Frequently Asked Questions | Undivided Interest | Leaky Condo Repairs | Strata Questions

Legally Speaking

Frequently Asked Questions

* Information for Non-Resident Buyers and Sellers of Real Estate

* Title Insurance - An Explanation

* Why a Lawyer and not a Notary?

* Income Tax - Principal Resdience & Vacation Rental

* Information on Goods and Services Tax for Residential Real Estate

GST Information on New Housing Rental Rebate:

Fact: A client enters a contract for a presale condo. The purchase price on the contract with the developer is $349,000 plus GST. By the time the property is ready, the fair market value is $452,000. The client pays the full GST on $349,000 at the time of Completion to the developer. The client rents the property for one year, and applies for the GST New Housing Rental Rebate.

Issue: Will the client qualify for the 36% Rebate on GST paid at the time of Completion?

Short Answer: No

Reason: The GST Rebate entitlement is based on the Fair Market Value of the property at the time of completion. In this case, because the Fair Market Value is over $450,000, no rebate is allowed. Assuming all other criteria is met, a 36% Rebate for GST paid at completion is allowed for properties valued under $350,000 at the time of completion. A partial rebate is allowed for properties between $350,000 and $450,000, no rebate is allowed for properties valued at more than $450,000 at the time of Completion. With clients purchasing pre-sales with the hope that the value will increase before Completion, this may be an issue that they had not anticipated.

The lawyer called Revenue Canada about this issue and was directed to the Rental Rebate Form. If you look at Section E Part 1, lines D & E, you will see that you must report both the purchase price paid, and the fair market value of the property. This is specifically so that the GST folks can identify properties that have gone up in value, and may not qualify for all or part of the rebate. She asked how a client would know the fair market value at the time of completion, and was told that Revenue Canada expects the clients to make their best efforts to get an estimate of this figure. They said it is not necessary to order an appraisal, but that they should "maybe ask their realtor!"

* RRSP

Strata Bylaws:

* Information on Age Bylaws

* Information on Pet Bylaws

* Information on Rental Bylaws

Should you have any questions, please contact Spagnuolo & Company Real Estate Lawyers.
Port Coquitlam (Head Office)
560 - 2755 Lougheed Highway
Port Coquitlam, B.C. V3B 5Y9

Undivided Interest

Straight facts for B.C.'s Consumers
Buying An Undivided Interest

Consumers considering investing in residential properties that have not been stratified under the Condominium Act should get all the facts before they buy. Because the selling of undivided interest in rental properties is n new kind of transaction, it could be confused with condominium sales.

Consumers should be aware that:

Purchasers of undivided interests do not actually own a suite. Instead they own a share of the property as a whole.
Owners of undivided interests in property may not have the same rights and remedies available to condominium purchasers and owners through the Real Estate Act and the Condominium Act.
Owners of undivided interests who have less than 50 per cent ownership may not be considered landlords under the Residential Tenancy Act and may not be legally entitled to evict the occupant in order to use the unit themselves.
Owners of undivided interests may be liable should other owners default on the mortgage.
Co-owner agreements are contractual in nature therefore disputes may have to be resolved through civil litigation.
Consumers need to know how management of the property will take place in the absence of a strata council.
Potential purchasers of undivided Interests should assess the maintenance fees, how maintenance will be authorized and what future obligations could develop.
Properties sold as undivided Interests may not be required to receive municipal approval and may not meet the same stratified under the Condominium Act.
Sales may be on an "as is, where is basis". There may be no possibility of future action against the owner/developer if the building is unsound in any way.
If the contract contains a reversionary clause or states that the undivided interest or user agreement can be terminated, it could mean that if the contract is violated, even on a very minor point, the share of property reverts back to the seller.
Potential purchasers should always obtain advice from an independent legal counsel and have their own lawyer or notary perform their real estate transfer.

For more information on the following subjects contact:

Condominium Act and Real Estate Act:
Real Estate Department
Financial Institutions Commission
Ministry of Finance and Corporate Relation : (604) 660-2947

New Licensing For Leaky Condo Repairs

In 1999 the B.C. government implemented the Homeowner Protection Act, creating the Homeowner Protection Office, and requiring compulsory licensing for builders and mandatory warranty coverage on new homes.

Under new regulations that came into force on October 1,2000, repair contractors who arrange, manage or perform building envelope repairs (mainly leaky condo repairs) must be licensed by the Homeowner Protection Office and must offer a warranty on the repairs from a third-party insurance company. A municipality will not issue a building permit for the repair job unless the contractor proves that it is licensed and that the proposed repairs are covered by a third-party warranty. (In areas where a building permit is not required the contractor must still meet these requirements).

The minimum warranty coverage is two years on labour and materials. If 60% or more of any wall is replaced, an additional 5-year warranty on water penetration is required.

These new regulation do not apply to buildings with less than three dwelling units, rental buildings, hotels and motels, dormitories, care facilities, buildings covered by warranty insurance, and buildings with repair costs less than the greater of $10,000 or $2,000 per unit in the building. As well, thee regulations do not apply to repairs carried out by the original builder at no charge to the owner(s) or when there is a cost-sharing agreement between the builder and the owner(s).

Strata Questions

Can a strata corporation prohibit rentals?
Under the former Condominium Act, a strata corporation could pass a bylaw to "limit" the number of strata lots that may be rented. Various court decisions held that this did not permit a strata corporation to "prohibit" rentals - in other words, the bylaws had to permit at least one rental. Under the new Strata Property Act, a strata corporation may prohibit the rental of strata lots. However, any restriction will not apply to family members (the owner's spouse, or a parent or child of the owner or of the owner's spouse).

May a strata corporation screen tenants?
Under the new Act, a strata corporation may control the conduct, but not the choice, of tenants. Strata corporations may no longer screen tenants, establish screening criteria, require the approval of tenants or require terms to be inserted in tenancy agreements.

Can an owner apply for an exemption from a rental restriction bylaw?
Yes, on the grounds that it causes hardship to the owner. The strata corporation cannot unreasonably refuse to grant an exemption. In a recent case, the court stated that economic hardship, combined with a "leaky condo" problem, might be sufficient grounds for an exemption.

What about existing rentals?
If a tenant occupies a strata lot when a rental restriction bylaw is passed, the bylaw will not apply to the strata lot until one year after that tenant moves out. If the strata lot is not rented when the bylaw is passed, the bylaw applies one year after it is passed. If a developer reserved the right to rent a strata lot for a period of time, the rental restriction does not apply until the earlier of the sale of the strata lot by the first purchaser or the expiry of the developer's rental reservation period.

Are there any new requirements for landlords?
Yes, but the bylaw will not apply to a pet living with an owner or tenant when the bylaw is passed.

Does the Standard Bylaw allow pets?
Yes, but the Standard Bylaws permit 1 dog or 1 cat, 2 caged birds, a reasonable number of fish and a reasonable number of small caged mammals.

Can bylaws restrict the age of strata lot owners?
No, but the bylaws may restrict the age of occupants of strata lots. An age restriction bylaw will not apply to persons occupying a strata lot when the bylaw is passed.

Immigration and Citizenship Information

If you are interested in immigrating to Vancouver or you have any citizenship concerns, please contact Embarkation Law Group and they will be able to offer you valuable information.