Form F

The Strata Property Act entitles a purchaser, or a person authorized by a purchaser, to obtain a Certificate of Payment

(Form F), which must be provided if:

1. the owner does not owe money to the strata corporation; or
2. the owner does owe money, but
   • (a) the money claimed by the strata corporation has been paid into court, or to the strata corporation in trust, or
   • (b) arrangements satisfactory to the strata corporation have been made to pay the money owing.

The Form F is typically requested from the strata corporation, or the brokerage providing strata management services to the strata corporation, by a lawyer or notary public acting on behalf of either the buyer or seller with respect to the conveyance.

A Form F will not be provided if the owner owes money and has not paid it into court/trust or has not made arrangements satisfactory to the strata corporation to pay the money owing. It would be beneficial for a real estate professional to determine if there is money owing by the seller to the strata corporation as early as possible to avoid the Form F being withheld.

Additional Strata Corporation Documents

It has long been recognized that the information on the Form B is far from sufficient for a buyer. The Form B does not attach minutes, financial statements, bylaws and other documents that a buyer wishes to review. However, the only documents that a buyer is entitled to obtain are the Form B and Form F. As a result, the right of an owner, the seller, to obtain documents from a strata corporation has often been used to obtain the documents such as minutes and financial statements for the benefit of the buyer.

The Strata Property Act requires strata corporations to maintain and retain certain documents including minutes of annual and special general meeting and council meetings, a list of council members, books of account showing money received and spent, budgets and financial statements, correspondence received and sent, written contracts including insurance policies, warranties, the registered strata plan, court and arbitrator’s decisions, engineering and depreciation reports. Many of these documents will be relevant to a prospective purchaser. The length of time that the various documents must be retained is set out in the Strata Property Regulation.

The Strata Property Act permits owners, certain tenants, or any person authorized in writing by an owner, access to all of the records and documents that the strata corporation must prepare and keep under the Strata Property Act that relate to the period during which the owner or tenant was an owner or tenant.

The common practice for listing real estate professionals to obtain strata corporation documents that are available only to an owner is to be authorized by the owner in order to obtain them from the strata corporation.

BCFSA has provided real estate professionals with an authorization form entitled “Authorization to Agent to Obtain Strata Documentation” to be signed by an owner that a real estate professional may present to the strata corporation as evidence of their authorization to obtain the strata corporation’s documents. Additionally, clause 1(B)(i) of the Multiple Listing Contract also contains authority for the listing real estate professional to obtain information about the listed property from other sources, including a strata corporation. A buyer can then request that copies of the documents be provided as a condition of the contract of purchase and sale. To enable buyers to receive and review the strata corporation documents, selling real estate professionals generally include a subject clause in the contract of purchase and sale requiring the production of various strata documents such as the Form B, current bylaws, registered strata plan, minutes of general and strata council meetings, financial statements, and engineering reports, if any. The buyer can receive only those documents that an owner is entitled to receive. Unless a buyer is specifically authorized by the owner to obtain documents from the strata corporation, a buyer cannot request these documents other than a Form B or Form F directly.

The selling real estate professional should ensure that all documents that were requested have been made available and that, if some of the documents are not included, an explanation that is acceptable to the buyer has been provided as to why a particular document has not been supplied.

Of particular concern will be the failure to produce engineering or depreciation reports that the strata corporation has obtained. In some cases, a strata council may be unwilling to release a depreciation or an engineering report because it has not had an opportunity to fully consider the report or alternatively because it believes a second opinion should be obtained. Whether such reasons are valid and properly justify the withholding of the report will not be known. In practical terms however, if a strata council is not willing to release the report, the only means for a buyer to obtain the depreciation report or an owner to obtain a depreciation or engineering report is to apply to the Court for an order that the report be released and provided to the buyer or owner. In the case of a buyer seeking this information, such a solution is impractical and unlikely.

Buyer’s agents who are advised that the strata corporation’s reports will not be provided, should warn their buyers in writing of the risks of proceeding with the purchase of a strata lot when such information is not available and should encourage the buyer to obtain legal advice.

(i) Documents to Request and their Significance

Real estate professionals should obtain a copy of the following documents, in addition to the Form B that is discussed above, at the time of listing a strata lot. This can be achieved by obtaining written authority from the seller as discussed above.

(This is an opportunity for real estate professionals to negotiate who will be responsible for the cost of obtaining these documents.)

• minutes — 24 months’ minimum — strata council meetings, annual general meeting(s), special general meeting(s), and meetings of the executive or the members of any section to which the strata lot belongs. Request written verification from the strata property manager, the strata council or, if a section exists, the executive of the section, that the information received represents complete copies of minutes requested;
• current bylaws of the strata corporation and any section to which the strata lot belongs;
• current financial statements of the strata corporation and any section to which the strata lot belongs;
• the registered strata plan, any amendments, and any resolutions dealing with changes to common property. It is recommended that the listing real estate professional obtain the strata plan from the Land Title Office prior to listing the strata lot. The strata plan is necessary to identify the features associated with the strata lot, such as balconies and decks, and their designation. The strata plan also indicates the area of the strata lot and the designation of parking and storage. The strata plan can then be provided to the buyer with the other documents requested. If the real estate professional choses to obtain a copy of the strata plan from the strata corporation, the real estate professional should ensure that the strata plan obtained is a copy of the registered strata plan and not a copy of the unregistered strata plan that was included in the developer’s disclosure statement;
• information about any additional fees charged by the strata corporation, over and above the monthly strata fee, for parking, storage or other features;
• information regarding any building warranty that may be applicable;
• municipal occupancy permits and/or final inspection permit;
• correspondence to owners from the strata council over the last 12 months;
• copy of the strata corporation’s insurance cover note. The insurance cover note should be used to identify the insurance deductible that the strata corporation must pay in the event of various losses caused by events such as fire or water escape. If a deductible is high, particularly for water escape, a buyer should be encouraged to make further inquiries of the seller as to the number of claims that have been made and the reason for the claims;
• building envelope inspection reports, engineering reports or remediation reports, if any; and
• legal opinions, if any.

Real estate professionals should use a checklist coversheet, in duplicate, when providing a copy of the above-noted documents to interested buyers or their agents. The checklist coversheet should include the following information:

• a description of each document included (e.g., minutes of the meetings of the strata council with meeting dates noted);
• the dates the documents were received by the listing agent (to confirm the point in time at which the information is current);
• the source of each document (e.g., the strata corporation, its strata manager, the Land Title Office, etc.);
• a statement that if the person to whom the documents are provided is concerned about the currency of the information provided, or any matters contained within the information provided, they should seek independent verification and/or advice.

Receipt of Strata Corporation Documentation

Sample Receipt of Strata Corporation Documentation checklist coversheet.

Download PDF

This sample checklist coversheet, called the “Receipt of Strata Corporation Documentation Form” can be downloaded. With this checklist coversheet in duplicate, real estate professionals should have the person receiving the information acknowledge receipt in writing on the top copy, including the date the information is received. The top copy can then be retained by the real estate professional as a record of what information was provided to whom on what date. The second copy should be provided, along with the documents, to the person who has requested the information.

(ii) Distribution of Strata Documents

As set out above, generally, an owner authorizes the listing real estate professional to obtain strata corporation documents either by using the authorization form provided by BCFSA entitled Authorization To Real estate professional to Obtain Strata Documentation or by relying on clause 1(B)(i) of the Multiple Listing Contract which contains authority for the listing real estate professional to obtain information about the listed property from other sources, including a strata corporation.

Once a real estate professional has obtained the documents from the strata corporation, how a real estate professional uses or distributes the documents is determined by the instructions provided to the real estate professional by the owner of the strata lot. BCFSA has also provided real estate professionals with a form entitled Authorization to Real estate professional to Deliver Strata Documents. The form sets out the owner’s instructions to the real estate professional regarding the use and distribution of the documents obtained from a strata corporation. The authorization provides the real estate professional with the permission to deliver the strata documents and records to “a prospective buyer or buyer’s agent.” BCFSA has interpreted the phrase “a prospective buyer or buyer’s agent” to mean purchasers or their agents who are specifically interested in purchasing the seller’s strata lot. The phrase cannot be interpreted to mean the “world at large” or, put another way, anyone who is surfing the internet and clicks on the real estate professional’s website.

The Multiple Listing Contract contains an authorization in clause 11(A) in which the seller agrees that the documents obtained by the listing real estate professional can be disclosed to, among others, persons interested in the property, including prospective buyers and their agents. The authorization contained in the Multiple Listing Contract is significantly broader than the authorization contained in BCFSA’s authorization form.

The authorization being relied on will determine how the real estate professional may distribute the strata corporation documents.

If a real estate professional wishes to post the documents on a website in order to make the documents available to any person who may wish to view them, the real estate professional should ensure that they have the appropriate authorization, such as that contained in clause 11(A) of the Multiple Listing Contract, from the owner. A real estate professional who makes strata corporation minutes and documents available on a website based only on the authorization form available from BCFSA could be found to have failed to follow their client’s instructions if their client complains to BCFSA about too broad a circulation of the documents.

The further question that arises is whether an owner is entitled to authorize a real estate professional to make strata documents available to the public at large. Some real estate professionals have argued that the Strata Property Act does not contain any restrictions on the use of the documents once they have been provided by the strata corporation. This view is correct. The Strata Property Act does not contain restrictions on how the documents can be used. However, the strata corporation may choose to impose such restrictions.

Real estate professionals have also suggested that the documents obtained from the strata corporation belong to the owner and the owner is entitled to authorize their release. In fact, the documents, such as minutes, budgets, financial statements, engineering reports and legal opinions, belong to the strata corporation, not an owner. The strata corporation may wish to restrict how its documents could be used and disseminated.

For this reason, a real estate professional who wishes to rely on the authorization to distribute documents as set out in the Multiple Listing Contract should point out clause 11(A) to the owner and advise how the real estate professional intends to distribute the information. Before agreeing to such distribution, the owner or, if directed to do so by the owner, the real estate professional should confirm that the strata corporation has not imposed any restrictions on the manner in which strata documents can be distributed.

Real estate professionals should recognize that simply being provided with strata corporation documents does not entitle the real estate professional to distribute the documents in a manner other than as directed by their client.

(iii) Time to Obtain Strata Documents and the Fees Charged

If documents are requested to be provided in accordance with the timeframe set by the Strata Property Act, the Regulation establishes the maximum amount that can be charged.

Sections 36(3) and 59(1) of the Strata Property Act and section 25 of the Interpretation Act effectively give the strata corporation eight days, following receipt of a request, to deliver a Form B, the bylaws and rules and up to 15 days following receipt of a request to provide copies of the other records maintained by the strata corporation. Under the Strata Property Act, unless a request for documents is personally presented to a strata council member, the strata corporation is deemed not to have received the request for 4 days. Therefore the 8 and 15 day periods do not start until 4 days after the request was faxed, mailed or emailed to the strata corporation or strata manager.

The Regulation sets the maximum fee that a strata corporation may charge for providing a copy of a record or document and the fees for providing a Form B and a Form F.

The maximum fee that a strata corporation may charge for providing a copy of a record or document prescribed under section 35 of the Strata Property Act is 25¢ per page. The maximum fee for a Form B including the required attachments is $35, plus the cost of photocopying, or other means of reproduction, at no more than 25¢ per page and the maximum fee for a Form F is $15. (These rates are subject to change by regulation.) The fees are applicable if the documents are requested to be provided in the time frames as set out above. The Regulation prohibits any charge to an owner, or his or her authorized delegate, for inspecting the strata corporation’s records.

While the Strata Property Act and the Regulation establish both maximum time frames and maximum fees to be charged for providing copies of a strata corporation’s records, the legislation is silent on whether additional fees may be charged for providing these records in a shorter time period than the maximum allowed.

When strata corporations, or strata managers acting on their behalf, are requested to provide documents sooner than stipulated by the legislation, real estate professionals should be aware that some may charge additional fees.

When drafting offers that include obtaining documents for review by a prospective buyer, real estate professionals should recommend a subject removal date that allows enough time for the strata corporation or strata manager to respond to a request and for buyers to review those documents.

(iv) Seller’s Liability

Often buyers will request copies of reports not knowing whether the report exists. If no report is then provided the buyer believes that no report was ever commissioned or obtained.

It is important for a seller to recognize that the request for documentation in the contract of purchase and sale obligates the seller to produce the documents requested. A request for all reports is simply that, all reports. If the seller is aware that certain reports exist, but does not ensure that they are provided to the buyer as part of the buyer’s request for documentation, the seller may be liable to the buyer for failing to provide the requested documents. Notwithstanding that the documents are generally provided by the strata corporation, the seller and seller’s agent should ensure that the documents provided to the buyer fully satisfy the buyer’s request.

It is obvious that a seller cannot be held liable for the reports if the strata council has failed to advise owners that a report has been commissioned or received. In those cases, the strata council may have failed in its duties to act honestly, in good faith and in the best interests of the strata corporation, and may be liable to the owners including the buyer.

(v) Role of the Strata Manager

Listing and selling agents sometimes seek information about a strata lot or a strata development from a strata manager. Real estate professionals should keep in mind that a strata manager is not the agent of the seller but is an agent of the strata corporation. The strata manager’s duties are set out in the contract between the brokerage and the strata corporation and, generally, include carrying out many of the strata corporation’s duties such as maintaining the books and records and managing the day to day activities of the strata corporation.

When documents are requested from the strata corporation they are often requested from the strata manager. It is important for real estate professionals to appreciate that the strata manager is merely stepping into the shoes of the strata corporation and has no separate duties to make disclosure other than assisting the strata corporation in fulfilling its obligations. Real estate professionals should appreciate that in carrying out their duties to the strata corporation, a strata manager may only act within the scope of authority as set out in the contract between the strata corporation and the brokerage providing strata management services. In other words, when obtaining documents from the strata corporation, the strata corporation must comply with the Strata Property Act and the strata manager has no ability to act in a manner other than as permitted by the StrataProperty Act and as directed by the strata council. The strata manager, for example, cannot release documents such as meeting minutes or financial statements to a party other than an owner, certain tenants or person authorized in writing by an owner or certain tenants. Additionally, the strata manager cannot provide his or her opinion on the likelihood of a future special levy or the need for repairs. Such information is only available to owners and prospective buyers through the minutes and other records of the strata corporation. If, for example, a buyer wishes to determine what the bylaws contain, it is appropriate to obtain and review a copy of the bylaws. Asking the strata manager for information about what is contained in the bylaws is inappropriate and may result in misinformation to a buyer if the strata manager provides information that is incorrect. Additionally, asking the strata manager for his or her opinion on the state of repair of the building, the competency of its strata council, or any other such matter is also inappropriate.

BCFSA has interpreted the phrase “a prospective buyer or buyer’s agent” to mean purchasers or their agents who are specifically interested in purchasing the seller’s strata lot. The phrase cannot be interpreted to mean the “world at large” or, put another way, anyone who is surfing the internet and clicks on the real estate professional’s website.

The Multiple Listing Contract contains an authorization in clause 11(A) in which the seller agrees that the documents obtained by the listing real estate professional can be disclosed to, among others, persons interested in the property, including prospective buyers and their agents. The authorization contained in the Multiple Listing Contract is significantly broader than the authorization contained in BCFSA’s authorization form.

The authorization being relied on will determine how the real estate professional may distribute the strata corporation documents.

If a real estate professional wishes to post the documents on a website in order to make the documents available to any person who may wish to view them, the real estate professional should ensure that they have the appropriate authorization, such as that contained in clause 11(A) of the Multiple Listing Contract, from the owner. A real estate professional who makes strata corporation minutes and documents available on a website based only on the authorization form available from BCFSA could be found to have failed to follow their client’s instructions if their client complains to BCFSA about too broad a circulation of the documents.

The further question that arises is whether an owner is entitled to authorize a real estate professional to make strata documents available to the public at large. Some real estate professionals have argued that the Strata Property Act does not contain any restrictions on the use of the documents once they have been provided by the strata corporation. This view is correct. The Strata Property Act does not contain restrictions on how the documents can be used. However, the strata corporation may choose to impose such restrictions.

Real estate professionals have also suggested that the documents obtained from the strata corporation belong to the owner and the owner is entitled to authorize their release. In fact, the documents, such as minutes, budgets, financial statements, engineering reports and legal opinions, belong to the strata corporation, not an owner. The strata corporation may wish to restrict how its documents could be used and disseminated.

For this reason, a real estate professional who wishes to rely on the authorization to distribute documents as set out in the Multiple Listing Contract should point out clause 11(A) to the owner and advise how the real estate professional intends to distribute the information. Before agreeing to such distribution, the owner or, if directed to do so by the owner, the real estate professional should confirm that the strata corporation has not imposed any restrictions on the manner in which strata documents can be distributed.

Real estate professionals should recognize that simply being provided with strata corporation documents does not entitle the real estate professional to distribute the documents in a manner other than as directed by their client.

Land Title Documents

Title Search

A title is issued for every strata lot created by a strata plan. As with any other property, it is essential that a search be conducted to ascertain who owns the property, the status of the property (i.e., fee simple or leasehold) and the nature of encumbrances against the property.

Under the Strata Property Act, an owner exercises many important rights, including access to a strata corporation’s records. In the case of a freehold strata lot, section 1 of the Strata Property Act defines the term ‘‘owner’’ as a registered owner. For example, if a husband and wife buy a freehold strata lot, but only the wife is registered on title as the fee simple owner, the wife is the only person who is an owner for the purposes of the Strata Property Act. In the case of a leasehold strata plan, the Strata Property Act defines the word ‘‘owner’’ to mean the leasehold tenant. Note that in a leasehold strata plan, a leasehold tenant is not the same as a tenant under the Residential Tenancy Act, S.B.C. 2002, c.78. If there is a registered agreement for sale of the strata lot, an owner is the registered holder of the last registered agreement for sale. If there is a registered life estate, an owner is the tenant for life.

Strata Plan and Schedules

The Strata Property Act requires a strata corporation to keep permanently, among other documents, copies of the registered strata plan and any registered amendments. Even though a strata corporation must keep on hand its own copy of the registered strata plan as amended, a real estate professional should not rely on the strata corporation’s copy of the strata plan. A real estate professional should look to the Land Title Office for the most reliable and up to date copies of the registered strata plan and any amendments to it. These are important documents to review, regardless whether they are provided by the strata corporation, the sellers, or are obtained from the Land Title Office. If a listing brokerage does not obtain a copy of the entire registered strata plan and any amendments, at a minimum, the listing brokerage should obtain a copy of those portions of the strata plan that show:

• the page showing the registered strata plan number (or phase) of the strata corporation;
• the overall site plan showing the location of the buildings, etc.;
• the portion of the site plan showing the particular strata lot and any designation of limited common property in respect of that strata lot;
• information respecting parking, storage and other amenities that are for the use of the particular strata lot;

Strata plans filed prior to July 1, 2000 contain schedules setting out the unit entitlement of each strata lot, the voting schedule, and the schedule of interest on destruction. After July 1, 2000 the schedule of unit entitlement and the voting schedule are filed separately and must be specifically requested. For strata plans filed after July 1, 2000, there is no longer a schedule of interest on destruction. Following is an explanation of each schedule and its significance to a buyer.

(i) Schedule of Unit Entitlement

A strata lot’s unit entitlement relative to the total unit entitlement for all strata lots determines the proportion of common expenses that a strata lot must pay. For residential strata lots, the Strata Property Act requires the unit entitlement to be either the habitable area of the strata lot, a whole number that is the same for all strata lots, or a number approved by the Superintendent of Real Estate. For non-residential strata lots, the unit entitlement is either the total area in square meters of the strata lot, a whole number that is the same for all strata lots or a number that is approved by the Superintendent of Real Estate. Although most buyers are only interested in the strata lot’s monthly strata fees, a buyer’s agent should point out the unit entitlement for the strata lot in question so that the buyer understands the basis on which the strata fees are determined. This is particularly significant for larger strata lots. Buyers should be advised that the unit entitlement will determine not only monthly strata fees but also the strata lot’s contribution to any special levies that the strata corporation approves.

(ii) Schedule of Voting

All residential strata lots have one vote. Thus, for a development that is entirely residential, a voting schedule included on a strata plan may be blank and a voting schedule will not be filed for strata plans filed after July 1, 2000.

For non-residential strata developments or developments containing both residential and non-residential strata lots a voting schedule may be filed in the Land Title Office. In a non-residential development, each strata lot’s vote is determined by the unit entitlement of the strata lot divided by the total unit entitlement of all strata lots. In a development containing both residential and non-residential strata lots, each residential strata lot will have one vote and each non-residential strata lot will have a vote based on the unit entitlement of the strata lot relative to the average unit entitlement of all residential strata lots. For example, if the average unit entitlement of the residential strata lots is 100, a non-residential strata lot with a unit entitlement of 50 will have a vote of .5 and a non-residential strata lot with a unit entitlement of 400 will have four votes. In such cases it is possible for the non-residential strata lots to have a fractional vote or more than one vote. In developments that are non-residential or developments that contain both residential and non-residential strata lots, a buyer`s agent should explain the significance of the voting schedule to the buyer.

(iii) Schedule of Interest on Destruction

For strata developments created prior to July 1, 2000, the strata plan will contain a Schedule of Interest On Destruction. This schedule is to be used to determine an owner’s interest in the land and personal property of the strata corporation when the strata corporation is wound up. The Strata Property Act no longer requires a Schedule of Interest On Destruction. Rather, at the time the strata corporation is wound up, the current assessed or appraised value is to be used.

Other Land Title Documents

In addition to the strata plan, the Land Title Office maintains a Common Property Record and a Strata Plan General Index. These documents must be obtained separately from the strata plan and contain the following information.

(i) Strata Plan General Index

The strata plan general index lists all documents filed in respect of the strata corporation, the date the document was filed and the document filing number in order to permit retrieval of a particular document from the land title filing system. The index lists all bylaw amendments, and, for strata plans filed after July 1, 2000, the voting schedule for developments that contain non-residential strata lots or a combination of residential and non-residential strata lots (if one was filed) and the schedule of unit entitlement. Additionally, any amendments to the voting schedule or schedule of unit entitlement will also be listed on the strata plan general index.

(ii) Common Property Record

The common property record lists all of the charges and other interests that separately charge the common property including any filings that create limited common property that was created by means of a 3/4 vote and the filing of a sketch plan.

Restrictions on Use – Bylaws and Rules

General

In addition to the need to comply with the Strata Property Act, every owner must also comply with the strata corporation’s bylaws and rules.

Bylaws

Every strata corporation must have bylaws. The bylaws serve as the constitution of the strata corporation. The bylaws may provide for the control, management, maintenance, use and enjoyment of strata lots or common property and the administration of the strata corporation. The ability of a strata corporation to regulate the conduct of owners and their ability to use a strata lot is very broad.

When a strata plan is deposited at the Land Title Office, the strata corporation acquires, by default, the Schedule of Standard Bylaws. All strata corporations that were created prior to the coming into force of the Strata Property Act that were relying on the Part 5 bylaws of the Condominium Act also acquired the Schedule of Standard Bylaws. Regulation 17.11 of the Strata Property Regulation provided that the Standard Bylaws are deemed to be the bylaws for all strata corporations created under the Condominium Act except to the extent that conflicting bylaws are filed in the land title office.

The developer, when depositing the strata plan, or later, the eligible voters of the strata corporation in a general meeting, may amend or repeal the Standard Bylaws and may create new bylaws. An amendment to the bylaws is not enforceable until it is filed at the Land Title Office. Bylaw amendments filed at the Land Title Office can subsequently be amended. This means that the bylaws of a strata corporation may consist of the Schedule of Standard Bylaws, or the Schedule of Standard bylaws plus any amendments filed in the Land Title Office, or only the amendments as filed in the Land Title Office, if the Standard Bylaws have been amended or disapplied.

Bylaw amendments must be approved by the owners at a general meeting by 3/4 vote.

It is useful to know that only bylaw amendments need be filed at the Land Title Office so in order to determine the current bylaws of the strata corporation it may be necessary to obtain all filed bylaw amendments, as well as the Schedule of Standard Bylaws. Also, sections may have their own bylaws that are separate from the strata corporation bylaws.

Rules

Rules are optional. The term rules replaces the phrase rules and regulations used under the former Condominium Act. A rule may only govern the use, safety and condition of common property and common assets. If a rule conflicts with a bylaw, the bylaw prevails.

When a strata council creates a rule, the rule is automatically subject to a sunset provision that may limit its life span. Although the rule comes into force immediately, the rule ceases to have effect at the first annual general meeting held after council made the rule unless the eligible voters at a general meeting ratify the rule by a majority vote. Once ratified, the rule remains in force until it is later repealed or altered.

Bylaws vs. Rules

Bylaws are different from rules in three important respects:

Source — Bylaws must be approved by a ¾ vote of the owners at a duly convened annual or special general meeting; rules are created by the strata council and take effect immediately upon being approved by the strata council. Rules must subsequently be ratified by the owners by means of a majority vote at the next general meeting after the rules were created.

Scope — A strata corporation at an annual or special general meeting is empowered to make bylaws covering not only the common property, but also the use and enjoyment of strata lots. By contrast, a strata council can only make rules affecting the use, safety and condition of common property and common assets.

Formality — Before it can be effective, a bylaw must be filed in the Land Title Office. Rules, however, do not need to be registered in the Land Title Office in order to be effective. Rules must, however, be in writing and must be capable of being photocopied.

Enforceability

Bylaws and rules are not enforceable to the extent that they contravene the Strata Property Act, the Regulation, the Human Rights Code, or any other law. The Strata Property Act limits the enforceability of some bylaws and rules made before it came into force. Bylaws and rules of existing strata corporations ceased to have effect January 1, 2002 to the extent they conflicted with the Strata Property Act or the Regulation. Although this may appear confusing, it is important for real estate professionals to understand that, notwithstanding an owner’s or real estate professional’s view, or legal opinion that a bylaw may be unenforceable for any of the reasons noted above, only a judge, an arbitrator or an adjudicator can determine that a bylaw is unenforceable. Real estate professionals should therefore refrain from expressing any opinion on the enforceability of any bylaw or rule. Instead, real estate professionals should explain to their clients that a question about the enforceability of a bylaw or rule is a legal matter about which the clients should seek advice from their lawyer.

A common misconception is that a developer or a strata council can waive the application of a bylaw or rule. Buyers will therefore attempt to obtain the permission of the developer or strata council which authorizes a breach of a bylaw. Some bylaws specifically require that the strata council grant permission before an event may occur, such as an alteration to common property. However, where a bylaw prohibits or restricts an activity, such as prohibiting pets, children, hardwood floors or hot tubs, etc., neither the strata council nor the developer has the authority to grant permission for an owner to act in contravention of the bylaw subject to any duty to accommodate an owner as required by the Human Rights Code. In certain circumstances it may be necessary for buyers or owners to seek the relaxation of a bylaw or rule if the bylaw or rule results in discrimination contrary to the Human Rights Code. Buyers seeking such an accommodation may wish to obtain legal advice.

Disclosure of Restrictions on Use

BCFSA has disciplined listing and selling real estate professionals for failing to properly check the bylaws for restrictions. If a restriction exists in the bylaws, selling real estate professionals must inform a buyer before he or she buys the strata lot. For example, typical restrictions include: a bylaw that prevents rentals; an age restriction; a prohibition against pets; a limitation on the size of vehicles; or on the number of occupants per strata lot.

Real estate professionals should never assume anything about issues that could affect buyers. For instance, in many strata plans deposited before July 1, 2000, when the Strata Property Act came into force, real estate professionals will find a declaration on or about page 2 of the strata plan, to the effect that the plan is, “entirely for residential use.” In the 2002 case of Winchester Resorts Inc. v. The Owners, Strata Plan VAS2188, a declaration on the strata plan said it was ‘‘entirely for residential use’’. At the same time, a zoning bylaw and a building scheme registered against title to an owner’s strata lot, permitted certain commercial activities. The court found that a declaration of this type had virtually no legal effect. In the Winchester case, the owner of a strata lot was permitted to carry on a fishing lodge business in accordance with the zoning bylaw and the terms of the building scheme, despite the ‘‘residential use’’ declaration on the strata plan.

It is essential that the most current information, including bylaws, be obtained and, if there is an upcoming meeting regarding any change in bylaws and rules, that these changes be monitored and conveyed to the buyer. The following are common restrictions on an owner’s ability to use a strata lot.

Age Restrictions

When considering age restrictions, real estate professionals should be careful to determine whether the strata corporation has passed and registered an age restriction bylaw. In some cases, developments are advertised as adult-oriented or adult only; however the developer or the strata corporation has never passed and registered a bylaw that restricts age. If there is no age restriction bylaw, an advertisement that the development is adult-oriented is not enforceable.

Real estate professionals should always review the bylaws to determine whether the strata corporation has passed an age restriction bylaw. Real estate professionals should not rely on the lack of ‘‘adult only’’ signage or the presence of children to determine whether the strata development restricts the age of occupants.

The Strata Property Act specifically permits strata corporations to restrict the age of occupants of a strata lot notwithstanding the Human Rights Code. A bylaw restricting the age of persons who may reside in a strata lot does not apply to someone residing there when the bylaw is passed.

• Discipline Record — Age Restriction Bylaw

  BCFSA received a complaint that a buyer’s agent had failed to advise buyers of an age restriction bylaw in a strata development that prohibited children under the age of 19. The buyers had a young daughter and became aware of the bylaw after they purchased a strata lot. As a result of the bylaw, the buyers were forced to sell the strata lot and could no longer afford to purchase another home.

  At the time the buyer’s agent showed the strata lot to the buyers, a sign at the entrance stated that the complex was adult-oriented. When the buyer enquired, the buyer’s agent explained that “although the complex was geared toward adults, there were probably a few children.” The evidence established that, although the buyer’s agent provided the bylaws to the buyer, the buyer’s agent had overlooked the bylaw restricting the age of the residents. At the conclusion of the hearing, BCFSA found that the buyer’s agent was negligent in failing to ascertain and disclose that there was an age restriction bylaw prohibiting children.

  BCFSA suspended the licence of the buyer’s agent for 14 days and ordered the buyer’s agent to successfully complete the portion of the licensing course regarding Condominiums and Agency.

Rental Restrictions

A bylaw may either prohibit rentals of residential strata units or limit the number or percentage of residential strata units that may be rented or limit the period of time for which they may be rented.

If a strata corporation passes a bylaw restricting rentals under the Strata Property Act, the date the rental restriction applies may vary from strata lot to strata lot. Where a strata corporation passes a rental restriction bylaw, there is a grace period of one year before the bylaw applies to any of the residential strata lots in the strata plan. If a tenant occupies a strata lot on the day that the bylaw is passed, the one year grace period for that strata lot starts to run when the tenant vacates the unit. Rental restriction bylaws do not apply to family members, who are defined to include a spouse, a spouse arising from a marriage-like relationship that has lasted at least two years, a parent or child of the owner, or a parent or child of the spouse. Additionally, if the developer filed a Rental Disclosure Statement that applies to the residential strata lot under consideration, depending on the year that the Rental Disclosure Statement was filed, the rental restriction bylaw may not apply to that strata lot if the Rental Disclosure Statement continues to be valid. A Rental Disclosure Statement is filed by a developer before any strata lots are offered for sale and indicates which strata lots are designated as rental strata lots and the rental period. In most cases the developer will identify all strata lots in the development as rental strata lots on the Rental Disclosure Statement.

For all developments for which the Rental Disclosure Statement was filed on or after January 1, 2010, a rental bylaw passed by a strata corporation does not apply to a strata lot identified in the Rental Disclosure Statement until the expiry of the Rental Disclosure Statement.

The ability to rent a strata lot can be of great importance to a buyer so real estate professionals need to understand the change and alert buyers to it.

Whether they act for a seller, a buyer, or both, real estate professionals are accountable for any information they provide regarding the real estate or a trade in real estate. Therefore, if a real estate professional is uncertain about the answer to any question a seller or buyer may have regarding the rental of a strata lot they should advise that person to obtain independent legal advice.

(i) Rental Disclosure Statement Filed Before January 1, 2010

A Rental Disclosure Statement filed before January 1, 2010 will protect the Developer and first buyers from the application of any rental bylaw passed by the strata corporation until the Rental Disclosure Statement expires. A buyer who purchases from a first or subsequent buyer does not have the benefit of a Rental Disclosure Statement.

Therefore, although buyers who purchase from the Developer will be protected from a rental bylaw if the Rental Disclosure Statement has not expired, future buyers will be subject to any rental bylaw that a strata corporation passes. The future buyers are not protected even though the Rental Disclosure Statement has not expired.

Buyers from developers who wish to take advantage of their right to rent should confirm that the rental period in the Rental Disclosure Statement is far enough into the future so that the first buyer’s right to rent will not be terminated by the expiry of the Rental Disclosure Statement. In many cases, the rental period for Rental Disclosure Statements filed before January 1, 2010 is at least 99 years, or is for an indefinite or unlimited period.

(ii) Rental Disclosure Statement Filed After January 1, 2010

A Rental Disclosure Statement filed on or after January 1, 2010 will protect the Developer and all buyers from the application of a rental bylaw until the expiry of the Rental Disclosure Statement.

The amendment to the Strata Property Act has extended the benefit of the Rental Disclosure Statement from just the first buyer to all buyers until the expiry of the Rental Disclosure Statement. In other words, second, third, fourth, etc. buyers will be able to rent their strata lot as long as the Rental Disclosure Statement has not expired providing that the Rental Disclosure Statement was filed with the Superintendent of Real Estate on or after January 1, 2010.

Essentially, the strata corporation is not able to restrict rentals during the term of the Rental Disclosure Statement. If the buyer sells the strata lot while the Rental Disclosure Statement is in effect, the subsequent buyer would also be permitted to rent the strata lot. This effectively broadens the potential market for the strata lot and may be viewed by the buyer as an advantage. However, for a buyer hoping to see rental restrictions in place in order to create an owner occupied community, the fact that the strata corporation would be unable to restrict rentals may be viewed by a buyer in such a circumstance as a disadvantage.

All buyers, including buyers from developers should confirm the rental period on the Rental Disclosure Statement. Although, in the past, most Rental Disclosure Statements did not expire for significant periods of time, since January 1, 2010 some developers have filed Rental Disclosure Statements for a very short period such as five years. In such cases, the protection from a Rental Disclosure Statement ends for all owners, including the first buyer, when the Rental Disclosure Statement expires. Most first buyers believe that they will always be able to rent because they purchased from the developer. This is not the case. Developments with very short rental periods would therefore not be attractive to buyers who wish to rent the strata lot for an extended period.

(iii) Rental Disclosure Statement to be Attached to Form B

Because a Rental Disclosure Statement is generally filed in the pre-marketing period, any building that was built by January 1, 2010 would most likely have a Rental Disclosure Statement that was filed prior to January 1, 2010. For those buildings, only the first buyer would have the benefit of the Rental Disclosure Statement until the Rental Disclosure Statement expired.

If the building is clearly a building where the Rental Disclosure Statement was filed before January 1, 2010, (i.e. built in the 80s, 90s or early 2000s) the general rule will apply. Buyers of resale strata lots should be advised that they have no protection from a rental bylaw and that a rental bylaw (either existing or one passed in the future) will apply to them.

Because the Rental Disclosure Statement did not apply to anyone other than the Developer and first buyer, even though the Rental Disclosure Statement is required to be attached to the Form B very few strata corporations bothered to do so. However, the amendment to the Strata Property Act relating to the application of the Rental Disclosure Statement has now made it necessary for the Rental Disclosure Statement to be attached so that buyers and real estate professionals acting on their behalf can determine whether the resale has a pre January 2010 Rental Disclosure Statement, in which case the new buyer would not benefit from the Rental Disclosure Statement or, whether the resale has a post January 2010 Rental Disclosure Statement, in which case the new buyer will have the benefit of the Rental Disclosure Statement until it expires.

It will therefore be necessary for buyers and real estate professionals acting on their behalf to determine the expiry date of the Rental Disclosure Statement for the resale of strata lots in the future. As noted above, unless the building is clearly one for which the Rental Disclosure Statement was filed before January 1, 2010, real estate professionals acting on behalf of buyers should insist that the Rental Disclosure Statement be attached to the Form B particularly where the real estate professional has any doubt or uncertainty about the date the Rental Disclosure Statement was filed.

In summary:

• (1) If the Rental Disclosure Statement was filed before January 1, 2010, buyers of resale properties should be informed that a rental bylaw would apply to them.
• (2) If the Rental Disclosure Statement was filed on or after January 1, 2010, the real estate professional should check the expiry date and if the date has not expired, advise resale buyers that they will be protected from a rental bylaw until the Rental Disclosure Statement expires.

Pet Restrictions

Section 3(4) of the Schedule of Standard Bylaws in the Strata Property Act prohibits pets, other than one dog or cat, up to two caged birds, and a reasonable number of small caged mammals, fish or other aquarium animals. This bylaw can be amended by the owners to prohibit all or certain types of pets or to create further restrictions regarding the keeping of pets, or alternatively, to expand the numbers or types of pets that may be kept in a strata lot. A bylaw prohibiting or restricting pets does not apply to a pet living with owners, tenants, or occupants at the time when the bylaw is passed.

Sales Restrictions

Section 122 of the Strata Property Act allows a strata corporation to pass a bylaw governing activities relating to the sale of a strata lot, including locations for the posting of signs and times for the showing of common property and holding of open houses, but the bylaw may not prohibit or unreasonably restrict those activities.

Miscellaneous Restrictions

Many strata corporations restrict:

• use of a strata lot, in regard to what cannot take place (such as running a business or an illegal activity);
• colour of window coverings — to allow for uniformity of window covering colour;
• waterbeds — often an outright prohibition, insistence on proof of insurance, or restriction on location within building;
• hot tubs — often a prohibition especially on roof decks due to concerns with leaks or weight;
• hardwood floors — may be prohibited or certain standards for underlay and noise abatement may be imposed especially in frame buildings
• barbeques – may be prohibited on balconies, or the type of barbeque may be restricted; and
• smoking – may be prohibited on common property, and possibly on balconies, decks and in some cases in strata lots.

Recovery of Special Levies or Proceeds Payable to the Strata Corporation

Where a strata corporation has passed a special levy and the amount collected exceeds the amount required, the Strata Property Act requires that the strata corporation return the excess funds to the owners. Because “owner” is defined as the person shown on the title, if the seller has sold the strata lot prior to the repayment of the excess special levy, the funds will be repaid to the buyer who is the “owner” of the strata lot at the time the refund is paid.

In addition, in some circumstances, strata corporations are receiving funds to offset costs they have incurred in relation to defective construction and/or water penetration. These funds might be the result of judgments, insurance/warranty claims, or settlements. When such funds are received a strata corporation may decide that some or all of these funds are to be returned to the owners. By the time the recovery is realized, the owner who paid the special levy to repair the building or fund the litigation may no longer be the registered owner. Although the Strata Property Act does not address the repayment of such funds, many strata corporations will pay out the funds to the current owner as if the funds were a repayment of an excess special levy. In other cases, a strata corporation may require the consent of the former owner and the current owner before funds are paid out.

When real estate professionals list strata units for sale, they should determine from the seller whether there have been any special levies for which there may be an excess. Additionally, real estate professionals should determine whether insurance or warranty claims have been filed. Real estate professionals should also know whether there is any litigation under way or pending that may result in a financial recovery.

As with all real estate transactions, real estate professionals must be careful in conducting transactions involving strata properties located in market areas that are unfamiliar to them. Information regarding particular strata properties that may be known to real estate professionals working in a particular area may not be common knowledge outside that area.

Where there is an indication of the possible future recovery of funds, the seller should be made aware that typically the assets and liabilities of the strata corporation flow with the registered owners as shown on title at the time of disbursement and proportionate to their unit entitlement. If the seller expresses a desire to retain certain rights or benefits (e.g., the right to recover funds payable after completion of a sale, the right to vote on future decisions with respect to the possible recovery, etc.), the seller should be made aware that retaining these rights or benefits should be negotiated with a prospective buyer. As a result, the seller should seek legal advice from a lawyer familiar with strata property issues prior to entertaining offers.

In situations where the possibility of future recovery of funds is uncertain, the least complicated approach may be to ensure that both the seller and buyer are aware of the current status of any anticipated recovery and related expenses. With that knowledge the end price negotiated will reflect how the parties have valued the possibility and uncertainty of future recovery and related expenses, knowing that if there is a recovery, any funds disbursed will be payable to the registered owner at the time of disbursement.

If the seller and/or buyer wish to negotiate an agreement that involves the seller receiving the repayment of funds in the future, each should be advised to seek independent legal advice, prior to entering into an unconditional contract of purchase and sale, from a lawyer who is familiar with strata property matters. Real estate professionals should be cautious about drafting clauses in these circumstances, given the uncertainty of future events and the difficulty in identifying issues that may or may not be readily apparent or foreseeable. list