Frequently Asked Questions | Undivided Interest | Leaky Condo Repairs | Strata Questions
Frequently Asked Questions
* Information for Non-Resident Buyers and Sellers of Real Estate
* Property Transfer Tax
* Title Insurance - An Explanation
* Why a Lawyer and not a Notary?
* Income Tax - Principal Resdience & Vacation Rental
* HST to GST: Transition Rules for Real Property
* Information on Age Bylaws
* Information on Pet Bylaws
* Information on Rental Bylaws
Should you have any questions, please contact
The Spagnuolo Group of Real Estate Law Firms
Greater Vancouver and Central Okanagan
Direct Phone: 604-777-7406
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 :
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).
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.
Amendments to the Strata Property Act Concerning Rentals Announcement:
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 by law 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.
Here are some questions you might have:
What is a "RDS"?
"RDS" is the Rental Disclosure Statement that is filed as part of the Disclosure Statement. Developers are required to provide a Disclosure Statement every time they sell 5 or more units, and a Rental Disclosure Statement is part of the Disclosure Statement.
How does this affect a buyer acquiring property already tenanted from original owner - It does not. The recent changes to the Strata Property Act only apply to Disclosure Statements filed after Dec. 31, 2009. There is no change for units in which the Disclosure Statement was filed prior to that time.
Does this mean that any new strata filed after January 1st of 2010, does not have the power to enforce rental restrictions? This is correct only if the Rental Disclosure Statement reserves the right to rent for a period of time (which most do). Developers may choose to file a RDS that prohibits rentals and in such a case, rentals shall not be allowed.
Does this apply only to No Rental restrictions or what about where strata set up a maximum number of units to be rented? As stated above, the changes have nothing to do with existing units, so current No Rental Restrictions are in effect and remain so.
Most every form 'B' says nothing about a date? It is the Rental Disclosure Statement that is relevant, not the Form B that is issued by the property management company during the purchase of the strata.
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.
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