When disaster strikes a building, just who keeps paying the bills?

Tony Gioventu
The Province

Dear Tony:

Our building was recently damaged in a fire that has required everyone to move out while the fire, water and smoke damage is repaired. We have been informed that it could be up to a year before we are allowed to return.

In the duration, all of the owners have to find other accommodation and this is doubling our costs.

Several owners have approached council and requested that strata fees be suspended until we are permitted to move back into our building.

Can we do this? It would be a substantial savings for the owners if this were possible.

Helen J.

Dear Helen:

The strata corporation continues to operate and is exposed to all of its financial obligations and liabilities even though a fire has essentially shut down occupancy of your building.

The strata council does not have the authority to suspend strata fees and must continue to enforce the bylaws.

Your strata will continue to have service agreements and utilities such as elevators, waste management, electrical and gas, water and sewer and HVAC contracts. General operations costs such as insurance, legal services, management and administration will not only continue to function but may actually have some increases due to the scope of construction.

Unless the strata corporation convenes a special general meeting and approves other financial options, likely by 3/4 vote, the approved budgets and schedule of strata fees will still be due and payable monthly as set out in your bylaws.

I would recommend legal advice to ensure your resolutions comply with the Act.

Once you reach your current fiscal year end, any surplus that remains —if there are reductions in operating costs—can be carried over to your next year as revenue and offset strata fees for the next fiscal period.  That may provide some financial relief to your owners.

It is also critical for your strata council to continue to meet monthly or more frequently if necessary during the construction and restoration to maintain direct contact with your insurance broker and insurance provider on behalf of the owners.

This will enable your council to provide updated information to owners about scheduling, matters that affect owners and when they can return to their homes.

A meeting between the council and your insurance broker is extremely valuable and will give your council the ability to find out if there are any exemptions or exclusions in the policy that may require additional funding or decision making.

The strata corporation is not responsible for the living-out costs of owners. While some strata corporation policies may cover living-out expenses for owners for a limited period of time, each owner is responsible to insure for their personal liability, living-out allowances, personal property and betterments to their strata lots.

It is beneficial during claims and construction that all communication be documented. Don’t rely on verbal conversations as they often result in misunderstandings.

© 2017 Postmedia Network Inc.

Lifting bylaws won?t ease the housing shortage

Tony Gioventu
Times Colonist

Dear Tony:

Is it true that the government is going to cancel the ability of strata corporations to enforce any type of rental limitation or restriction bylaws? Our strata is a 50-unit apartment building in Victoria and we permit five rentals. We also have two family rentals to retired owners and one hardship rental.

Our council has few complaints against any of our tenants — we treat them the same as owners, enjoy their residency and do not have any vacant units in our building. This has not always been the case, however.

Four years ago, we had a tenant who was disruptive, abusive to other residents and the council, and eventually had to be forced out by the strata.

The owner ignored our requests for assistance until we spent almost $5,000 on legal fees and threatened court action. When this was done, our council members were exhausted, the residents were fragile and the strata had exhausted far too much of our hard-earned money.

Janine M.

Dear Janine:

The information that you have seen relates to Victoria city council, which is asking the province to change the Strata Property Act to remove the ability for strata corporations to enforce and apply rental bylaws.

The act is provincial legislation and local governments cannot override it. At this time, there is no indication that the provincial government will remove rental bylaws from the legislation; however, as with any legislation, if there is enough lobbying and pressure, it is a possibility.

Across the province, there are 30,000-plus strata corporations with all types of bylaws and communities that permit, limit or restrict rentals.

There is no evidence that one type of strata operation is better than the other.

However, there is sound evidence in favour of well-run strata corporations with good communication between the council and residents, a healthy level of funding to ensure prudent maintenance and repairs, and the financial ability and authority to address problems before they become a crisis.

I am bewildered as to why anyone would believe removing rental bylaws is a solution to the rental-housing crisis in B.C. In 2010, the province amended the act to enable developers to adopt a rental exemption that applied to all identified units in a new strata corporation.

It was expected this would make a larger number of strata units available for rentals. What no one expected was the economic-speculation surge that affected real estate.

In 2016, CHOA undertook a detailed assessment of 16 target buildings of 50 units or more in Vancouver to identify if rental bylaws did indeed have an impact on rental availability.

Eight of the buildings were constructed since 2010 with rental exemptions, and eight buildings were pre-2010, six with rental restrictions. The outcome was surprising for everyone.

Buildings without rental restrictions had the highest vacancy rates, between 19 and 35 per cent, and the highest turnover of sales, indicating they were predominantly owned by investors or speculators.

Buildings with rental restrictions were generally owner-occupied, the permitted rentals were full and the vacancy rate was below 2.5 per cent in every case.

One possible conclusion is that this effect is the result of the limit on speculation combined with the age of the rental-restricted buildings. They are generally more affordable, established communities that are well occupied.

I would hope that the legislators seriously consider the impact on housing affordability and exposure to speculation before they consider removing rental bylaws.

For investors, there are many great unrestricted buildings available to enable speculation and use as rental properties.

If you want to voice your opinion to your local MLA, go to leg.bc.ca/learn-about-us/members and send an email.

© Copyright Times Colonist

Filed bylaws must be voted on

Tony Gioventu
The Province

Dear Tony:

Thank you for your column that acknowledged that a strata corporation is not permitted to alter bylaws that have been approved by the owners for the purpose of filing in the Land Title Registry. 

We are a new strata council and were given a set of “convenience” consolidated bylaws by our strata manager. We appreciate having the bylaws in one set, but when cross referenced with our recently approved bylaws, we noticed they are not the same as what was filed in Land Titles.

The management company filed a consolidated set of our 44 bylaws even though we only approved five bylaws at our meeting. In the consolidated set that was filed, we also noticed the wording of several bylaws that we had not voted on did not match what was originally approved and filed. 

Should we call a meeting of the owners and vote on a complete new set of bylaws or should we just file a correction repealing the consolidated set? 

Spruce Gardens Council

Dear council members:

When council members sign a Form I Amendment to Bylaws for filing in the Land Title Registry, they are performing a statutory action. 

The Form I requires council members to certify that the bylaws attached were approved by a resolution passed at a specific annual or special general meeting.  Your owners did not vote on a consolidated set of bylaws that included renumbering sections, or changing the wording of your collective bylaws. Your owners only voted on adopting five bylaws. 

In a spring decision posted on the Civil Resolution Tribunal website, Fournier vs Strata Plan 768, the adjudicator found that consolidated bylaws were improperly registered by a strata corporation, and the strata was ordered to refile the original bylaws as filed in the Land Title Registry, including the newly adopted bylaw. 

Elaine McCormack, a strata lawyer in New Westminster, suggests strata councils address the problem before it becomes a crisis. “If your strata corporation wishes to adopt the consolidated set, properly convene a special general meeting, and pass a three-quarters vote resolution to approve the set, or have a legal review conducted of the bylaws and propose a different set of bylaws for the approval of the owners.

“Don’t forget that the wording of resolutions amending, repealing or replacing rental, pet and age restrictions bylaw may significantly affect their enforcement. A variety of exemptions may apply to current residents and pets if the bylaws are changed without using specific wording.”

The basic message: your strata corporation cannot file bylaws that were not voted on at the meeting, and cannot makes changes to bylaws approved by the owners before they are filed.   Either way, your strata corporation will end up with unenforceable bylaws which may interfere with the sale of a strata lot, or result in court or tribunal actions and will most definitely result in disputes and misunderstandings in your strata corporation. 

© 2017 Postmedia Network Inc.

Tony Gioventu
The Province

Dear Tony:

Our strata corporation has a bylaw that requires owners to maintain copies of minutes, bylaws and rules, and makes each owner responsible for providing them to the next buyer. 

I sit on our strata council. We have a buyer who was given the bylaws that we provided to each strata lot, but it was an older version from a year ago and did not include a new pet bylaw limiting each strata lot to one dog.

They have two dogs and council are is struggling with the valid complaints from owners, but our strata seems to have caused the problem by requiring owners to provide documents which may or may not be accurate.  How can we resolve this problem?

Gordon Dempsey

Dear Gordon:

The official record keeper and record provider is the strata corporation. It is the obligation of the strata corporation to maintain records.

On request of either a Form B Information Certificate or a request for documents such as copies of the bylaws and rules, copies of financial information, minutes of council and general meetings, engineering and environmental reports, or other records the strata is required to maintain, copies of the records must be provided within the identified time period.

The strata corporation is permitted to charge 25 cents per page per document and may withhold the documents until the amount is paid.  

 Your bylaw is a good example of an unenforceable bylaw, as it does not comply with the Strata Property Act. The strata corporation is not permitted to download the responsibility of record keeping and disclosure of strata records to owners. In hopes of reducing continual production of paper and records, strata corporations will often create consolidated versions of bylaws, or summaries of rules and owner/tenant operating manuals, but these can only be used for the day-to-day operations to provide occupants with relevant lifestyle information. Even then, many operations manuals are not current, resulting in confusion.

When the strata amended its bylaws a year ago, it chose not to have a legal review done. Reviewing bylaws for compliance with the Strata Property Act, Human Rights Code and any other enactment of law is a primary task for lawyers conducting bylaw reviews and could have avoided the confusion now facing the strata council.

Bylaws are filed in the Land Title Registry and open to public access; however, because of your bylaw that requires owners to provide information to buyers, the sequence of events that took place and inaccurate information, your strata corporation may not be in a position to enforce the new bylaw. 

In viewing the documents provided by the seller, the buyer may have a reasonable argument that they could rely upon the information provided as it was required by the bylaws.

I would always insist that a buyer obtain copies of bylaws, strata plans and schedules of voting and unit entitlement directly from the registry. There are many versions of documents that circulate in strata corporations and nothing is truly reliable unless you are viewing official documents.       

© 2017 Postmedia Network Inc.

New owner discovers change to bylaws

Tony Gioventu
The Province

Dear Tony:

Our strata of 48 townhouses passed new bylaws in April this year. One of our council members had agreed to file the bylaws that were issued with the notice, and properly passed by a three-quarter vote resolution with no amendments.

However, a new buyer has just moved in and produced a set of bylaws that have a number of changes from what we had passed. When challenged, the council member had indicated she chose to consult with a notary on the bylaws before they were filed and made a number of amendments and what she thought were corrections, then filed the bylaws with her changes.

For example, we adopted a bylaw that limited the number of pets to one cat or one dog. The bylaws now say one cat and one dog or additional pets as approved by council. We contacted the Land Title Registry, which has indicated it cannot undo what someone has filed on behalf of a strata corporation and advised we obtain legal advice on the procedures. We now have eight owners away for the summer and are at a stalemate for next steps.

Conroy P., Summerland

 

The Land Title Registry office is correct. It cannot file a correction. It is simply a filing office, not a regulator. When a person files a bylaw amendment in the Land Title Registry, they are also filing a Form I Certificate of the Strata Corporation.

The form indicates they have filed the bylaws approved at a general meeting. However, in your case, any such declaration is incorrect. The person who filed the bylaws has misrepresented the information and placed themselves at risk for having potentially falsified the document and the bylaws. Whatever bylaws a strata corporation approves at a general meeting, the strata corporation has an obligation to file. No corrections, no amendments, no changes.

The best and easiest solution is for the strata corporation to convene a new general meeting, vote on the original bylaws and, once ratified, instruct their lawyer’s office to file the bylaws as passed and repeal the incorrect bylaws that were filed.

If you cannot reach a three-quarter vote to repeal the incorrect bylaws, an owner or tenant may make an application to the civil resolution tribunal, commence an arbitration or file an application with the Supreme Court of B.C. to order the bylaws as unenforceable as they were not the bylaws approved by the owners at a general meeting.

This also places your strata corporation in an extremely awkward situation in relationship to your current bylaws and any measure of enforcement. The new buyer relies upon the bylaws filed in the Land Title Registry when they make their purchase, even though your bylaws are significantly different.

Your strata corporation might also wish to consider a complaint against the notary if they recommended any changes as the writing of bylaws and constitutions for a strata is a practise of law in B.C.

© Copyright Times Colonist

Strata corporations deal with two types of debts

Tony Gioventu
The Province

Dear Tony: I have recently become the treasurer of our strata council. In reviewing the correspondence to collections, a number of owners have complained about the strata management company back charging them for administrative or service costs. 

We have nothing in our contract with the management company that permits it to charge owners service costs. In most cases, this is simply a $50 service that has been added to simple maintenance or repair bills when owners have required repairs to their strata lots, or a service technician was sent out by the property manager to complete fire safety inspections.

We now have one owner who refuses to pay the $50 service charge, and the management company has added it to their account, placing them into arrears and requested we authorize a lien be filed under the bylaws.

We’re not sure how to collect this amount or if it is even fair or legal.  

James M.

Dear James: It is helpful to understand that your strata management company is under contract as your agent. Under an agency agreement, it is essentially acting as you the strata corporation with the authority and limitations imposed by the Strata Property Act, the strata management contract or the instructions of strata council.

The management company has no authority to bill owners directly for its services as its contract is with you the strata, not each individual owner. Likewise, it has no authority to impose any penalties or surcharges on recoverable costs. Only the strata corporation may attempt to recover costs such as strata fees, special levies, interest authorized in bylaws or three-quarters vote resolutions, damages, fines, penalties, insurance deductibles or costs relating to work orders. 

With these limitations in mind, even strata corporations are not permitted to charge or impose service or administration costs. Most strata management companies are doing this correctly. 

Your bylaw that determines that any debts owed will be applied to an owners account and paid first from strata fees is also a problem. Court decisions have made it clear that bylaws that attempt to prioritize debts that are not lien-able or charge administration costs are not enforceable. 

It is important for owners to remember there are two different types of debts owed to a strata corporation: Secured debts (fees) that a strata can file a lien against the strata lot for, such as strata fees, special levies, interest and work orders, and unsecured debts, which are essentially claims that someone has violated a bylaw, caused an insurance claim or damages to the common property.

The two different types of debts must be accounted for separately if the strata corporation is going to be successful in collecting unpaid secure debts, and any debts that relate to bylaw enforcement, damages or insurance deductibles will require a claim be filed with the Civil Resolution Tribunal or the courts to obtain a decision or judgement for the amount owing. 

Even with a court or tribunal decision, those types of unsecured debts will rank low in priority after family maintenance enforcement payments, taxes, strata fees and levies, mortgages and other debts registered on the title.

An important item that appears to be a misunderstanding: Even if you do receive a decision or judgment for unpaid bylaw fines, administrative fees, damages or insurance deductibles, your strata corporation cannot file a lien against the strata lot for those amounts.       

© 2017 Postmedia Network Inc.

Tony Gioventu
The Province

Dear Tony: I am on our strata council and deeply concerned over a policy change the property manager has imposed on us. They have provided us with a policy that prescribes how bylaw complaints are filed: they must be in writing or they will not be addressed by council.

Several council members see this as a barrier to owners coming forward when there are issues that may be obvious to everyone, but an owner or tenant has been exposed to the ongoing problem and needs to bring it to council’s attention.

The concern we have is over this complaint form. The management company and the form say the B.C. Strata Property Act require that a complaint must be in writing. We cannot find this information anywhere and are concerned we could be facing some broader complaints about council setting up barriers and not doing its job.

Any words of wisdom would be helpful.

Barbara M., Vancouver

Dear Barbara:  There is absolutely nothing in the Strata Property Act, Regulations or Standard Bylaws that requires a complaint be in writing before the council addresses it. In contrast, section 34.1 permits an owner or tenant to demand a hearing with council, provided the individual specifies the reason for the hearing in writing.

The section does not limit, restrict or compel owners to disclose broader information. It could simply be a request for a hearing to “provide a complaint and accounting about an owner who is in violation of the bylaws over a specific issue”.

At the hearing, it would be up to the person who requested the hearing to provide the details, and council would be entitled to pose questions to determine if it has sufficient information to be able to respond to that owner in writing within seven days. Council cannot demand an owner provide all the details of the hearing request, simply the reason. 

The same, in many ways, applies to a bylaw complaint. When someone complains to any council member or the strata manager, it would be important for the person receiving the complaint to record as much information as possible: the date and time, reason for the complaint, and any particulars or evidence that may be helpful. That information may then form part of the written complaint the strata council must provide to the subject of the complaint, giving that person an opportunity to respond to the complaint in writing or request a hearing.

Remember, these are only allegations. The subject of the complaint may at any time challenge the claim of the strata corporation through the courts or the tribunal, including the veracity of the evidence against them. 

If you limit a complaint process in the same manner strata councils have tried to limit hearing periods, the outcome is unlikely in your favour. Most important, the decision on procedures is solely that of the strata council, which has the elected authority of the owners, not the strata manager.

© 2017 Postmedia Network Inc.

Poor record keeping can cause issues

Tony Gioventu
The Province

Dear Tony: We purchased a great two-bedroom condo in False Creek in 2016. At the time of the purchase, we requested all the documents for the past five years, engineering reports and a Form B Info Certificate. 

After we completed our review, our lawyer reviewed the document, along with the property disclosure statement of the seller, and nothing popped up as a potential risk or cost. A year later, and we are still very happy with our purchase.

We have noticed a dispute in our strata that is raising concerns for several owners who have altered balconies. The strata council is insisting the owners have to maintain and repair their balcony areas and enclosures, and if they do not, the strata will have the work done and bill them for the cost. There seems to be a fair amount of pressure on these owners to pay for something they inherited and for an argument that may be rather thin. 

Jacob M.

Dear Jacob: Alteration agreements are a very complicated procedure to properly enforce.

The Strata Property Act Standard Bylaws and the Form B Information Certificate both refer to alteration agreements as either a condition of approval for altering common property or to disclosure an alteration agreement that may have been established for a specific unit.

The challenges many strata corporations face are often associated with incomplete record keeping, inconsistent enforce and application of the bylaws, and alteration agreements that are not binding on the parties. In my experience, most alteration agreements and the procedures of the associated strata corporations do not meet a reasonable test that would make them enforceable. 

Here is a common example:

Jenny owns strata lot 25 and in 2001 requested permission to have a balcony enclosure installed. The council granted permission on the condition she would be responsible for the maintenance and repair of the alteration.  

Jenny sold her unit to Mark in 2005. At the time, he requested a Form B Info Certificate and there was nothing disclosed about the alteration. In 2015, Mark sold his unit to Hardip and once again, the strata disclosed nothing about an alteration agreement or any knowledge of the alterations.

This is a common sequence of errors in strata corporations. Records are often lost or destroyed as they transition through newly elected councils or changes with property managers. No one has a copy of the original agreement, it was never disclosed to subsequent purchasers, and if you look closely at the number of balcony enclosures on the building, there are several completed where the requirement of an agreement was never a condition. 

An additional ongoing problem about these agreements is that strata corporations attempt to download the duty of maintenance and repair of common property to owners, which is not permitted by the act. The strata is only permitted to make an owner responsible for the cost associated with the maintenance and repair of the alteration, which will require a specific detail of those future costs. 

The lack of fair application of the bylaw also questions whether the agreements are enforceable, and whether they would even apply to existing owners who have entered into current agreements.   If your strata is in the habit of applying or enforcing alteration agreements, I would strongly recommend you obtain a legal opinion on your bylaws and how the agreements have been enforced or applied.

These types of bylaws and agreements are perfect scenarios for Civil Resolution Tribunal claims as they incorporate the act, the bylaws of the strata and the procedures applied by strata corporations. 

© 2017 Postmedia Network Inc.

Discretionary bylaws a headache

Tony Gioventu
The Province

Dear Tony: We have a quirky bylaw that leaves the decision-making on the permission of pets up to the council. The bylaw says: “Subject to the approval of the strata council, an owner is entitled to one cat, one dog or cage of birds.”

This has always seemed a bit strange to the owners because as councils have changed, the types of pets they have allowed have also changed. This year, we have a strata council that likes dogs and we have gone from two dogs to eight dogs. 

There are no complaints, but several of us who have wanted dogs in the past were denied, and we are feeling a bit cheated by the unfairness. Are these types of bylaws enforceable?  We have a harmonious community and no one is wanting to upset the balance, but there must be a way of making the bylaws fair.

William N., Kelowna

Dear William: Discretionary bylaws are problematic for strata councils because they don’t include any criteria on how a bylaw is enforced. 

The essence of your letter directs us to the concept of fairness. Fairness is a condition that applies to everyone equally, regardless of circumstance. The difficulty strata councils have to face is defending decisions where they decline one person’s request but permit another because the council either favours or dislikes one of the parties.

Enforcement of bylaws is not random. It is procedural and methodical under the Strata Property Act. It is the sole responsibility of a strata council to determine whether it believes a violation of a bylaw has been committed and whether there are any penalties that are published in the bylaws. As strata corporations, we have a duty to comply with the Human Rights Code of B.C., and that may compel us to accommodate occupants with special conditions. Even those types of accommodations have some definition or interpretation under the code.

A purely discretionary bylaw is extremely complicated for a strata council to apply. I often apply a series of questions to analyze a situation to determine if there is a weakness with a method. An owner has requested permission to have a dog. What is the test that the strata council may apply?  Will the council be required to disclose the test to the applicant to determine whether that individual qualifies for a dog or not? Will that test be recorded in the minutes so other occupants are aware of the conditions?  Will that test be applied to all other occupants in the same manner? Are there any conditions within the test that enable a strata council to deny the request of an owner? Does the discretion of the bylaw imply the council can determine the size, age or breed of the dog?  

When challenged in the Civil Resolution Tribunal or the courts, how will the council defend its actions if it cannot provide a reasonable test for the application of the bylaw?  

I recommend strata corporations try to avoid discretionary situations and establish clear, enforceable bylaws and apply the same level of enforcement to everyone owner, tenant and occupant.

© 2017 Postmedia Network Inc.

Establishing effective and enforceable restrictions requires legal expertise

Tony Gioventu
The Province

Published: May 25, 201

Dear Tony: We are at war with our strata council. Ever since we became owners in 2015, it has continued to harass us over a parking debacle. 

We obtained a Form B Info Certificate and were advised we had been allocated two parking spaces. Immediately upon moving, we were told the second space did not exist. Since then, we have been parking our second car in a visitor spot with what we assumed was the consent of council as there was no complaint. 

Two weeks ago, we received notice of a violation of the strata bylaws and fines going back to April 1 for unauthorized parking. They are fining us $50 every day for a continuing contravention under their bylaws. That makes our parking for the second car more than our mortgage and strata fees.

We asked for a hearing with council and its response was: “We removed hearings from our bylaws, move the car, or just keep paying.”

Is this legal? 

Marjorie W.

Dear Marjorie: You have a number of issues that you need to address.

Because the strata has refused your request for a hearing, my first recommendation is to start a claim with the Civil Resolution Tribunal and challenge the problems with the Form B, the fines and the non-compliance with the Strata Property Act and Regulations. 

I have seen a number of recent bylaw amendments surface that do not comply with the act and are likely unenforceable. 

It takes a great deal of legal and procedural knowledge to effectively write bylaws. Many strata corporations have either borrowed other strata bylaws or written their own.  I am yet to come across any owner or council member who has competently written bylaws for their strata.

The maximum frequency that is permitted under the Strata Property Act Regulations for an ongoing contravention of bylaws or rules is only once every seven days. The maximum fines are $200 per violation of a bylaw or rule, or $500 for violation of a rental bylaw.

Before a strata corporation imposes a fine or penalty, it must notify the tenant and/or owner of the particulars of the complaint and entitle that person an opportunity to respond in writing or have a hearing with council. Hearings are not part of the standard bylaws any longer and are a mandatory requirement under the act. 

Common violations of home-grown bylaws usually affect property use or obligation. In addition to fines and hearings, strata corporations frequently adopt amendments that are unenforceable. They try to incorrectly change property designations within the bylaws from common property to limited common property, so they can download the obligation to maintain and repair doors and windows on to owners, or they try to claim any type of rental applies to the maximum number permitted in the bylaws, or they will adopt one bylaw that permits one activity while prohibiting the activity in another bylaw.

Bylaws may have a profound impact on a strata community. Talk to your lawyer before you adopt any amendments.  To start a tribunal claim go to http://www.civilresolutionbc.ca 

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