By Veronica Franco and Juan Pablo Mendez Campos
In a marvel of efficiency, the BC government introduced into the legislature and made into law, the Building and Strata Statutes Amendment Act, SBC 2022, c 41 (the “BSSAA”) last week. In addition, it seems the government ignored CHOA’s concerns, which were sent by letter on November 21, 2022. Most of the concerns involved the ban on rental restrictions and its disproportionate impact on smaller, self-managed communities and the lack of evidence that rental restrictions resulted in a decrease of affordable housing. With barely any time for debate and the public to react, the government amended the Strata Property Act (the “Act”) by:
- removing a strata corporation’s right to create rental restriction bylaws;
- removing a strata corporation’s right to create age restriction bylaws other than 55+; and
- allowing electronic attendance at annual and special general meetings without requiring a specific bylaw.
In this edition of Stratagies, we will discuss the impact of these changes.
The End of Rental Restriction Bylaws
Rental restrictions were a right granted to strata corporations whose Rental Disclosure Statements were filed with the Superintendent of Real Estate before January 1, 2010 (Act, s.143(2)(a), now repealed). While it was possible to limit the right of owners to rent where a Rental Disclosure Statement was filed after December 31, 1999 (Act, s.143(2)(b), now repealed), developers rarely did so except in smaller strata corporations. This very limited right allowed a strata corporation to limit the period of time a strata lot may be rented or the number of strata lots that could be rented (Act, s.121(2)(a) and 141, now repealed). The BSSAA eliminated those rights.
Developers no longer have to file Rental Disclosure Statements (BSSAA, s. 17). All the provisions related to rental restrictions (Act, s. 141 to 145) have been removed except section 141(a), which now reads as follows:
The strata corporation must not screen tenants, establish screening criteria, require the approval of tenants, require the insertion of terms in tenancy agreements or otherwise restrict the rental of a strata lot.
There are transitional provisions. Under what is now the former section 145 of the Act, a tenant who discovered that their tenancy breached a rental restriction bylaw could end the tenancy without penalty within a limited period of time. Those tenants that gave notice because of the breach before the BSSAA came into force and now want to continue their tenancy have 30 days from November 24 to revoke their notice. This will only be possible if the tenant has not already vacated the strata lot, the owner has not entered into a new tenancy agreement with a new tenant or the owner has not paid the tenant’s reasonable moving expenses (unless the owner has paid those expenses and the tenant pays them back). There are no other transitional provisions.
We have received a number of questions about the end of rental restrictions. Below are some of the questions, with our answers:
- Our bylaws prohibit rentals. What does this mean for us?
The bylaw that prohibits rentals is no longer enforceable. This means any owner can rent their strata lot.
- Our bylaws limit the number of strata lots that can be rented. What does this mean for us?
The bylaw that limits the number of strata lots that may be rented is no longer enforceable. This means any owner can rent their strata lot.
- Now that our rental restriction bylaw is unenforceable, what do we do about the bylaws?
There is no obligation to do anything. At some point in the future, you may want to repeal those provisions to “clean up” your bylaws. However, that is not required.
- We had an owner that was breaching the rental restriction bylaw before the BSSAA came into force. We were in the process of enforcing the bylaws by levying fines. What happens now?
The owner still breached the bylaw. The amendments do not impact any process started to enforce a breach of the bylaws prior to the coming into force of the BSSAA. That said, an owner cannot be fined for having rented their strata lot on or after November 24, 2022.
It may be useful to obtain legal advice. The purpose of levying fines is to enforce the bylaws. As a result, council should also consider whether there is any utility to continue the process. Each situation will have to be determined based on the particular circumstances.
- We prohibit short term rentals. Is this bylaw still enforceable?
Yes. The amendments do not impact the right to prohibit short term accommodation. However, some strata corporations integrated their rental restrictions with the short term accommodation bylaws. Those strata corporations should get legal advice to determine whether those bylaws need to be amended to remove the language around rental restrictions.
- Are Form K – Notice of Tenant’s Responsibilities still required?
Yes. There were no changes made to the requirements for a landlord to provide the bylaws to the tenant and a copy of a Form K signed by the tenant to the strata corporation.
- Do we still need to keep track of rentals?
Strata corporation will need to keep a list of tenants as required under section 35(1) of the Act. Strata corporations will want to keep track of which strata lots are tenanted for bylaw enforcement purposes. Strata corporations will no longer have to disclose the total number of rentals on a Form B.
- What do we do about problem tenants?
That has not really changed. There are a few remedies:
(a) The tenant can be fined or charged back the costs of remedying a bylaw contravention. Section 130 of the Act requires the strata corporation to fine or charge back the costs of remedying the bylaw contravention to the tenant if the tenant, their occupants, or their visitors contravene the bylaws.
(b) If the strata corporation complies with the process for levying fines and chargebacks for remedying bylaw contraventions under section 135 of the Act, then the owner will have to pay the strata corporation the amounts charged to the tenant but only to the extent the tenant does not.
(c) If the contravention continues, the strata corporation can bring a claim in the Civil Resolution Tribunal for judgement of the amounts levied and for an order that the tenant stop contravening the bylaws. If after that order is obtained, the tenant continues contravening the bylaws, the strata corporation can bring contempt proceedings in the BC Supreme Court. This could result in a large fine payable by the tenant, incarceration of the tenant, or an order that the tenant stay away from the strata corporation.
(d) Section 138 of the Act allows the strata corporation to step into the shoes of the landlord to evict a tenant for a “repeated or continuing contravention of a reasonable and significant bylaw or rule” in accordance with the Residential Tenancy Act. This provision has been around for a number of years but since the late 2000’s, the Residential Tenancy Board (“RTB”) took the view that strata corporations do not meet the definition of landlord under the RTA. The RTB only has jurisdiction to deal with issues between landlords and tenants. Last week, the government changed the RTB’s Policy Guideline 27 in an attempt to expand the definition of landlord to include strata corporations. We will see if that is sufficient for the RTB to take jurisdiction on evictions started by strata corporations under section 138 of the Act. Even if sufficient, the RTB is backed up several months. Until that issue is resolved, there will be no quick way to evict a problem tenant.
If your strata corporation is grappling with a rental restriction bylaw issue, you can contact anyone on our team.
Age Restriction Bylaws
Age restrictions bylaws discriminate against persons on the basis of age. Historically, the court confirmed a strata corporation’s right to impose bylaws that restricted occupancy of a strata lot to persons over 55 or persons over 19 (Marshall v. Strata Plan NW 2584, [1996] BCJ No. 1716 and Drummond v. Strata Plan NW 2654, 2004 BCSC 1405). Because of those two decisions, age 19+ and age 55+ were the only enforceable age restriction bylaws. Effective January 1, 2008, the Human Rights Code was amended to specifically allow “a distinction on the basis of age” if that distinction is permitted by any other legislation. At the same time, section 123(1.1) of the Act was enacted to expressly give strata corporations the power to adopt age restriction bylaws. There was no limit on the ages that could be restricted. This left strata corporations with the power to create age restriction bylaws that limited any age (i.e. 45+).
The BSSAA eliminates that broad power so that strata corporations may only create a bylaw that restricts persons residing in the strata lot to those age 55 and older. Section 123(1.1) was repealed and is replaced with section 123.1 which provides:
(1) The strata corporation must not pass a bylaw that restricts the age of persons who may reside in a strata lot except as permitted by subsection (2).
(2) The strata corporation may pass a bylaw that requires one or more persons residing in a strata lot to have reached a specified age that is not less than 55 years.
In addition, section 123.2 sets out those persons that are exempt from an age restriction bylaw. Persons who were living in the strata lot (and were not violating an existing age restriction bylaw) at the time the bylaw is passed are exempt. Live-in caregivers for a resident that depends on a caregiver because of disability, illness or frailty are also exempt from an age restriction bylaw. In addition, the government has provided for a “prescribed class of persons”, which allows it to add further classes of people that can be exempt by regulation instead of another legislative amendment to the Act.
We similarly have received a number of questions about the changes to age restriction bylaws under the Act. Below are some of the questions, with the answers:
- Our strata corporation’s AGM is next week. One of the resolutions included an amendment to the bylaws to restrict occupancy to persons age 19 or older. What does this mean for us?
The resolution should be removed from the agenda. If it is part of a resolution to amend multiple bylaws, the strata corporation may be able to amend the resolution, but should obtain legal advice before doing so. If the strata corporation approves the resolution and decides to file it in the land title office, it will not be enforceable.
- We have an age restriction bylaw that does not allow persons under the age of 45 to reside in a strata lot. What do these changes mean for our strata corporation?
It attempts to render that bylaw unenforceable. Section 121 was also amended to make age restriction bylaws other than age 55+ unenforceable. Given the language in the media and published by the government, it seems that the government intended to do away with all age restriction bylaws except age 55+. However, persons who were living in a strata lot (and were not violating an existing age restriction bylaw) at the time an age restriction bylaw is passed are exempt from the age restriction bylaw (Act, s.123.2(a)(B)). This provision is meant to prevent someone from taking advantage of an amendment to the bylaws to “normalize” what had been a breach of the bylaws.
But how does section 123.2(a)(B) help a strata corporation now if all age restriction bylaws other than age 55+ are unenforceable? The short answer is that it doesn’t. If a strata corporation passes an over 55+ age restriction bylaw on January 1, 2023, all those residing in the strata lots as of that date are exempt even if the strata corporation had an age 45+ bylaw that was adopted ten years ago. If you interpret the BSSAA as making all existing age restriction bylaws other than age 55+ unenforceable, then, effective immediately, anyone of all ages is not in breach of an age restriction bylaw. As such the qualifier that a person can only benefit from the exemption if they were not in breach of an age restriction bylaw immediately before an age 55+ bylaw is adopted will never apply.
Notably, there are no transitional positions in the legislation that gave strata corporations time to consider what to do with their age restriction bylaws. For example, a strata corporation with an age 50+ only bylaw may have wanted time to amend their bylaws to make them age 55+. But now, if the age restriction bylaw is rendered unenforceable effective November 24, 2022, persons of any age will be able to move in until the strata corporation can get some advice, draft a resolution to amend the age restriction bylaw, and call a Special General Meeting. Considering we are at the beginning of the season where lots of persons go away and take time off, it’s likely to take a couple of months for a strata council to issue the notice package and hold the meeting. When the bylaw is finally approved, all those persons residing in a strata lot and that continue to live in the strata lot, including those that moved in after November 24, 2022, are exempt from the age restriction bylaw.
Perhaps, all this suggests that the pre-existing age restriction bylaws should not be immediately rendered unenforceable. Section 123.1 of the Act only bans the passing of age restriction bylaws other than age 55+ unenforceable. It does not expressly say that pre-existing age restriction bylaws are unenforceable. In addition, the qualifier in section 123.2(a)(B) is rendered meaningless if all age restriction bylaws were immediately unenforceable other than age 55+. Finally, strata corporations whose age restriction bylaws were close to age 55+ have no time to fix their bylaws if they are immediately unenforceable. Support for the pre-existing age restriction bylaws to continue may be found in section 35(1)(c) of the Interpretation Act, which states that when all or part of an enactment is repealed, the repeal does not “affect a right or obligation acquired, accrued, accruing or incurred under the enactment so repealed”. This means that if the adoption of an age restriction bylaw is held as a right acquired under the Act before the BSSAA came into force, then the repeal of that right does not affect the enforceability of age restriction bylaws that pre-existed the BSSAA. As long as the age restriction bylaw was valid before November 24, 2022, then the amendments would have not made the pre-existing bylaw unenforceable. Whether a court or tribunal would agree with this interpretation is something we will have to wait and see.
- We had age restriction bylaws because of sound transmission issues. How do we deal with noise complaints?
Strata corporations will have to investigate noise complaints just as they have always had to do. The more difficult part will be when ordinary day to day living results in complaints of a breach of “unreasonable” noise bylaws. Most will agree that a loud party breaches the bylaws. But what about young children walking or running in a strata lot.
Many older wood frame buildings were designed with sound transmission on the basis that the strata lots had wall to wall carpet in most spaces. However, hard surface flooring is now very popular and many owners have changed the original carpets to hard surface flooring which can result in sound transmission issues. Some strata corporations adopted age 19+ only bylaws to prevent children from living in the complex for a variety of reasons, including noise. Others permitted flooring changes because the strata lots were always “adult only”.
The most difficult noise to deal with is impact noise. This is the noise that is generated by hitting the floor, including dropping items, moving furniture, or walking. A toddler learning to walk or a child running from one room to another can cause this impact noise. It is unreasonable to expect a child to sit in place all the time. Placing foam mats or thick rugs can help, but it may not be sufficient to alleviate impact noise. Soundproofing the affected unit or installing better underlay may be difficult and expensive. In addition, questions arise as to who is responsible for paying for the soundproofing or the better underlay. What happens if the soundproofing and underlay are not effective. Similarly, making changes to the building structure are likely expensive with no guarantee that it will reduce noise either. As a result, there may be more disputes over noise that will ultimately end up in the Civil Resolution Tribunal to be resolved.
- We have bylaws that limit the number of people that can occupy a strata lot. Are those bylaws impacted by these amendments?
No, there is nothing in the BSSAA that impacts any pre-existing occupancy limit bylaws or prevents a strata corporation from having such a bylaw.
If your strata corporation is grappling with an age restriction bylaw issue, you can contact anyone on our team.
Electronic General Meetings
Prior to the measures adopted to prevent the spread of COVID-19, strata corporations required a bylaw in order to hold general meetings by telephone or other electronic means. When COVID-19 shut the world down and Public Health Orders prevented in person meetings, the government granted a temporary exemption to strata corporations without such a bylaw so that they could proceed with meetings electronically. That exemption was set to expire December 31, 2022. However, the BSSAA amended the Act to no longer require strata corporations to have a specific bylaw to hold general meetings electronically. Now, section 49 of the Act allows a strata corporation, even without a specific bylaw, to hold a general meeting electronically or allow persons to attend general meetings electronically provided certain conditions are met. These conditions are:
(a) the notice package for the general meeting includes instructions for attending the meeting electronically;
(b) the electronic means allow all persons attending the meeting to communicate with each other;
(c) the chair must be able to identify whether a person attending electronically is an eligible voter.
Two of the biggest challenges with electronic meetings has been the issue of voting cards and secret ballots. Most strata corporations had bylaws that required eligible voters to be issued a voting card to vote and to allow a vote by secret ballot where one was requested. With people attending remotely from anywhere in the world, the chair is not able to give an eligible voter a physical voting card. In addition, when meetings started to be held electronically as a result of the pandemic, the most widely used software for electronic meetings could not properly accommodate a secret ballot to allow all votes to be properly counted in accordance with the Act and the bylaws. Section 49 of the Act was also amended to address these two issues. An eligible voter that attends by electronic means does not have to be provided a voting card. In addition, where an eligible voter attends electronically, they are not entitled to or required to vote by secret ballot.
Finally, section 45(3) of the Act was amended to require the notice of a general meeting to include instructions for attending the meeting by electronic means if electronic attendance is permitted in the meeting. In addition, that section now also expressly requires the notice to include the date, time and place of the meeting (if applicable).
