Saturday, April 23, 2005
The Strata Property Act and the Rental of Strata Units in British Columbia
Readers who own and rent strata property in British Columbia, whether they reside in the Province or not, will find this post very useful. As the owner of a strata unit myself as well as a four-year Council Member of the Strata Corporation where I own my apartment and this year's President of Strata Council, I have come to have first-hand knowledge of strata matters, both from the viewpoint of the strata corporation as well as a property owner. As a real estate practitioner, furthermore, I am frequently asked if and how the Strata Property Act affects by-laws dealing with rental restrictions in an apartment complex.
- The Strata Property Act, which came into effect on July 1, 2000 and replaced the former Condominium Act, contains several new provisions that affect rental restrictions. Section 141 of the Strata Property Act permits any residential strata corporation to pass a by-law that limits or even prohibits rentals. In the eventuality that a strata corporation creates a rental restriction that limits rentals, the Strata Property Act requires the by-law to set out the procedure for administering the limit.
- In the past, strata corporations regulated rentals by creating by-laws that required the strata corporation - through its Council - to approve any tenant or to require an owner/landlord to include particular wording in the tenancy agreement. Section 141 prohibits a strata corporation from screening tenants, approving tenants or requiring any particular term in a tenancy agreement.
- In addition, many strata corporations have sought in the past to impose fines for violating rental restrictions. Section 7.1 of the Strata Property Regulations now sets CAD $500 as the maximum penalty for breach of a rental restriction by-law. Moreover, Section 7.1 permits the strata corporation to impose a fine for a continuing violation every seven days.
- If an owner rents the suite contrary to a rental restriction by-law, Section 145 permits the tenant to end the tenancy without penalty within ninety (90) days of learning about the by-law violation. If the tenant ends the tenancy agreement under this provision, the owner/landlord must pay the tenant's reasonable moving expenses to a maximum of one month's rent.
- Section 144 permits an owner who wishes to rent to apply to the strata corporation for an exemption from the rental restriction on the ground of hardship. Section 144, furthermore, spells out the procedure to apply for such exemption. The application must be in writing and must set out the reason why the exemption is needed. If the owner wishes a hearing, the Strata Council must give the owner the hearing within three weeks from the date of receipt the application. Once the hearing is held, the strata corporation must render a decision within a week. Failure to give a decision within the allotted time results in the exemption being automatically granted. If a hearing is not requested, the strata corporation must give its decision within two weeks. Unfortunately the Strata Property Act, just like the former legislation, fails to define the term 'hardship' .
- Under Section 142(3) an owner is exempt from a rental restriction whenever the owner rents to a family member. Section 8.1 of the Strata Property Regulations defines a family member as the owner's spouse, parent(s) or child. A spouse, furthermore, includes a common-law spouse with whom the owner has lived continuously in a marriage-like relationship for at least two years, and it covers same sex relationships.
- When a strata corporation amends its by-laws to restrict rentals, the Strata Property Act protects owners against the immediate effect of the by-law. To varying degrees, the legislation permits owners to rent their strata lots for a while. Every situation is different and every owner must consult the Strata Property Act to calculate the extent to which his/her unit is grandfather. When in doubt, a consultation with a real estate law practitioner is more than warranted. However, in general lines, every owner is allowed at a minimum to rent the unit for one year after the by-law comes into effect. The best case scenario applies to the owner who is the first purchaser of the strata unit from the developer and the strata lot is designated for indefinite rental in a rental disclosure statement. In this case the owner can continue to rent for as long as he/she owns the unit, the rental restriction by-law notwithstanding.
- Section 146 mandates that within forteen (14) days of renting, an owner must give the strata corporation a Notice of Tenant's Responsibilities signed by the tenant. Such notice is found in the Form K of the Strata Property Regulations. Failure by the owner to provide the strata corporation with a Notice of Tenant's Responsibilities signed by the tenant, or to provide the tenant with copies of the current by-laws and rules allows the tenant to terminate the tenancy within ninety (90) days without penalty. Furthermore, if the tenant ends the tenancy agreement under this provision, the owner/landlord is liable for the tenant's reasonable moving expenses to a maximum of one month's rent.
For any further questions concerning the subject matter of this post feel free to send me a private e-mail or to post your comments here. Please note that all answers will be of general nature and must not be construed or interpreted as legal advice. If you require legal advice, please consult your lawyer.
Luigi Frascati
Real Estate Chronicle
