There are changes to rental rules in the BC Strata Property Act. Here is an example.

Published in the Vancouver Province on Sunday Feb 28th

Dear Condo Smarts: I have been working with a realtor and trying to find a condo to purchase for investment that I intend to use as a rental. There seems to be quite a bit of confusion right now over the types of units that can be rented. I have requested information certificates for two buildings and upon reviewing the bylaws and the number of rentals, there seems to be no logic in the relationship of the limitation on rentals and actual number of rentals.

Could you please tell us how we could find a building where we can buy a unit, rent it out, and have some longterm security over its use.
- Jens Crezma, Vancouver

Dear Jens: There have been some minor changes in the strata legislation that affect rental units.

A strata corporation is permitted to adopt a bylaw that limits or restricts the number of rentals to either a specific number, such as 10 units, or a specific percentage, such as 10 per cent of the total number of units. The changes in legislation now exclude family rentals, as permitted by the act, and hardship exemption rentals. So in the total count of the number of rentals permitted under a bylaw, those are no longer included.

There is no such description as "developer rentals", but I suspect you are referring to the effects of a rental disclosure statement. There are two different exemptions now that apply to rental exemptions, and they refer to units filed under a rental disclosure before Jan. 1, 2010, and those filed after Jan. 1, 2010.

For strata lots created with a valid, filed rental disclosure before Jan. 1, 2010, the owner developer was permitted to file the proper form with the superintendent of real estate. The form set out a declaration of the units they intended to rent for a prescribed period of time. That exemption, if enforceable, applies only to the first purchaser, and expires on the period of time published on the form or when the first purchaser sells the unit. Many of these forms filed before Jan. 1, 2010, identified the period of time as "indefinite" and a court decision in 2000 found that an "indefinite period" was unenforceable, and the first purchaser was not exempt; however, a recent court decision in December of 2009, of Spagnuolo v. Strata Plan BCS 879, has overturned the previous decision, and found that an "unlimited period" is a valid rental disclosure statement.

If you are purchasing a unit from a developer where the proper rental disclosure form was filed before Jan. 1, 2010, and it identifies the intent to rent the units for an "unlimited" period, then as the first purchaser, you are likely exempt from the rental bylaws. If you are buying from the first or a subsequent purchaser, that exemption no longer applies.

As of Jan. 1, 2010, the rules have changed on new developments, too.

The only way you can have some assurance that your strata lot will be exempt from strata bylaws is by purchasing a unit that falls under a rental disclosure exemption. Even strata buildings that average a high ratio of rentals with no bylaw restrictions often change over the years and adopt rental bylaws. Before you purchase, make sure you have a copy of the rental disclosure from the superintendent of real estate, and seek legal advice on the enforceability of the form. Not all forms grant exemptions or are enforceable, so never assume your unit will be exempt.

Tony Gioventu
is executive director of the Condominium Home Owners' Association. Send questions to him at tony@choa.bc.ca

  If you are looking to Buy or to Sell real estate in Vancouver area, give me a call. My consultations are FREE. The benefits to You, may be worth a lot of money.
Call Jeff Stark at 604-506-8481 or email me at jeff@jeffreystark.net

For some time now, and since the new Strata Property Act was brought in in July 2000, any Buyers  of Strata properties had to abide by the Bylaws regulating the rental of strata units. The rental Disclosure document, or form "J", filed by the Developer usually indicated the length of time that the units will be designated as rentals. This could be limited to several years or indefinite.

This meant that a buyer of a unit in a Strata, purchasing from the Developer, (first buyer), had a right to rent his unit for the period of time that the Form "J" specified, regardless of any changes in Bylaws limiting the rentals.

However, the second buyer, (buying as a resale) did not have that right. If restrictions to rentals had been voted in by the Strata Corporation, the second Buyer would have to abide by these  changes.

As of Jan 1, 2010, the Strata Property Act was changed, which will make it easier for the second buyer to be an investor, because the only governing document they will have to abide to is the Form "J" and it's limitations.

This explanation, courtesy of
Spagnuolo & Company Real Estate Lawyers

There has been a shortage of rental units for years in British Columbia. In order to address this, the Provincial Government recently passed legislation dealing with the rental provisions of the Strata Property Act ("SPA").

Under the old section 143 of the SPA, a rental restriction bylaw passed by a Strata Corporation did not apply to that strata lot until the strata lot was conveyed by the first owner after the developer or until the date that the rental period disclosed in the RDS expired, whichever was earlier. Essentially the first owner was always able to rent out the strata unit until the expiration of the rental period disclosed in the RDS, but not subsequent owners.

Pursuant to the amended Section 143 of the SPA, for a new RDS filed after December 31, 2009, a rental restriction bylaw will not apply to that strata lot until the date that the rental period disclosed in the RDS expires. This expiration is usually a long time away: perhaps 99 years or even indefinite.

Therefore, practically speaking, starting January 1, 2010, a new RDS will benefit every subsequent owner of that strata lot rather than just the first owner after the developer. All future owners will be able to rent the strata lot without being subject to any rental restriction bylaw for as long as the rental period disclosed in the new RDS allows them to.

This does not apply to strata buildings where the RDS was filed prior to Dec. 31, 2009.

 If you are looking to Buy or to Sell real estate in Vancouver area, give me a call. My consultations are FREE. The benefits to You, may be worth a lot of money.
Call Jeff Stark at 604-506-8481 or email me at jeff@jeffreystark.net

Condo Smarts
Vancouver Province February 14th, 2010

DearCondoSmarts: Ourstratahad a flood before the holidays where an overloaded washing machine went manic and soaked three units in our building. The council was contacted; it made arrangements for restoration and we had fans in hallways and holes cut in the walls for dryers. The owners were impressed that it happened so quickly.

As for the owner with the manic washing machine, she just received a bill for the deductible amount of $5,000. She was about to pay it, but noticed the bill was not from the insurance company, so called the insurer to see the insurance invoice. Council refused to file the claim and we'venowfoundoutthecouncilhired themselves to do the restoration work and bill it back to the owner.

There was no adjuster involved, and no report on the scope of the work done, or if even all the restoration was complete. One owner is still left with a wet, stained ceiling and no one coming to her aid. Is it a conflict of interest when council members pay themselves?

Dear Liz: Conflict of interest is a common bone of contention in strata corporations when the council executes decisions that result in personal benefits without the consent of the strata owners or exempting the benefited strata council member. The Strata Property Act says in part: "A council member who has a direct or indirect interest in a contract or transaction with the strata or decision that is a subject being addressed by the strata ... must 1) disclose fully and promptly to the council the nature and extent of the interest 2) abstain from voting on the transaction or matter, and 3) leave thecouncilmeetingwiththecontract, transaction or matter is discussed and while the remaining council votes on the contract, transaction or matter."

Here are the basics. Strata council must act in the best interest of the strata corporation; they cannot be compensatedfortheirdutiesascouncil members without the approval of the corporation, either in the budget, in the bylaws or by approved 3/4 vote at a general meeting; and a council member cannot vote on the awarding of a contract, transaction, or matter where he or she has some sort of direct or indirect personal or beneficial gain. Strata council can determine who it contracts with, and that could include a council member, but is that person qualified? Would it be a prudent decision to contract with a council member who may not be qualified, covered by WCB, insured or even competent to perform the work? Were the repairs and restoration completed properly?

In addition, the owner affected by the alleged deductible claim likely also now has a problem with her own insurance company's willingness to cover the deductible claim, as it is not a deductible, but an invoice from the strata corporation of a related repair. Council members who try to cut corners on the cost of claims or whoattempttocompensateeachother for any of the strata council duties without the strata approval are just opening the door for conflicts.

Tony Gioventu is executive-director of the Condominium Home Owners' Association. Send questions to him at tony@choa.bc.ca

If you are looking to Buy or to Sell real estate in Vancouver area, give me a call. My consultations are FREE. The benefits to You, may be worth a lot of money.
Call Jeff Stark at 604-506-8481 or email me at jeff@jeffreystark.net

Dear Condo Smarts: We have been viewing a number of condos in the past few weeks to purchase as our new home.

In the process of reading minutes we have found a number of conditions in each of the condos where the strata corporation could not provide us with satisfactory answers, so we did not pursue the sale.

We were faced with the refusal of the property manger and the strata corporation to disclose information on two issues.

The first was insurance claims and what parts of the building were damaged and restored in a major insurance claim, and the second was warranty claims.

Is this a normal practice and doesn't the strata have to disclose this information when someone requests it?

Dear MC: A prudent buyer will investigate building history, financial operations, financial reserves, maintenance schedules, the minutes of the meetings, and warranty and insurance claims that might affect your purchase.

As part of the records and documents in the Strata Act, the strata must retain correspondence sent and received by the strata corporation which could be warranty or insurance information, but that is only for a period of two years.

 They must also retain warranty documents and records, but if they do not include warranty or insurance claims and reports as part of the minutes of council meetings, there may not be a record of any such claims, other than the correspondence.

Unless you as the consumer specifically request copies of claims history for warranties and insurance claims, you would have no way of knowing that information.

If there was a related claim on the strata lot you are interested in, the vendor would also have a duty to disclose that information, but the conditions and claims of common property would have to be disclosed by the strata corporation, if requested.

Buyers should exercise caution when purchasing a unit if the strata or owner is unwilling to disclose warranty or insurance information.

If there is a history of insurance claims, you may be able to identify this through the deductible amounts shown on the strata insurance policy, but they only relate to history, not the current or future risk of the property.

For example, if the insurance deductible for water escape is $2,500, it is a good indication that there have been few if any water damage claims by the strata or owners, but if the deductible is $10,000, $25,000, or higher, it is obvious that a series of claims have resulted in a greater risk for the insurer and costs for the strata corporation.

Buying a condo today is also about protecting your future investment. Don't take anyone's word for anything. Review all the documentation available and confirm your requests in writing for additional information.

As published in Vancouver province may 17th, 2009, and written by Tony Gioventu

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

As published in the Sunday April25, 2009 edition of Vancouver Province

CONDO SMARTS

Dear Condo Smarts:

Thank you for your timely column on election signage a few weeks ago. Our strata is unclear on one issue. Can we create a bylaw or rule that prohibits the size of signs that are placed on a strata lot or common property?

- MM, Abbotsford

Dear MM: Our offices province-wide have been inundated with the same question.

Yes, section 228.1 of the Election Act permits a landlord, a person or a strata corporation to limit the size of a sign by setting reasonable conditions.

However, what a strata corporation has to remember is that to set conditions on a strata lot would require a duly ratified bylaw at a general meeting that has been registered in the Land Title Registry. A strata corporation may prohibit signs on common property, including common areas of a building, and that may be either through a proper bylaw amendment or through the creation of a Rule by council. The new Rule must be properly ratified by council and the strata must inform owners and tenants of any new rules as soon as feasible.

A strata corporation in White Rock has a bylaw that limits the placement of election signage to only the display from strata lots, and to signage no larger than one metre by one metre, which is still significant. In a bare-land strata in most circumstances it will require a bylaw to limit or restrict signage. Most signs are displayed on the property adjacent to the buildings on a bareland strata, which is almost always part of the strata lot.

Don't make the mistake in assuming the Act gives you the authority to limit or restrict signs. The Strata Property Act is silent on election signage, and only gives you the ability to create the appropriate bylaws or rules permitted by the Election Act.

Comments by;
Tony Gioventu is executive director of Condominium Home Owners' Association. tony@choa.bc.ca.

  If you are looking to Buy or to Sell real estate in Vancouver area, give me a call. My consultations are FREE. The benefits to You, may be worth a lot of money.
Call Jeff Stark at 604-506-8481 or email me at jeff@jeffreystark.net