" on a phone call and council was presented with the bill at month-end.

Common change-order disciplines:

• Set a contingency budget (10 to 15% of contract value) approved up front
• Track every change order in a written log shared with council
• Require contractor to provide cost justification with each change order
• Council reviews change orders at every council meeting during active projects

Payment structure: don't fund the contractor's working capital

The healthy payment schedule for a BC strata contract:

• Deposit. 10 to 20% on signing (smaller projects may have no deposit).
• Progress payments. Tied to defined milestones, verified by council site visit or consultant sign-off.
• Substantial completion payment. Brings cumulative paid to 90%.
• Holdback release. Remaining 10% at 55 days after substantial completion, conditional on no liens filed.

Red flags in a contractor's proposed payment schedule:

• More than 25% deposit
• Front-loaded progress payments (e.g., 50% at 30% complete)
• No defined milestones, just "monthly"
• No holdback clause

A contractor whose business model requires the strata to fund their working capital is a contractor in financial trouble. That's not who you want on your roof.

The fiduciary trap: hiring people you know

The most common conflict-of-interest issue we see: a council member's spouse, sibling, or business partner is a contractor in the relevant trade. The council member nominates them. The work gets awarded. An owner files a CRT claim alleging breach of fiduciary duty.

The CRT has ruled on cases of this kind, reinforcing that even when the related contractor's pricing is market-competitive, failure to formally disclose under s. 32 and abstain from voting can void the contract.

If a council member has any interest, direct or indirect, in a potential contract, the path is:

1. Disclose the interest in writing, recorded in minutes
2. Abstain from the discussion and the vote
3. Obtain comparison quotes from unrelated contractors
4. Have the remaining council members make the decision

Skipping any step is a breach.

How this connects to the rest of council's job

Hiring contractors isn't a standalone task. It's the execution arm of your capital plan, funded by your contingency reserve fund or special levies. For envelope-specific projects like deck and balcony repair, an envelope consultant should run the tendering. For insurance-claim work, your broker often dictates the contractor list.

If your council is heading into a major project and wants a second set of eyes on the tender package, contract, or payment schedule, reach out through the contact form or visit our Garibaldi Highlands office. We've seen what works and, more usefully, what doesn't.