Province

Each day that B.C.’s elected representatives fail to resume their seats in the Legislature serves as a reminder to the rest of us that our politicians have failed in their commitment to serve the people.

One example of their neglect is the failure of then-Liberal finance minister Gary Collins in 2003 to make good on a promise to revamp the inadequate and antiquated Strata Property Act.

It’s been five years and they’ve done diddly squat.

So much for the hundreds of thousands of condo owners and potential strata buyers in B.C. who aren’t getting the homeowners’ protection that is their right.

Indeed, the Vancouver Island Strata Owners Association says many of the more than 460,000 residents in B.C. with condo-property investments are at risk because of strata provisions that haven’t been publicly scrutinized or updated since 1998.

In the meantime, strata home ownership has increased to represent one in four taxable properties in B.C. — generating a sizeable chunk of revenue for the surplus-bloated provincial government.

Victoria‘s insouciance means B.C. is lagging behind other provinces in failing to keep up with the massive changes that have occurred in the strata-ownership market, especially on the West Coast, over the years.

There are a host of key deficiencies in our legislation — according to the association whose extensive review is available at www.visoa.bc.ca — that create hassles and hurdles for condo owners seeking information from, or about, strata councils and developers.

These inadequacies are responsible for many dysfunctional strata communities. They cause stress on owners, particularly first-time buyers and retirees, and help erode the market value of condos. They include: n Lack of adequate requirements for disclosure of property condition and financial data.

n Lack of prosecution or penalties for developers who ignore or breach the law.

n Lack of an adequate dispute-resolution process; the current one does more to indulge irresponsible actions than address them.

n Lack of protection of the rights of strata homeowners due to inadequate standards for licensing strata managers.

One of the most important recommendations brought to the government’s attention by the island association is the need for a dispute-resolution process for strata condo owners similar to the one offered by B.C.’s Residential Tenancy Branch for landlords and tenants.

“Strata owners require simple, direct and affordable access to due process for enforcing the [act] and resolving issues,” the report states.

“The transparency and accountability needed in strata legislation should start with the process used to develop it.” Indeed, condo owners and prospective strata-property buyers have been waiting too long for government to clean up its Act, particularly considering the hefty Property Transfer Tax they’re required to pay the B.C. government on every purchase.

Government estimates of revenue from the PPT for fiscal 2008-09 run as high as $1 billion, a substantial chunk of that money will come from the sales of new and previously owned strata condos.

Their owners deserve better.

© The Vancouver Province 2008

 

Tony Gioventu
Province

Dear Condo Smarts: I own two rental units in Vancouver. A number of us owners have noticed that our strata fees are not being allocated the same way ,so I started asking questions.

Without my knowledge, one of my tenants had requested the additional use of a parking stall. The council granted the request but there was a charge of $125 per month. After three months the tenant stopped paying the rental, so the council decided to add it to my monthly strata fees.

Without advising me, the property manager adjusted my direct withdrawal amount to pay the parking-space rental. Several other owners have also noted similar problems. I have two questions: How do we stop the strata from charging for items we didn’t authorize? And how does the strata get to charge additional rental fees above strata fees?

— JW, Edmonton

Dear JW: Legislation permits the charge of user fees for common property and common assets if the fee is reasonable and it is set out in either a bylaw duly passed and registered by the corporation, or a rule created by council that has been ratified at the next general meeting.

Council itself does not have the ability to impose the fee. Council may create a rule that sets out the conditions of the user fees and the rates, and then the owners by majority vote have to ratify those user fees and rates at their next general meeting.

User fees are designed to permit additional benefits to owners, tenants and occupants on a user-pay basis. They include items such as additional parking, storage lockers, common grounds for uses like greenhouses and community gardens, moorage at marinas, health facilities and golf-course memberships.

Strata councils also need to understand that rules and bylaws are enforced against the individuals who enter into the agreements or violate bylaws. If the tenant stopped paying, the strata corporation has the right to remove the use of the space; it does not have the right to impose this against your strata fees and direct payments without your consent.

It is in the best interest of both the landlord and the tenant to identify such additional costs and bylaw fines and penalties in your tenancy agreement before you agree to the rental. Landlords who rent strata units in B.C. need to be aware that they ultimately are liable for their tenants’ actions if the tenant departs and they are left with fines and costs incurred by the tenant.

A common cost landlords do not anticipate is a large insurance deductible if, for example, the tenant floods the building. If the tenant has no insurance or is unwilling to pay the amount, the landlord may be faced with the cost.

Contact your council or manager and address the matter quickly. If there are additional costs or violations, the strata must — under section 135 of the Strata Property Act of British Columbia — provide you with notice of a violation of a bylaw or rule, and an opportunity of a hearing or written response before any fines or penalties may be imposed.

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

© The Vancouver Province 2008

Tony Gioventu
Province

Dear Condo Smarts:

I recently bought a condo from a man who was the first purchaser from the developer in 2004. With the unit, I bought two parking spaces, one for handicapped use and one next to it. They were both within five metres of the elevator and this was attractive for me for personal security. I received a letter from the strata council last week advising me that I would be losing my handicapped parking space because an owner who was recently wheel-chair-bound requires it for access to the building.

I understand the person needs the access and there is no other specific space allocated for such use, but how can the strata corporation change the ownership of my parking spaces? The documents clearly show that the two parking spaces were included with my purchase.

— E.F., Richmond

Dear E.F.:

This is a complicated problem and comes with an even more complicated answer.

– If the parking spaces are designated as “common property,” then the corporation administers them through the rules and bylaws.

– If they were designated as “limited common property” by the developer, the use can generally only be changed by a unanimous vote of the strata corporation.

– Finally, if the spaces are designated part of the “strata lot,” the designation cannot be changed without a unanimous vote, consent of the strata-lot owner and amendment to the strata plan.

But here’s the complication: The developer may have — through a lease agreement — assigned the use of the parking spaces to specific strata lots. If that is the case, what the buyer bought was the entitlement to use parking and perhaps use of a specific parking space, but they do not legally own the spot.

You will need legal advice on whether the sales agreement actually conveyed to you property that you are entitled to or not — and whether the lease agreements were created properly and are enforceable.

Most owners don’t own the spaces, yet on re-sales they frequently include the space as part of the strata lot.

To complicate matters even more, some leases or assignments are only buyer-specific and not registered to the strata lot and may expire once an owner conveys their lot.

Each agreement and set of conditions has to be reviewed separately to determine the types of assignments, allocations and use and conveyance of agreements, even their validity.

From a human rights perspective, your strata council probably has no choice in attempting to accommodate this person who needs the handicapped parking.

Schedule a meeting with council and try to find common ground to meet your needs as well as the strata’s obligations.

Tony Gioventu is executive director of the Condominium Home Owners’ Association (www.choa.bc.ca). E-mail: [email protected].

© The Vancouver Province 2008

 

Tony Gioventu
Province

Dear Condo Smarts:

Is there a way to enforce the illegal rental of part of a strata lot? Our strata in Esquimalt has 45 townhouses. Three of the owners in our strata have decided to sublet their basements and set up illegal suites. Our strata corporation does not prohibit rentals, but our bylaws require that each townhouse be occupied by one family. The rentals have resulted in parking problems and conflicts with neighbours. Are there rules we can enforce that might help resolve the problem? — Connie WG, Esquimalt

Dear Connie:

Surprisingly, illegal secondary suites in townhouses and even within strata corporations are a growing complaint. Just because it’s a basement doesn’t not make it legal or safe as a place of residence. Strata corporations with “caretaker” suites that are roughed out of the parking areas or common areas that are not legal also pose a safety risk for the occupants and building. There are several issues strata owners and council are faced with. Life safety and code compliance with each local government is a serious matter. In the event of a fire or emergency, many secondary illegal suites do not have sufficient exits. If there is an illegal suite, contact your local bylaw enforcement officer. They may issue an order to cease occupancy and restore the space to its original use. Insurance for the homeowner, tenant and strata corporation is also a serious issue. The insurance policy may have specific restrictions or limitations if there is an illegal suite or the condition is not disclosed to the strata insurer.

Lifestyle conditions are also a significant impact for the strata corporation. Your strata was likely not designed for secondary suites. Your water service and drainage systems, fire suppression and safety, hot water heating, building ventilation, parking, storage and common-area use are designed and zoned for specific single family dwellings.

Here’s a worst-case scenario that occurred in Metro Vancouver in July: A grow-op was discovered in an illegal basement suite in a townhouse complex. The result has been restoration requirements to four of the additional adjacent townhomes and no insurance coverage. The strata corporation is faced with the bills and hoping to recover enough proceeds from the sale of the strata lot once it is restored to cover costs. Four families have had to move until repairs and are complete. It may be up to a year before they can return. If you want to live in a strata with a suite as a mortgage helper, consult your real-estate agent. They do exist, and might be the investment you’re looking for.

Tony Gioventu is executive director of the Condominium Home Owners’ Association (www.choa.bc.ca). E-mail: [email protected]

© The Vancouver Province 2008

 

Tony Gioventu
Province

Dear Condo Smarts:

I have a very short question. Our home was totally damaged by a fire in a neighbour’s unit earlier this spring. Repairs and rebuilding have been going well, but we have been unable to live in our unit since and are in temporary housing paid by our insurance until the restoration is complete.

We received a notice from our strata corporation advising that we had not paid our strata fees since the March fire and that a lien may be imposed if we don’t pay. They have agreed to wait until we are back in our home to pay the fees. However, do we have to pay our fees even though we are unable to live in our townhouse because of someone else’s fire? — Lillian Mason, Okanagan Kootenay region

Dear Lillian:

Unfortunately, there are some things that never go away regardless of the circumstances. Taxes, mortgages and strata fees are all part of the cost of owning property. Strata fees are the simplest form of taxes in that they are collected for the operation of your strata, the same way we pay municipal taxes for the operation of our local governments. Your strata council is acting generously because it is a bylaw requirement to pay your strata fees each month and they have an obligation to enforce the bylaws.

This column is a good opportunity to remind everyone who lives in or owns a strata to double check their insurance policies. The strata must ensure they are insured for full replacement value and that requires routine certified appraisals to meet your insurer’s requirements. If you are underinsured, your insurer may only be obligated to pay half of your claim. Owners, landlords, tenants and occupants should ensure they have a condominium/strata homeowner policy to protect their personal property, any betterments to the strata lot and underinsurance.

In the event you find yourself paying a deductible or the insurance is insufficient to cover a loss, your homeowner insurance is the final safety net. Like Lillian, make sure your policy covers you for outside living expenses in case your home is uninhabitable. When buying a homeowner policy, bring your strata policy with you so your insurance broker is aware of the limitations of the strata coverage.

Tony Gioventu, is executive director of the Condominium Home Owners’ Association (www.choa.bc.ca ). E-mail: [email protected]

© The Vancouver Province 2008

 

Bills for clean-up and repair can run to more than $50,000

Tony Gioventu
Province

Dear Condo Smarts:

Your recent column on small strata corporations has hit home for our tri-plex in Saanich.

Our building was constructed in the early 1970s and our business has been operated fairly informally. Everyone has voluntarily paid their share of the roofing repairs and insurance, and everyone has tended to the maintenance on their own strata lots and garden areas.

A few months ago, an owner noticed a depression in her yard area. When we investigated further, we discovered an old oil tank that was never removed. Based on the quotes we have received, it may cost $10,000 or more for removal of the tank and for restoration, but one owner refuses to pay their share.

The excuse is: “The tank is in her back yard, so why should we pay?”

Our options are to ignore the repairs, pay for them ourselves and collect later or force the matter into court. Are there any other options possible for a small strata?

— DW and KW, Saanich

Dear D and K:

Every homeowner or buyer in B.C. needs to be aware of the risks and costs of unused and decommissioned fuel tanks.

The costs of removal can start at $5,000 and easily rise to more than $50,000 if there are any environmental damages. In strata corporations like yours, fuel tanks are frequently on common property because they were a solitary supply for several units. This means the strata corporation as a whole will be responsible for the costs of removal and restoration.

It is not a requirement of the current B.C. Fire Code to remove any oil tank that has been out of service for more than two years. However, many local government bylaws either require the removal and restoration or refer back to older codes that did require the removal of such tanks.

Check with your local government first. They will tell you what is required and what your options are. In some regions you may be permitted to simply fill the tank with sand without having to remove it — provided there is no evidence of leaking or environmental damages.

In some cities, the tanks must be removed under the bylaws. There are hazards and risks, especially if the tank is leaking or has failed a pressure test and shows signs of contamination.

In addition, if the contamination affects other neighbouring property, you can be held responsible for the restoration of those properties as well. If your strata refuses to remove the tank, contact the local bylaw enforcement officer to determine if there is a bylaw violation, and the local government may order you to undertake the work.

An order by an authority must be complied with under the Strata Property Act. There are also health risks associated with contamination, hazards associated with collapses, and your insurance company may cancel your insurance or nullify a related claim if you have failed to report the tank or failed to comply with the requirements of restoration.

If you are selling your home and there is an unused or decommissioned tank, you must also disclose that information.

Tony Gioventu is executive director of the Condominium Home Owners’ Association (www.choa.bc.ca). E-mail: [email protected]

© The Vancouver Province 2008

 

Tony Gioventu
Province

Dear Condo Smarts:

We are in a new strata that the first owners moved into in July 2007. Our council has been working very hard to create a management plan, but we get no co-operation from either the developer or our property manager, who was hired by the developer. We have no access to our building records and are unclear on who we go to when we have a building problem. Since our first AGM in November, we have had two pipe breaks and a roof leak. Both were easily repaired once they were discovered, but now our insurance is increasing substantially and we still don’t know what we need to do. The members of our council are all volunteers and don’t know what to do next.

— CC, Richmond.

Dear CC: The first year of a strata is the toughest. If you don’t get off on the right foot it can be very costly. At the first AGM your developer was required to hand over all the building records, contracts, operating instructions, suppliers’ names, plans and warranties. That may have been provided to the manager, but your council also needs those records to make decisions and understand your building system. Get the list from Section 20 of the Strata Act, and review all of your documents and confirm that everything required exists. If there is anything missing, track it down through the developer.

Next, make sure every council member has a copy of the common-area warranty for your strata, and individual copies of warranties for products and materials such as: the elevator, roof, carpeting, boilers or safety systems. The warranty commences on the date of the first sale or first occupancy, whichever came first. In the warranty documents, there are critical dates that limit claims and set out conditions of how to file claims. If you have any building warranty claims, they are only treated as a valid warranty claim if you file the claim with the warranty provider in the proper form.

While calling the developer to co-ordinate service may resolve the problem, it is not necessarily a valid warranty claim. As your one- to two-year period is coming up, it may also be prudent to have a complete building inspection conducted to form part of a claim process before the expiry dates.

The two-, five- and 10-year generally means that building systems are covered for two years, the envelope for five years and the structure for 10 years. The warranty is a contract with your strata that also sets out specific maintenance and inspection obligations. Make sure you uphold your obligations to protect your warranty interests. Your warranty can be worth as much as $2.5 million in coverage per building. If you are getting no co-operation from the developer or manager, it might be time to take tougher action and seek legal recourse.

Tony Gioventu is executive director of the Condominium Home Owners’ Association (www.choa.bc.ca). E-mail: [email protected]

© The Vancouver Province 2008

 

Duplex or triplex? Even small stratas must hold proper agms

Tony Gioventu
Province

Dear Condo Smarts: Our strata corporation is a small, three-unit townhouse complex. We are very informal about how we agree to pay for repairs and bylaw enforcement; we deal with situations as they arise.

We recently missed notice of a lawsuit, which was sent by mail to an owner who was away for two months, and now we are scrambling to address our failure to respond to the claim within the correct time period.

It did raise a serious question for our owners, though. If someone had to serve notice to a strata corporation, how would they find the official address?

— TR, Parksville

Dear TR: The solution to the official address is simple. Every strata corporation must ensure that the correct mailing address is filed in the Land Title Office. The address may include a fax number, and if the official address ever changes, then the strata must file a correction.

Use a Form D — it’s available at www.fic.gov.bc.ca/pdf/ responsibilities_strata/strataforms2.pdf — and go to the Land Title Survey website for a schedule of fees: www.ltsa.ca.

This does raise a more important issue,Tony Gioventu

condo smarts though, and that is the operation of small strata corporations, such as a duplex.

Every strata, regardless of the number of units, is bound by the Strata Property Act. Unless you convene a proper AGM each year and elect a council, your strata may not be in the position to collect strata fees, special levies, negotiate contracts, settle insurance claims, enforce bylaws or provide transaction forms for property sales.

It is the common practice of smaller strata corporations to function less formally, but the strata decision-making must still conform with the Act for your own protection.

The most common small- strata complaint our offices receive relates to improper or non-existent insurance in small strata corporations. Even in a triplex the common areas and assets that include the building systems must be insured by a strata corporation insurance policy.

If a new roof is necessary and you have to pass a special levy, convene a special general meeting and approve a proper resolution. Without that you won’t have the authority to enforce a collection process for that one owner who decides not to pay.

While it may be easy to act informally in a small strata, don’t cut corners on the legal requirements of the Act.

Tony Gioventu is executive director of the Condominium Home Owners’ Association (www.choa.bc.ca). E-mail: [email protected]

© The Vancouver Province 2008

 

Tony Gioventu
Province

Dear Condo Smarts:

One of our strata members has become wheelchair-bound for at least six months as she recovers from an accident. She wanted a ramp installed so she can access her ground floor unit, but our strata council turned her down. I am concerned that we may have a legal obligation to help this owner, but what do we do if the owners won’t permit the installation of a temporary ramp? — GH, Vancouver

Dear GH:

Before your strata corporation gets sued, you need to seek legal advice. Most strata owners do not realize that the B.C. Human Rights Code applies to strata corporations. Examples of conflict include use of property, enforcement of bylaws, election to strata council and even the purchase of property.

Section 8 of the code reads: “A person must not, without a bona fide and reasonable justification, (a) deny to a person or class of persons any accommodation . . . or (b) discriminate against a person or class of persons regarding any accommodation, service or facility customarily available to the public.” For more go to: www.bchrt.bc.ca

© The Vancouver Province 2008

 

Verbal agreements can leave a strata in tough spot

Tony Gioventu
Province

Dear Condo Smarts: Our strata recently replaced the roofing system on our building. The special levy that was approved was for the amount of $175,000 to cover the total cost of the project. We have just discovered the actual amount of the project was $261,000, a cost overrun of $86,000.

This amount was paid out of our reserve funds and leaves us with barely $1,000 for emergencies. Council claims the bid was only a verbal quote and once the project started, additional damage was discovered. When council received the invoice, the contractor pointed out it was only a quote and there was nothing in writing.

So are we stuck with these cost overruns? Doesn’t the council have to come back to the owners before paying the additional costs?

— JB, Nanaimo

Dear JB: No matter what the agreement — whether it’s a major contract or an owner agreeing to cut the lawns for your strata at $10 per hour — put it in writing.

Allyson Baker, a lawyer with Clark Wilson LLP in Vancouver, has some helpful tips and advice that every consumer should consider.

“A verbal agreement is a contract. However, important issues and conditions that protect consumers are frequently not negotiated. It is also much more difficult to enforce the agreement when the standards of performance and the scope of work are not written. The result is the consumer cannot manage expectations if you don’t have a written record.

“Establishing the insurance expectations, Worksafe obligations, warranties, timing of payment, work schedules and site restoration conditions are all critical parts of a written agreement. If the strata corporation ends up in court over a dispute, what the parties agreed to is much more difficult to establish without a written agreement.”

In the situation of this strata, they should have considered seeking the approval of the owners for the additional costs. The owners may have chosen a special levy, use of reserve funds, or even the option to dispute the matter in the courts before paying the additional costs.

At this point the contract is fully paid. The strata can’t hold back any funds to dispute and the council has paid an unauthorized expense.

Before anyone enters into an agreement for service, construction, buying or selling a home or other products, get the agreement in writing and get legal advice.

If a contractor/supplier or agent is unwilling to enter into a written agreement, move on to someone who is.

Tony Gioventu is executive director of the Condominium Home Owners Association (CHOA): [email protected]

© The Vancouver Province 2008