Tony Gioventu
The Province

Dear Tony:

Every year when we have Canada Day, our strata council goes through the same problem with the same owners. They start a petition to amend the bylaws to allow owners to install flagpoles on their units. Every year we have the meeting, and every year the amendment gets defeated. We are now in year five, and they never manage to get enough support for the amendment.

This year, they have advised that they will use the Civil Resolution Tribunal to enforce the strata to permit the installation of the Canadian flag. We are a bit concerned because we do not want owners attaching holders or poles to our buildings and causing long-term damage, even though one owner has already attached a flagpole to the side of his townhouse. We are mostly concerned about the jurisdiction of the Civil Resolution Tribunal and whether it could order something like this.

JVW, Nanaimo

Dear JVW:

Many owners still have the perception that their home is their castle. In a strata, your home is not your castle, you simply reside in a part of the castle.

Even in bare-land developments where owners have more control over their individual homes, a strata may adopt bylaws that regulate use and appearance of strata lots, including the buildings on the strata lots. For all other strata corporations, such as townhouses, apartment-style or highrise buildings, the bylaws of the strata corporation will apply to the strata lots, and the use and enjoyment of common property. Anyone who alters common property without written permission will be subject to those bylaw applications.

The Civil Resolution Tribunal will come into effect later this year and most strata-type disputes that relate to the collection of money, enforcement of bylaws, strata compliance with the Strata Property Act, Strata Regulations and bylaws of the strata, and owner or tenants requirements to comply with the bylaws will be potential disputes that may be resolved through the tribunal.

In your situation, where an owner installed a flagpole attached to a building that has altered the common property without the permission required in the bylaws, the strata corporation may enforce the bylaws, impose fines and remove the alteration and seek damages for the repairs back against that owner.

A successful decision from the tribunal may include an order for the owner to pay those fines, any damages to the common property that had to be repaired, an order to comply with the bylaws and an order to cease altering common property without written permission. The same type of orders to comply with the act or other enactments of law could apply against a strata corporation. There are no laws that permit owners to install flags and override strata legislation.

If you would like to test drive the new CRT system, go to civilresolutionbc.ca.

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Change is allowed: Everything open for discussion unless there is a specific real estate or strata condition

Tony Gioventu
The Province

Dear Tony:

Our 200-unit strata is searching for a new management company and one of our requests was for the companies to provide us with a proposed contract for services and fees.

In every proposal except one, the companies have provided the Strata Property Agents of B.C. contract. It has a number of terms and conditions our strata council is not prepared to accept, but the companies are telling us this contract cannot be changed because it is a standard industry contract.

If we are not permitted to negotiate the contract, how do we get the services and conditions that are fair for our strata corporation, as well as the management company?

Carter J.

Dear Carter:

To begin with, there is no such thing as a standard industry contract for strata management agreements in B.C. A contract was created for the strata agents of B.C., and while that contract may have some copyright value, nothing prohibits amendments being attached to the contract when a strata corporation is negotiating a new contract or renegotiating an existing contract.

It is important for both the strata corporation and the management agent to negotiate terms and conditions that are in the interest of both parties.

For strata corporations with existing strata-management agreements, every time your company wants to renegotiate a term or fee in the contract, that provides you with an opportunity to reopen negotiations on terms and conditions of the contract. Everything in the contract is open to negotiation unless real estate or strata legislation requires a specific condition.

The whole basis of contracts is an exchange of services and products and money. What will you give us? What service will you provide? What terms and conditions apply to this contract? All in exchange for how much you will pay and what authority you are delegating in the contract.

The termination and assignment of contract clauses are often the most contentious. The Strata Property Act sets the default, or worse-condition scenario, to terminate a strata-management agreement requiring the strata to pass a three-quarters vote at a general meeting and 60 days notice. The strata corporation may negotiate whatever it feels is prudent. It could be a majority vote of owners at a general meeting or a unanimous vote of council, circumstances that result in termination, or any other condition, provided both parties agree.

In the event a company sells, it also sells its book of business to the next company. Assignment of contracts clauses are also disputed and they are not a standard form. It is your decision to determine whether your business can be transferred to another company or whether the contract terminates at point of sale.

Every strata corporation has the right to negotiate whatever it believes is in the best of their strata, which is its principle duty to the owners.

The best — and often only — time for negotiations is before you sign. Remember, your council is comprised of volunteers, they are not experienced contract negotiators. Retain an independent lawyer with experience in strata management agreements to help your strata understand and negotiate your contracts. No one complains when you do this right; everyone complains when something goes wrong.

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other

Dear Tony:

Our strata council is getting mixed information from our owners, our accountant and our property manager. The accountant said we have to file a tax return, the property manager said it is not necessary because we don’t pay taxes, and our owners don’t want us to file anything to avoid being on the tax radar screen. We have a resort strata in the Okanagan with an 18-hole golf course for members and the public and we manage eight guest suites in the clubhouse that are accessible for resident use only, not the public. We have a business number and company name for the golf course, so we separate all of the commercial service from the strata under strata lot 1, and the guest house is part of our residential area. No one wants to pay taxes, but I am concerned that if we are not reporting our revenues correctly, we may be paying back taxes and get penalized.

Gillian, council president

Dear Gillian:

It is true strata corporations (condominium corporations in other provinces) are non-taxable corporations. However, strata corporations may and do pay taxes in a variety of ways, including income tax if revenues are for commercial purposes and beyond the definitions set out under the Tax Act.

There are also taxes that can be imposed for other activities and through other jurisdictions. For example, if your strata has mixed residential and commercial strata lots, depending on the value, the strata may be required to collect and remit GST on the commercial strata lot fees. Likewise, if there is a rental pool, those strata lots, even though they are residential units, may trigger GST on their strata fees.

Provincial sales tax and hotel tax may also apply if a strata is operating a specific number of accommodations. A residential strata operating a single guest suite is not the concern. Your strata corporation operates eight guest suites and charges $75 a night. That triggers GST, PST and likely a hotel tax. Even though the strata is operating the suites only for residents and their guests, it is still operating a commercial enterprise.

Your strata should also be aware of the risks associated with operating guest suites and confirm your liability insurance covers these activities, and your ratified rules or bylaws authorize the user rates being charged.

The other side of taxation is strata corporations that generate significant revenues from commercial enterprises. These include items such as billboards or building advertising, public parking garages, communications leases and activities such as your golf course. Even though you have attempted to separate it from the strata, it is still a commercial entity of the strata corporation and subject to all federal and provincial tax legislation, labour relations legislation and safety legislation including WorkSafe and the B.C. Safety Authority.

For more information on taxation, go to cra-arc.gc.ca or www2.gov.bc.ca/gov/content/taxes.

© Copyright Times Colonist

Tony Gioventu
other

Dear Tony:

Our strata manager and council president have insisted that every council member has to sign a confidentiality agreement or resign from council. We were told this is a requirement of the act, but a few council members have challenged the intention of this policy and now everyone is back-pedalling. It does raise a serious matter for strata council members. What type of standards do we have to maintain regarding confidentiality around the business of our strata corporation?

Satinder V.

Dear Satinder:

There is no requirement for a confidentiality agreement in the Strata Property Act, regulations or standard bylaws. It’s possible your strata corporation has adopted a bylaw relating to such agreements, but even then, is it an enforceable bylaw?

Is it wise to attempt to censor or silence your council members, which may conflict with their duties to the strata corporation?

The act and standard bylaws provide sufficient requirements for council members’ behaviour, types of meetings where observers are not permitted, and what information is reported in the minutes. The Personal Information Protection Act and common law principles also apply.

Every council member is required to act honestly and in good faith with a view to the best interests of the strata corporation.

There are three occasions where the strata council meets without observers (in-camera or off the record): when the matter relates to bylaw contravention hearings, when it deals with hardship rental restriction applications, and when the presence of observers would interfere with an individual’s privacy.

The decisions that follow those types of meetings are still recorded, to provide the owners and future strata council with a record of what was done.

For example, “the owner of strata lot 15 has been granted a hardship exemption from the rental restriction bylaws for a period of two years.”

Throughout the hardship application process, the owner may have provided confidential financial or medical records. The council has a duty to protect that personal information and would not publish anything other than the final decision, although a strata council may retain personal information that supports their decision in the event of a claim.

There are also conditions that can apply to common practices such as procurement.

If a strata corporation has issued a request for bids on a construction project or for services, it’s going to be bound by the conditions set in the request for proposals. Many companies see their bidding information and pricing as proprietary and don’t want it released to other parties without their explicit consent. For large construction projects, protecting bids is often a necessary condition to guarantee that contractors and suppliers will provide quotes.

Strata councils must heed the advice of their lawyers when dealing with lawsuits and claims. During the course of a lawsuit or insurance claim, shared information could be detrimental to a court action and harmful to the strata corporation’s interests.

The best practice for strata councils is to remind council members when a matter is confidential, the reason and their obligations to protect the information.

Attempting to gag council members with a confidentiality agreement at the risk of expulsion may be contrary to the act, your bylaws and the best interests of your strata corporation.

If you have an indiscreet council member, deal with them openly and directly at a council meeting.

© Copyright Times Colonist

Tony Gioventu
Other

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John Tenpenny
Other

Potential profits are waiting to be reaped by B.C. condo owners, especially in older buildings, with a change to the provincial Strata Property Act, but agents expecting a rush of new listings and clients should temper their expectations says one local expert.

The proposed change, which could come into effect by year’s end, would make it easier for strata owners to dissolve their strata corporation and sell the entire building. Under the change, 80 per cent of strata owners, rather than the current unanimous vote, would be needed to dissolve the strata.

The new legislation has passed first reading, and he expects it to become law as early as the end of this year.

“Some of these older buildings have been maintained properly, while others haven’t,” Matthew Lee, a real estate agent with Macdonald Realty Ltd. in Vancouver, told CREW. “So a number of these buildings are underfunded and there is no Plan B for some of these owners. B.C.’s strata depreciation reports, now mandatory for most buildings, have exposed the level of repairs that some buildings will need.”

In some cases, strata owners want to sell the property to a developer who can put it to better or more profitable uses, such as being replaced by a newer larger building, with more units, possibly handing listings to local agents, though a few years down the road.

Lee also notes that the proposed change will provide the development community with a greater degree of certainty, knowing that the existing zoning provides for replacing (and perhaps) increasing densities, as opposed to rezoning, which can take up to 15 months or longer for smaller scale projects.

If owners decide to sell individually, that doesn’t assure agents of more work, says Lee.

“There may be some stalling from some owners,” he says. “Owners may decide to hold off on selling individually because selling as a whole will yield a better price and people now on the fence may decide to wait or if currently listed, take it off the market.

“There is such a lack of inventory right now on the market and this may put more pressure on the market. It will continue to move pricing forward and continue to move the market eastward where people can find homes that they can afford to live in.”

For those owners who do sell, they will become potential clients, but not necessarily for local sales reps, says Lee.

“The question becomes where are they going to go? Most likely they’re going to be chasing the market when they come out and won’t be moving up in the same market.

“It may lead to an uptick in other areas.”

Copyright © 2015 Key Media Pty Ltd

Frank O’Brien
Other

A local real estate expert is warning condo owners to check their strata fees are sufficient, after a recent legislative change that allows strata corporations to require owners pay for certain repairs, if a majority of strata members agree.

Under the December 2013 amendment, the court can issue an order to proceed with critical repairs necessary to ensure safety and prevent significant loss or damage, if the strata owners have passed a resolution endorsing a special levy.

“Every strata corporation has to file a depreciation report that includes a 30-year budget for repair, upgrades and maintenance,” explains Frank Schliewinsky, co-publisher of the Vancouver Condo Report.

The budget for such repairs comes from the monthly strata fees that each condominium owner must pay. Schliewinsky urges condo owners to check if their current strata payments are sufficient. “Prospective buyers need to examine major variations from average strata fees or else they could find themselves paying a lot more than expected,” he said.

According to Vancouver Condo Report research, average strata fees for a high-rise building six to 10 years old in Metro Vancouver range from a low of $0.27 per square foot in the Tri-Cities to from $0.43 to $0.44 per square foot in downtown Vancouver and North Vancouver. (This would equate to from $270 to $440 per month for a 1,000-square-foot condominium.)

Strata fees for low-rise buildings are generally in the .23 cents to .32 cents, with rates for older buildings from 30% to 40% higher than for new buildings.

For more details on average strata fees by age and size of unit, see Condo Maintenance Fees by Size and Age of Unit.

© 2013 Real Estate Weekly

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Tony Gioventu
Province

Dear Condo Smarts: We bought into a 10-unit condo building in May. There are 10 parking spaces, and we assumed that each unit was granted the use of one parking space. Now we have found out that the top floor unit has three parking spaces. We have good street parking, but it is not underground, and not secure. The owner of the top-floor unit has lived there for 22 years, and has threatened to sue us if we take away any of her spaces. She claims that because she was the first purchaser, she negotiated the three parking spaces in her sale. She also claims that if she decides to sell, those spaces go with her unit. The remaining owners have met to discuss this problem and have decided not to create a costly dispute, but there must be some way of resolving and giving fair access to all owners.

— MJ, Nanaimo

Dear MJ: Exclusive allocations of parking, storage lockers, and deck and patio spaces can be found in strata corporations throughout the province. Many of them are legitimate and enforceable agreements, and many are often just “claimed” space by a dominant owner or the resident bully of the strata.

The first step council has to take is to review a copy of the registered strata plan, and any limited common property amendments that may have been made over the years.

If the property has been designated as limited common property by the owner developer, then it could only be changed by a unanimous vote of the strata corporation. If it was designated as limited common property by a vote of the strata corporation, then the strata could amend it by 3/4 vote.

Either way, if the area was properly registered as limited common property, that person has the right of exclusive use of the property. If the area is common property, the use may be regulated through the bylaws and rules of your strata, so you would then need to review all your bylaws and rules that are in force and effect. If there is an agreement for the use of the parking in the purchase agreement then a copy of the agreement should be provided to the strata council, so it can determine validity. At this time, it would be prudent for the council to seek a legal opinion on your options.

Ideally, it is in everyone’s best interest to avoid arbitration or the courts, but in the end, if there is no documentation, or willing cooperation of the parties, or a legal opinion to support the claim, the strata corporation or the owners have no choice but to commence an arbitration or proceed to the courts to obtain a decision.

If the person claiming to have the right of use of these spaces is on council, then it also has to be noted that with respects to an allegation of a bylaw violation, that person cannot be a party to the decision of strata council.

Tony Gioventu is the executive director of the Condominium Home Owners’ Association. E-mail tony@choa. bc. ca.

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Tony Gioventu
Province

Dear Condo Smarts: Our strata is a unique design in that we have a central courtyard, into which all 82 units face. In the cool periods and winter it is a warm, quiet safe area for our residents to spend time, but during the recent hot spells, it has become unbearable. The real problem is there is no air circulation, mainly due to the large canopy of trees that now grow in the courtyard. To compound problems, 14 owners have installed window-type air conditioners in their courtyard windows. Everyone is now complaining about the heat generated by them and the constant noise in the courtyard. A group of owners has raised a petition to force the removal of the 14 air conditioners, citing the noise and nuisance of the window units, and claims that they are a change to the common property that requires the approval of council. On the other side, we have several owners with health concerns who could not survive in their units without the air conditioners. Our bylaws do not prohibit air conditioners, and these are simply set in the windows without any alterations. I’m afraid we’re in the situation where no matter what we do, no one will be content. Any solutions would be welcome.

— Martin Reid, Delta

Dear Martin: One of the great benefits of the West Coast is our moderate climate. As a result, very few residential buildings have air conditioning systems built in.

With the recent heat waves, and the reduced air quality from the forest fire smoke, a cooler, filtered indoor climate is critical for anyone with associated health problems. As a result, our offices have been inundated with complaints about noisy air conditioners and their installation causing damage to buildings.

The strata council has an obligation to enforce their bylaws, but they may also have an obligation to some extent to accommodate residents who have special needs that arise from health issues or disabilities.

Therein is the tricky balance they have to satisfy. The real impact is what must be assessed. Is it a nuisance because an air conditioner is operating in a home and limits my quiet enjoyment of the common courtyard, or because someone has cut a hole in their townhouse to install an air conditioner, or because the air conditioner is mounted in a window next to your bedroom and runs noisily all night? Each circumstance may be a nuisance or bylaw violation, and each requires the council to assess the facts to determine if there is a potential violation, and what the solutions or remedies may be.

When conditions are extreme, it will require tolerance and co-operation for all owners. Communal living does mean we have to put up with each other’s basic needs at times.

Tony Gioventu is executive director of the Condominium Home Owners’ Association. E-mail [email protected]

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