Don’t be fooled by reading only strata plan

Tony Gioventu
Province

Dear Condo Smarts:

Our letter is more of a warning to other people who buy into a bare-land strata, but we also have a question.

We bought a house in a typical “subdivision” in the Okanagan in August 2007. It was perfect for us: all on one level, a quiet adult gated community that was safe and secure.

At the time of our purchase, the real estate agent told us it was the perfect investment for our needs. Moreover, the agent told us that even though it was a strata, it was a bare-land strata and that other than a common road we were totally independent and no one would interfere with the use of our property.

In essence, it seemed like simply a more economic way of owning a single-family home. Half a year later, we are facing a $25,000 special levy per home to rebuild our water delivery and sewage system, and new regulations on water treatment and delivery that threaten to impose an even greater cost and burden on owners.

Before anyone buys, they need to understand one thing: What’s the difference between a bare-land strata and a building-type strata?

— LC, Okanagan

In basic terms, there is no operational difference between a bare-land strata and a building-type strata, commonly referred to as townhouses or condos.

Unlike a building-type plan, in a bare- land strata, the strata corporation has no insurable interest in buildings not shown on the strata plan. The result generally is that the house is entirely part of the strata lot and the repair, maintenance and insurance of the bare land strata lot and home is normally the responsibility of the strata lot owner.

But don’t be fooled by only reading the plan. A strata corporation may take responsibility for certain portions of a strata lot. To understand if the strata is going to be paying the bills for any parts of a strata lot, you would have to read the bylaws before you purchase.

For example, where all of the homes are identical on a bare land, the developer or strata owners may have created or adopted bylaws where the strata will be responsible for building exteriors to ensure they are routinely repaired and maintained.

The strata corporation may adopt bylaws that prohibit rentals, set age restrictions, limit or restrict pets, parking, use of common facilities and even go as far as determine the colour of your house or alterations to your strata lot.

Bare land owners are also subject to strata fees, special levies and settlements of law suits. Before you buy, read the bylaws and review the strata plan.

Find out what common facilities you are going to be paying for. Request a copy of the strata insurance policy. Even a bare-land strata must retain insurance for a minimum of $2 million in liability insurance and fully insure its common assets.

If the strata hosts its own water and sewage facilities, those are costs you will be paying for in the future.

Tony Gioventu is executive director of the Condominium Home Owners Association.

E-mail him at [email protected]

© The Vancouver Province 2008

To meet, or not to meet

Tony Gioventu
Province

Dear Condo Smarts:

Our 179-unit strata recently held an emergency special general meeting to approve a special assessment for $450,000 for an emergency roof repair.

We were told by our property manager to submit our proxy by fax or mail to a specific location within seven days to ensure our vote would be counted.

We found out by letter that the resolution was approved and we received a letter demanding our portion of the special levy no later than May 1.

In retrospect, we should have refused and raised our many concerns over the procedures, but one of our council members who has just returned from vacation has demanded that the meeting results be voided and that we have a properly convened meeting.

The manager is refusing because the council has already signed the contract and it wouldn’t make any difference at this point to the outcome.

We’re in a mess and our owners are fearing the worst case scenario, a nasty court dispute. Is an special general meeting by proxy legal?

— Jenny Lo, Richmond

Dear Jenny:

A special general meeting by proxy is not permitted by the Strata Act. It appears you have some confusion as to procedures and what rules of order your strata is using.

Under some rules of order for societies, absentee ballots are permitted; however, absentee ballots are not permitted under the Strata Property Act.

The proxy form is simply a written document that authorizes a person to vote on the owner’s behalf. You must have a person voting on your behalf at the meeting, which is why the proxy must appoint a person. That person cannot be a party that provides strata management services or an employee of the corporation.

It is possible to agree to a waiver of a special general meeting, if: all eligible voters waiver, in writing, the holding of the meeting and consent, in writing, to the resolution, although I suspect that would be almost impossible in a 179-unit strata.

A proxy may do anything an owner may do, unless limited or restricted in the written document.

The strata cannot adopt a bylaw that limits the number of proxies a person may hold because they cannot dictate who you bestow your proxy upon, and it would be technically impossible to comply with bylaw- enforcement procedures under Section 135 of the Act.

Your strata corporation should convene a proper special general meeting with the prescribed 20-days written notice period to properly ratify the resolution, otherwise you may have an unenforceable special levy.

This would also be the right time to consult a strata lawyer to ensure you procedurally resolve this impasse.

Tony Gioventu is executive director of the Condominium Home Owners Association.

E-mail him at [email protected]

© The Vancouver Province 2008

Facing future costs

Tony Gioventu
Province

Tony Gioventu
Province

Dear Condo Smarts: Our strata corporation has hired a consultant to help us with a major construction involving roofing and decks.

We had an engineer set the specifications and the successful bidding contractor submitted a bid that included materials and labour. There were no other costs in the bid that were identified.

Our consultant recommended that we sign the “standard” contract, so we proceeded with the agreement and construction.

The good news is the contractor did a great job and on time. The bad news is we were hit with more than $200,000 in disbursement costs that were not part of our original contract, so we’re disputing the final price.

Have we possibly signed a blank cheque here?

— MO

Dear MO: The devil is in the details. Before anyone signs a major contract, they should have a legal review of the terms and conditions. The devilish details are the definitions of the terms. If you signed a contract that includes disbursements, is that term defined somewhere in the contract?

At this point you need a legal review of the contract terms and conditions along with the bid. Then your lawyer needs to advise whether you have any reasonable grounds to dispute the charges.

Never agree to disbursements unless they are individually defined in the contract and the cost of each disbursement is itemized. You can also negotiate a limit on the total amount of disbursements you will approve.

If you don’t, you may indeed be signing a blank cheque.

Tony Gioventu is executive director of the Condominium Home Owners Association.

E-mail him at [email protected]

© The Vancouver Province 2008

Tony Gioventu
Province

Dear Condo Smarts: We are in a divided strata of a highrise and a commercial division. Several years ago, we voted to create sections so that the costs that were allocated exclusively to each section would be fairly divided.

In March, the residential owners were voting on a bylaw that would limit rentals to a maximum of five units. Several commercial-section owners registered their votes and voted against the resolution, preventing us from adopting a rental- limitation bylaw.

We lost the vote by one. Can you please explain to us why the commercial section has a right to dictate to the residential section how owners use their strata lots ?

— JWV, Vancouver Island

To understand sections you have to understand the legal authority of a strata corporation.

The Strata Act says that a strata corporation has the power and capacity of a natural person of full capacity. In simple terms, a strata corporation can buy or sell property, mortgage, lease, commence lawsuits, create bylaws and enter into contracts for service or operations, like any normal person.

A section is a corporation and has the same powers and duties as the strata corporation. So a section can do all of the same things, but only those that apply to that section. This also means sections can create their own bylaws that only apply to their section, such as your rental-restriction bylaws, and only that section votes on those bylaws.

The commercial section did not have voting authority at the special general meeting of the residential section as it only applied to the residential section.

Furthermore, when I reviewed your documents and minutes, I discovered each commercial strata lot was counted as one vote, but on the registered strata plan, all of the commercial strata lots have less than one vote, in most cases .49 votes. Therefore, the commercial section did not represent enough votes to defeat your resolution.

Commercial strata lots may have fewer or greater than one vote per strata lot as their voting is based on the relevant area of their strata lot.

Always seek legal advice when creating or amending rules or bylaws that pertain to sections.

Tony Gioventu is executive director of the Condominium Home Owners Association.

E-mail him at [email protected]

© The Vancouver Province 2008

If disclosure was misleading, claim might be worth it

Tony Gioventu
Province

Dear Condo Smarts:

We recently bought an apartment in a 55-year-old building that was converted from a rental building to a strata-titled building. Within three months of moving in, all the new owners are facing a new roof, new boiler and likely major plumbing upgrades.

We have to admit we didn’t insist on any probing inspections of the building systems. However, we were under the impression that the owner of the building had to provide us with disclosure of any conditions in the building that may be of a major expense or risk to our investment.

Our real estate agent advised that there were no problems disclosed with the building so we went ahead with the sale. Now that we’re facing all of these accumulated costs, is there any way we can go back to the original building owner to recover some of our losses ?

— TM, Fraser Valley

Dear TM: A conversion of property from one-titled to divided-strata-titled property is basically the same as creating a new strata.

For the purpose of marketing, the owner of the building creates a disclosure statement defining the property that is being created and sold. This covers what is being included with the property and the strata lots and a projected budget for the first year of operating as a strata. In most cases, the owner also includes a conditional disclosure of the age of the building and the building systems.

If you read the disclosure, you’re likely going to discover the owner has disclosed the building is 55 years old and that many of the building components are also in the same age category. If the disclosure was misleading, your strata may have a reasonable claim.

Before anyone buys a conversion they need to insist on building inspections, maintenance records and renewal schedules of roofing, exterior cladding and windows, plumbing and heating systems, electrical and gas services, elevator servicing, etc.

There is also another type of strata about to hit the market that buyers need to be aware of.

When the Homeowner Protection Act came into effect in 1999, there was a prescription that required new strata-titled property to have mandatory warranty coverage for two, five and 10 years.

However, there is an exemption that buyers need to be aware of. A development that was intended and used solely for rental purposes by the owner/developer could be exempt from warranty provided suites were not sold or marketed for a period of 10 years.

The first of these such exempted buildings will be coming on the market in the next year and may have the same type of building-condition risks relating to maintenance and operational problems.

Like any other piece of multi- family real estate, their value is only as good as their original construction and maintenance and renewal programs.

Before you buy, engage a qualified building technician or engineer to review the complete building system. Remember, as a strata owner you not only purchased your unit, you also purchased the share of risks of all the common property.

For more information on strata operations, you can attend a one-day seminar April 12 at UBC Robson Square. Contact Deanna Ferguson at 604-515-9672.

Tony Gioventu is executive director of the Condominium Home Owners Association.

E-mail him at [email protected]

© The Vancouver Province 2008

Tony Gioventu
Province

Dear Condo Smarts:

Our strata recently experienced a serious water leak damaging several floors in our building.Our insurer and restoration company did a great job. However, we have a problem resulting from the repairs. The restoration company has advised that asbestos has been discovered in the “mud” used to finish the drywall.

We have been unable to confirm the claim with a written report and there is no record of testing of the materials. The restoration company has refused to provide copies of the testing procedures and results.

So now what do we do for disclosure ? We cannot obtain any proof of the asbestos, owners are aware of the information and buyers are asking questions.

How can the strata or owners disclose a potentially hazardous condition in the building with no proof ?

— WC, North Vancouver

Dear WC: Industry generally stopped using asbestos in drywall mud around 1985. The problem with the asbestos is that it is a low risk in its inert state in the mud, but once the walls are saturated or construction disrupts the surface through renovations or demolition the problems begin.

The asbestos can become airborne resulting in a risk to the contractors on site and the residents in the building. A contractor has a duty to inspect and test for asbestos if the conditions are right.

If asbestos is discovered they are required by law to comply with the WorkSafe (WCB) regulations for the protection of their crew. But how does the strata corporation find out what’s going on?

Reputable contractors and restoration companies willingly provide copies of all testing, identify who conducts the testing, and testing protocols. Both the strata corporation and the insurer are the clients and they are entitled to all of the information. Once you obtain this information it will be incumbent on the strata corporation to report it to the owners and subsequently to potential purchasers on request.

Here are some questions that a strata corporation should ask the contractor or testing authority.

n What is the concentration of asbestos in our building materials?

n Does the asbestos pose a health threat to our residents if it’s undisturbed?

n Are there special precautions we should take during construction or renovations?

n Are there additional steps that our strata corporation has to undertake to comply with WorkSafe standards and regulations?

If the contractor refuses to co-operate you may want to contact an independent testing facility to verify the claim.

For more information on asbestos go to the WorkSafe web site at: www.WorksafeBC.com and enter Asbestos into the search window at the top of the home page.

Tony Gioventu is executive director of the Condominium Home Owners Association.

E-mail him at [email protected]

© The Vancouver Province 2008

 

Who is responsible for cleaning them? First, look up the strata plans

Tony Gioventu
Province

Dear Condo Smarts:

I live on the 12th floor of a high-rise building. Recently, I noticed a water stain on my hallway ceiling. I believe the stain is due to condensation created by a plugged dryer vent.

At the same time, I noticed it was taking an extra long time for my clothes to dry. Could you advise whose responsibility it is to ensure the dryer vents are cleaned on an annual basis?

The dryer vents in our building were cleaned in late 2006 but not done in 2007 as the roof anchors had to be replaced.

— BR, New Westminster

Dear BR:

Who’s responsible for dryer vents? Who’s responsible for windows? These are the two most common questions we field every day and share a common answer.

As no two strata plans and bylaws are identical, the answer cannot be general. The boundaries of strata lots are between units defined by the walls, ceilings, floors, common hallways or outside walls, as shown on your registered strata plan.

The boundaries divide what is part of the strata lot and what is common property. So the first step for anyone is to look at the strata plan.

Next, look at the Strata Act and the Strata Bylaws.

According to the Act, common property is the part of the land and buildings shown on a strata plan that is not part of a strata lot.

Commong property includes: pipes and ducts located within a floor, wall or ceiling that forms a common boundary between two or more strata lots, between the strata lot and common property or between a strata lot and another parcel of land.

In most highrise and apartment-style buildings, ducting in the floors is common property.

The windows border the outside and the exterior and are also generally common property. The Act & Regulations do not permit bylaws that make owners responsible for common property.

That means the strata corporation must maintain and repair the dryer vents (ducts) and windows.

Many strata corporations routinely clean their ducts once a year, but it is not uncommon during the course of construction that a vent may have collapsed or was plugged with constructions materials; the exterior screens may be plugged or your dryer is simply not powerful enough to exhaust the air over a long distance.

Residents must use lint traps and clean them every time, otherwise the ducts will compact much quicker, and the long-term damage to interior finishes may be significant. If your unit is experiencing difficulties, then so are other units.

If the ducts are plugged, there is an excessive amount of moisture pumping into your building. The results will be mould and long-term damages. Tony Gioventu is executive director of the Condominium Home Owners Association. Contact CHOA at 604-584-2462 or toll-free at 1-877-353-2462 or e-mail [email protected]

© The Vancouver Province 2008

Tony Gioventu
Province

Dear Condo Smarts: Our 111- unit condo building in Vancouver is at war over the issue of smoking. We have been unsuccessful in the past years on passing a bylaw that would restrict smoking in common areas, and the prospect of owners not being able to smoke in their strata lots evokes a hostile response from every camp.

We have an older building that is not well ventilated, so whether someone is smoking in their strata lot or in the hallway, everyone on the floor shares the smoke. Council is ready to propose another bylaw at our AGM in May, but here’s what we need to know: Is a bylaw that prohibits smoking on common property or in a strata lot enforceable ?

— JR

Dear JR: There is some relief in store for every strata in the province when it comes to smoking on common property.

As of March 31, 2008, under the Tobacco Control Act, smoking is prohibited in places customarily available to the public.

These places could include common property areas of a strata complex. Those would include, elevators, hallways, parkades, common rooms like reception areas and swimming pools, laundries and lobbies or in the buffer zones around public areas, such as doorways or adjacent patios or entries.

So the question about smoking in common areas and enforceability has been somewhat addressed by the legislation.

But what about the strata lot ? This is nothing less than a very complicated and contentious issue. The balance is how to protect the rights of the non-smokers from secondhand smoke, especially when they share common walls, ceilings or floors and at the same time respect the rights of the smoker within their strata lot.

If your strata corporation is contemplating prohibiting smoking in strata lots then you most definitely need to seek legal advice in the creation of the bylaw, and consider accommodating those persons existing in the building who are smokers who may be heavily addicted to smoking or who have entered into tenancy agreements before the bylaw is enacted.

The strata should also consider why they are adopting this bylaw. Is it for nuisance or property-impact matters or health concerns ? The Heart and Stroke Foundation of B.C. & Yukon is developing a two-year project to address secondhand smoke in multi-unit dwellings, and is seeking your input on an important survey. You can complete the survey by going to http://ws4.voxco.com/IntWeb.dll/online/NRG/25380993 by March 25.

Tony Gioventu is executive director of the Condominium Home Owners Association. Contact CHOA at 604-584-2462 or toll-free at 1-877-353-2462, or e-mail [email protected]

© The Vancouver Province 2008

 

Tony Gioventu
Province

Dear Condo Smarts: With all the media coverage recently about presales going badly, we were wondering if you could answer a question for us. We took possession of our presales home in the fall, and everything with the sale went very well. The price was the same, the product was delivered on time and our unit was what we had anticipated.

Our strata does have a very real problem, however, with the parking. The developer intended on most of the presales to provide each person with two parking spaces, but now we discover there is barely enough for one parking space per unit.

Most owners we’ve spoken to are furious. Many have two cars and are having to either sell one or rent parking in a neighbouring parkade. Do we have any recourse ? Our real estate agent has told us a parking spot in downtown Vancouver downtown can be worth $25,000 or more.

— JG, Vancouver

Dear JG: Presales have a significant inventory of limitations and exemptions. When anyone buys a presale, they are not buying real estate. They are entering into an agreement with the developer for the right to purchase that real estate when the property is finally complete and the titles are created for conveyance.

The price, what you are buying and any terms or conditions in that contract are all part of the negotiations. Take great care in purchasing a presale agreement, though. As the first purchaser/party to the contract, you have seven days to reconsider your decision and have your deposit returned.

If you want to ensure you have a decent deal and reasonable security in the agreement, you must take your agreement to your lawyer for legal review before the seven days is up. Everything on a presale is negotiated and most, if not all, conditions may be subject to change, alteration, price increases, exemptions, exclusion or outright cancellation of the contract.

So, in many ways, a presale is a speculative investment and, along with that, come all of the risks of speculation.

Subsequent assignments (buyers) should also understand that only the original deposit by the first purchaser is secured, either in trust or by way of deposit insurance.

In simple terms, the first presales buyer can sell their presales agreement to another person. If their original deposit was $50,000 and they sell the agreement to a second person for $100,000 and make $50,000 profit, the only protection for the second purchaser is for the original $50,000. Any increase above the original deposit is not protected and at risk if the project is cancelled.

I did manage to obtain a copy of the presales agreement for JG’s building, and there is a limitation for parking. “Subject to availability and cost of construction, up to two parking spaces may be negotiated for a strata lot. Parking may be limited by zoning and construction limitations and will not be confirmed until final sale.”

The final sales agreements only included one parking space. It’s more than “buyer beware.”

Presales buyers must review every document, amendment and the final sales agreement before they proceed. Seek professional guidance and be prepared for the risks.

Tony Gioventu is executive director of the Condominium Home Owners Association. Contact CHOA at 604-584-2462 or toll-free at 1-877-353-2462, or e-mail [email protected]

© The Vancouver Province 2008