Notable quote: I owe my success to having listened respectfully to the very best advice, and then going away and doing the exact opposite. -- G. K. Chesterton (1874 - 1936)

Update on rental restriction in Strata Property Act

Have you ever told your buyers a building’s good because there are no rental restrictions? If your client buys the unit and a rental restriction bylaw is later passed by the strata council, who do you think your buyer will blame? Give your buyers the information they need to make informed decisions. Helping them understand the rental restriction provisions of the Strata Property Act is an excellent place to start.

The Strata Property Act took effect July 1, 2000, replacing the Condominium Act. The Act allows strata corporations to prohibit or limit owners from renting their units. Exemptions may be available, depending on whether the tenant is a family member and when the bylaw was adopted.

What happens on January 1, 2006?
If a strata lot was a rental strata lot under the former Condominium Act, and was sold by the owner who originally bought from the developer, a rental restriction bylaw won’t apply until the date the rental period expires as disclosed in the Rental Disclosure Statement, or January 1, 2006, whichever occurs first.

If the owner of the strata lot is a subsequent purchaser, and the period that the strata lot may be rented under the Rental Disclosure Statement hasn’t expired, that owner can continue to rent the strata lot until January 1, 2006, despite any rental restriction bylaw.

The bottom line: Even if the building in which you show a unit doesn’t have a rental restriction, it doesn’t mean there won’t be one in the future. If your buyer isn’t aware of this possibility, he or she could be forced to sell the unit at a loss or suffer fines imposed by the strata council because of a breach of the rental restriction bylaw that was passed.

What can I do?
Any REALTOR® acting on behalf of either:

• a seller who wishes to represent that the rental disclosure statement exempts the buyer from an existing or future rental restriction bylaw; or
• a seller who wishes to represent that the strata lot may be rented out;

should advise the seller to avoid making any such representation or to seek legal advice from an experienced strata property lawyer before making any such representation.

Conversely, any REALTOR® acting on behalf of either:

• a buyer who wishes to rely on a rental disclosure statement to exempt him or her from an existing or future rental restriction bylaw; or
• a buyer who wishes to rent out the strata lot;

should advise the buyer to seek legal advice from an experience strata property lawyer and insert the appropriate condition into the Contract of Purchase and Sale, giving the buyer time to seek such advice.

Where can I find more information about the Strata Property Act?
To assist in the public’s understanding of the Strata Property Act, BCREA has published The Condominium Manual since December 2001. The second edition, published in 2004, contains 60 pages of new information, giving readers a clear understanding of how the Strata Property Act, regulations and standard bylaws work.

The Financial Institution Commission of BC has prepared 29 instruction guides to assist the public. One is entitled How to Apply Rental Restriction Bylaws. All are available at www.fic.gov.bc.ca.