LESSON 4 Flashcards

Question

THE KEY RIGHTS AND OBLIGATIONS OF THE PARTIES IN A TENANCY RELATIONSHIP/ RENT: RESIDENTIAL

Answer 1

Rent increases are regulated by part 3 of the Act. A landlord may increase the rent in only two circumstances. First, a landlord may increase a tenant's rent if at least 12 months have passed since that tenant's last rent increase for those premises, or since the tenant started to rent the premises. Second, a landlord may raise the rent any time the premises are re-rented to new tenants, even though it may have been raised less than 12 months prior to the re-rental. A change of landlord does not give a right to raise the rent. Written notice of an increase must be given to a tenant at least three months before it becomes effective. Under the Residential Tenancy Act Regulation, landlords may increase rent on an annual basis up to an amount equal to the Consumer Price Index for BC. Rents can no longer be increased above the maximum annual allowable amount between fixed-term tenancy agreements with the same tenant. This protects tenants by preventing landlords from significantly increasing rent from year to year, at the end of the fixed term.

Answer 2

Security deposit A sum of money paid to the landlord as collateral in case the tenant damages the premises of otherwise violates a term of the tenancy agreement. There are no legal restriction regarding the security deposits for commercial tenancies. This is an item left open for negotiation. The landlord will usually require some form of a security deposit to ensure that the tenant will continue to pay the rent, as well as to protect against damage to the property committed by the tenant. Sometimes, the security deposit takes the form of pre-payment of rent for the last month or two. According to the common law, return of the deposit is a personal obligation of the landlord; therefore, someone who purchases the property from the landlord is under no duty to the tenant to repay it.

Answer 3

Section 17 of the Act provides that a landlord may require a tenant to pay a security deposit as a condition of entering into a tenancy agreement or as term of a tenancy agreement. A landlord may collect a security deposit at the time the tenancy agreement is entered into. Further, the deposit may not be more than one-half of one month's rent. Only one security deposit can be collected for each residential unit. A landlord must pay interest (compounded annually) on both the security deposit and the pet damage deposit (if the landlord allows pets or not).

Answer 4

Distress is a legal term for a landlord's right to seize and sell a tenant's personal property in order to recover arrears of rent. A commercial landlord can exercise the common law remedy of distress by seizing a tenant's goods and eventually selling them to satisfy a claim for rent owing.

Answer 5

Section 26 of the Residential Tenancy Act abolishes the remedy of distress in residential tenancies.

Answer 6

Mitigation is a principle requiring that a party who has suffered loss take reasonable action to minimize the amount of loss suffered. Commercial Where one party breaches a contract, the law usually requires the other party to mitigate their damages. In other words, the innocent party must try to reduce the loss suffered as a result of the breach. If a tenant improperly abandons the premises, the landlord may be able to sue the tenant for each month's rent. However, once the landlord is held to have surrendered the lease, they will lose any claim for rent against the tenant after the surrender. There are two types of surrender. First, surrender can occur by an act of the parties. Second, it can arise by operation of law. A surrender is the giving up of the term so that it joins with the reservation. A surrender by an act of the parties would occur when the tenant offers to terminate the lease early and the landlord accepts. A surrender by operation of law occurs where the landlord does some act which is inconsistent with the continuation of the tenancy.

Answer 7

Section 7 changes the common law by imposing an express duty on residential landlords and tenants to mitigate their damages or loss that results from the other's non-compliance with the Act of Regulation, or from a breach of the tenancy agreement.

Answer 8

Section 7 changes the common law by imposing an express duty on residential landlords and tenants to mitigate their damages or loss that results from the other's non-compliance with the Act of Regulation, or from a breach of the tenancy agreement.

Answer 9

Acts sets out the rules for delivery or service of any documents required to be given under the Act. -mail, it is considered received on the fifth day after mailing -email, it is considered received on the third day after it is sent; -fax, it is considered received on the third day after it was faxed; and -attaching a copy to a door, or leaving a copy in a mail box or mail slot, it is considered received on the third day after it was attached or left.

Answer 10

Because a lease grants exclusive possession of a piece of property and conveys an interest or estate in that land, there is an implied covenant of quiet enjoyment at common law. The term "quiet enjoyment" does not simply mean freedom of noise; rather, it is an assurance to the tenant against the consequences of a defective title. In other words, if the landlord, or anyone who claims to have received rights from the landlord, attacks the tenant's right to the premises, it would be a breach of this covenant.

Answer 11

The implied covenant for quiet enjoyment has specifically been preserved by the Residential Tenancy Act, section 28 states: PROTECTION OF TENANT'S RIGHT TO QUIET ENJOYMENT A tenant is entitled to quiet enjoyment including, but not limited to, right to the following: a) reasonable privacy b) freedom from unreasonable disturbance c) exclusive possession of the rental unit subject only to the landlord's right to enter the rental unit in accordance with section 29 d) uses of common areas for reasonable and lawful purposes, free from significant interference. One aspect of quiet enjoyment is "reasonable privacy". The Act goes on to limit a landlord's right to enter a rental unit, in furtherance of protecting a tenant's right to reasonable privacy. Section 29 states: LANDLORD'S RIGHT TO ENTER RENTAL UNIT RESTRICTED 1) A landlord must not enter a rental unit that is subject to a tenancy agreement for any purpose unless one of the following applies: a) the tenant give permission at the time of the entry or not more than 30 days before the entry b) at least 24 hours and not more than 30 days before the entry, the landlord gives the tenant written notice that includes the following info: i)the purpose for entering, which must be reasonable ii) the date and the time of the entry, which must be between 8am to 9pm, unless the tenant otherwise agrees; c) the landlord provides housekeeping or related services under the terms of a written tenancy agreement and the entry is for the purpose and in accordance with those terms; d) the land has an order of the director authorizing the entry; e) the tenant has abandoned the rental unit; f) an emergency exists and the entry is necessary to protect life or property. 2) a landlord may inspect a rental unit monthly in accordance with subsection 1 (b)

Answer 12

Covenant of non-derogation from the grant is a guarantee to the tenant that the landlord will not substantially deprive them of the benefit conferred by the tenancy agreement. The implied covenant of quiet enjoyment is very similar to another rule, namely, the covenant of non-derogation from the grant. This means that the landlord cannot deliberately prejudice any rights which they have granted to the tenant under the lease. Having given a thing with one hand, the landlord must not take away the means of enjoying it with the other. For example, a landlord cannot grant a lease of premises to a tenant an then, by actions on adjoining premises, frustrate the tenant's lease.

Answer 13

The common law right of the tenant against derogation from grant of the landlord still exists for residential tenants.

Answer 14

There is an implied covenant on the part of a commercial landlord to let the tenant into possession of the leased premises at the beginning of the term of the lease. If the landlord does not do so, they will be liable for damages. However, the commercial tenant cannot get an order for specific performance in these circumstances. The tenant may only sue for damages. This is because of the common law doctrine of interesse termini, which provides that no estate in land passes until the tenant takes possession.

Answer 15

The doctrine of interesse termini has been abolished under the Residential Tenancy Act. Therefore, if a residential tenant is refused possession by the landlord at the start of the term of the tenancy, the tenant can obtain an order for possession against the landlord. The residential tenant is not limited to damages.

Answer 16

There has always been an implied condition that leased furnished premises be reasonably fit for human habitation and occupation. However, the law does not impose a similar obligation for unfurnished premises. The doctrine of caveat lessee (let the tenant be aware) applies in commercial tenancies. There is no obligation on the landlord to repair. The tenant has to satisfy themselves as to the sustainability of the premises before entering into the lease.

Answer 17

Under section 32 of the Residential Tenancy Act, the landlord has a duty to repair all types of residential premises, furnished or unfurnished, even if they were in disrepair when the tenancy agreement was made. Landlord and tenant obligations to repair and maintain 1) a landlord must provide and maintain residential property in a state of decoration and repair that a)complies with health, safety and housing standards required by law, and b)having regard to the age, character and locality of the rental unit, makes it suitable for occupation by a tenant... 5) a landlord's obligations under subsection 1) a) apply whether or not a tenant knew of a breach by the landlord of that subsection at the time of entering into the tenancy agreement.

Answer 18

There is an implied covenant that the tenant will treat the premises in a tenant-like manner. This means that a tenant must do those odd jobs required to maintain the premises as would a reasonable tenant. Aside from treating the premises in a tenant like manner, the tenant has no obligation to repair. The tenant does not have a duty, however, not to intentionally harm the premises by pulling down the walls of performing acts of a similarly destructive nature which would constitute waste.

Answer 19

The Act has imposed a slightly higher duty on the residential tenant that existed at common law.

Answer 20

The Act has imposed a slightly higher duty on the residential tenant that existed at common law. The relevant provisions is also contained in section 32: 2) a tenant must maintain reasonable health, cleanliness and sanitary standards throughout the rental unit and the other residential property to which the tenant has access. 3) a tenant of a rental unit must repair damage to the rental unit or common areas that is caused by the actions or neglect of the tenant or a person permitted on the residential property by the tenant. 4) a tenant is not required to make repairs for reasonable wear and tear.

Answer 21

An assignment is the transfer by a party of all of the party's interest in a property to another party. The person transferring the interest is called the assignor, and the person receiving it is called the assignee. Unless there is an express prohibitions in the lease, a tenant under a commercial lease may assign or sublet without the consent of the landlord.

Answer 22

Section 34 of the Act has simplified the legal position for residential premises. A residential tenant may not assign or sublet the landlord consents in writing. If a tenancy agreement is for a fixed term of 6 months or more the landlord may not unreasonably without consent. A landlord may never change for this consent.

Answer 23

JUST STARTING...

Answer 24

BC has had strata legislation since 1996. The Strata Property Act retains most of the legal fundamentals contained in previous strata legislation and adds many refinements.

Answer 25

A strata development is created by the filing of a strata plan by an owner developer, On the strata plan, the entirety of the building is divided between strata lots and common property.

Answer 26

Unit entitlement is the number assigned to a strata lot that is sued to determine the owner's proportionate ownership in the common property and the strata expenses and liabilities for which the owner is responsible. Each strata lot is assigned to a particular number, known as its "unit entitlement". This number is used in numerous instances. Firstly, it determines each owner's proportionate, undivided ownerships share as a tenant in common of the common property in the strata plan. Although the owners own the common property, the strata corporation exercises exclusive control over it. Secondly, unit entitlement determines the share of the strata corporation's expenses and liabilities for which each strata lot is responsible. The Schedule of Unit Entitlement is important for licensees to review. It allows licensees to determine the contribution required from each strata lot towards common expenses, including special levies and strata fees.

Answer 27

Section 1 of the Strata Property Act defines common property as follows: "Common property" means a) that part of the land and buildings shown on a strata plan that is not part of strata lot, and b) pipes, wires, cables, chutes, ducts and other facilities for the passage or provision of water, sewage, drainage, gas, oil, electricity, telephone, radio, television, garbage, heating and cooling systems or other similar services, if they are located: i) within a floor, wall or ceiling that forms a boundary a) between a strata lot and another strata lot b) between a strata lot and the common property, or c) between a strata lot or common property and another parcel of land, or ii) wholly or partially within a strata lot, if they are capable of being and intended to be used in connection with the enjoyment of another strata lot of the common property.

Answer 28

Although the owners own the common property, the strata corporation must manage, repair and maintain it. There are several ways that a strata corporation can permit an owner to exclusively use common property. The first method is to designate the area as limited common property. Alternatively, the strata corporation may agree to permit an owner or tenant to exercise short term exclusive use over the relevant common property area.

Answer 29

Limited common property is a common property designated for the exclusive use of the owners of one or more strata lots. The LCP designation attaches to a strata lot rather than the registered owner of the strata lot. In other words, the designation "runs with the land". Every owner who has the right to use LCP must allow the strata corporation reasonable access to the LCO for the strata corporation to perform its duties.

Answer 30

Short term exclusive use is a special privilege granted to owners and tenants to exclusively use common properly that is not designated limited common property. A strata corporation may also give an owner or tenant permission to exclusively use common property that is not designated LCP, or to use a common asset. The Strata Preparty Act refers to this approach as short term exclusive use agreement or a special privilege.

Answer 31

A corporation is an artificial legal person. In other words the law recognizes the corporate entity as a person for the purposes of the law, even though it is no a human person. In general, a corporation has the same ability as natural person to do things of a legal nature. For example a corporation can enter contracts to buy or sell property or services, and a corporation can sue or be sued. The developer creates a strata corporation by depositing the strata plan in the land title office, section 2 of the Strata Property Act states: From the time the strata plan is deposited in a land title office a) a strata corporation is established and b) the owners of the strata lots in the strata plan are members of the strata corporation under the name "The Owner, Strata Plan [the registration number of the strata plan].

Answer 32

Strata corporation is a legal entity created by the deposit of a strata plan in the land title office. The corporation's responsibilities are set out in the Strata Property Act and include the duty to manage, repair, maintain and insure common property and common assets.

Answer 33

Section is a legal entity, often described as a "mini strata corporation", comprised of strata lots that share similar characteristics. Sections have their own executive and are created to represent the owners of specifically identified strata lots. For example, sections can be formed in a development that contains both residential and non-residential strata lots; non-residential strata lots used for different purposes; or townhouse and apartment style strata lots. The strata corporation continues to exist as a legal entity whether a strata development has sections. After the creation of sections, the strata corporation retains its powers and duties in matters of common interest to all owners. The strata corporation will, at a minimum, still be responsible for obtaining insurance. The responsibility of the strata corporation for repair and maintenance will depend on the design of the development, and whether sections are comprised of residential and non-residential strata lots or townhouse and apartment style strata lots.

Answer 34

Strata corporation must manage, repair, maintain and insure the common property and the strata corporation's common assets. THE DUTY TO MANAGE The Strata Property Act requires the strata corporation to manage and maintain the common property and common assets of the strata corporation for the benefit of the owners. The term "common assets" refers to property that the strata corporation owns. THE DUTY TO REPAIR AND MAINTAIN The Strata Property Act requires the strata corporation to repair and maintain the common property and common assets. THE DUTY TO INSURE The Strata Property Act requires the strata corporation to obtain and maintain full-replacement-value property insurance against harm to the common property, including any buildings shown on the strata pan, the common assets and any fixtures built or installed on aa strata lot by the developer as part of the original construction of that strata lot. THE DUTY TO ENFORCE THE BYLAWS AND RULES The strata council, on behalf of the strata corporation, must enforce the bylaws, and rules, as will be discussed later in this chapter. THE DUTY TO KEEP REOCORDS Section 35 of the Strata Property Act says that the strata corporation must prepare all of the following records: -minutes of annual and special general meetings and council meetings, including the results of any vote; - a list of council members; -a list of owners, with their strata lot addresses, mailing addresses if different, strata lot numbers as shown on the strata plan, parking stall and storage locker numbers, if any, and unit entitlements; -a list of names and addresses of mortgages who have filed a Mortgagee's Request for Notification under section 60 of the Act; -a list of names of tenants; -a list of assignment of voting or other rights by landlords to tenants under sections 147 and 148 of the Act; -books of account showing money received and spent and the reason for the receipt or expenditure; and -any other records required by the regulations.

Answer 35

Section 36 of the Strata Property Act guarantees access to virtually all the strata corporation's records to: -an owner -a tenant who has received an assignment of a landlord's right to inspect and copy records under sections 147 or 148 of the Act; or -a person authorized in writing by an owner or by a tenant who has been assigned the owner's rights.

Answer 36

1. Section 148 of the Strata Property Act says that a tenant who leases a residential strata lot from the owner for a set term lease of three years or more assigned the powers and duties of their landlord, including access to the strata corporation's records. However, before this power can be exercised the tenant must forward written notice of the assignment to the strata corporation. 2. Section 142 says that renting a strata lot to a family member will create an assignment of the owner's powers and duties. The regulations define the term "family member" to mean a spouse of the owner, a parent or child of the owner, or a parent or child of the owner's spouse. Before this power can be exercised the tenant must forward written notice of the assignment to the strata corporation. 3. Lastly, section 147 of the Act permits an owner to assign some or all of the owner's powers and duties, including the owner's right to inspect and copy the strata corporation's records, to a tenant. The assignment is not effective until the landlord gives the strata corporation written notice of the assignment, stating the name of the tenant, the powers and duties that have been assigned, and the time period during which the assignment is valid.

Answer 37

Purchasers are not yet owners and they are not yet members of the strata corporation. Section 1 of the Strata Property Act defines the term "purchaser" as follows: "a person...who enters into an agreement to purchase a strata lot or to acquire a strata lot lease in a leasehold strata plan...but to whom the strata lot or strata lot lease has not yet been conveyed or assigned".

Answer 38

Section 59 of the Strata Property Act entitles an owner, a purchaser, or a person authorized by an owner or purchaser, to request an Information Certificate from the strata corporation. The Certificate must disclose all of the following information concerning the strata corporation and the strata lot for which the request is made, as at the date of the Certificate: -the monthly strata fees payable by the owner; -any amount that the owner owes the strata corporation, other than disputed amounts paid into court or to the strata corporation in trust under section 114 of the Act; -any agreements under which the owner takes responsibility for expenses relating to alterations to a strata lot, the common property or the common assets; -any amount that the owner is obligated to pay in the future for a special levy that has already been approved and the date by which the payment is to be made; -any amount by which the expenses of the strata corporation for the current fiscal year are expected to exceed the expenses budgeted for the fiscal year; -the amount in the contingency reserve fund minus any expenditures that have already been approved but not yet taken from the fund; -any amendments to the bylaws that are not yet filed in the land title office; -any resolution passed by a 3/4 vote or unanimous vote that is required to be filed in the land title office but that has not yet been filed; -any winding-up resolution that has been passed; -any notice that has been given for a resolution that has not been voted on, if the resolution requires a 3/4, 80% vote or unanimous vote or deals with an amendment to the bylaws; -any court proceeding, arbitration or tribunal proceeding in which the strata corporation is a party and any judgments or orders against the strata corporation; -any notices or work orders received by the strata corporation that remain outstanding for the strata lot, the common property or the common assets; -the number of strata lots in the strata plan that are rented; which parking stalls and storage lockers, if any, have been allocated to the strata lot; and -any other info required by the regulations.

Answer 39

Certification of Payment is a document that informs a buyer of a strata lot whether there is any money owing to the strata corporation in respects of a strata lot. The strata corporation must comply within the request for a Certificate of Payment within one week if the following conditions are met: a) the owner does not owe money to the strata corporation, or b) if the owner does own money, but i) they have paid any disputed funds into court or the strata corporation in trust, or ii) the owner has otherwise made satisfactory payment arrangements with the corporation. The Certificate must certify that the owner meets these conditions. In completing the Certificate, the strata corporation may include money owing for any of the following: -strata fees -a special levy -reimbursement of the cost of work done by the strata corporation following the owner's failure to comply with a work order from a public or local authority under section 85 of the Act -the strata lot's share of judgment against a strata corporation -fines -costs charged by the strata corporation for remedying a contravention of bylaw or rule. Apart from court-ordered sales, the Registrar of Land Titles cannot register any conveyance, lease, assignment of a lease, or an agreement for sale of a strata lot unless accompanies by a Certificate of Payment.

Answer 40

A buyer may also indirectly obtain access to the strata corporation's records via the contract of purchase and sale with the seller. When drafting a purchaser's offer, a licensee typically makes the offer subject to the seller obtaining the necessary strata documents for the buyer's review. The seller, or owner of the strata lot, has full access to the strata corporation's records. Alternatively, the contract might simply contain the seller's delegation of access right to the buyer and the buyer agent's brokerage. Recall that the Strata Property Act entitles an owner, of their authorized delegate, to inspect an obtain copies of virtually all of the strata corporation's records.

Answer 41

A licensee who markets a strata property, whether as the representative of the seller, the buyer or both, should request and familiarize themselves with the following documents. To extent that any of the following minutes are available, they should span at least the preceding two years: -strata council minutes -minutes from all annual, extraordinary or special general meetings -minutes of the executive and any general meetings of any section to which the strata lot belongs -the budget and financial statements -the bylaws and rules.

Answer 42

THE COUNCIL Council is an executive body elected by the strata lot owners to carry out the duties of the strata corporation and oversee its affairs. Generally specking, only strata lot owners are eligible to sit on the council. After the developer creates the strata corporation by depositing the strata plan, the developer serves as the first council. Section 6 of the Strata Property Act requires a developer, while serving as the council, to act honestly and in good faith with a view to the best interests of the strata corporation. The developer must also exercise the care, diligence and skill of a reasonably prudent person in comparable circumstances. ELIGIBILITY FOR COUNCIL The strata corporation's bylaws determine the number of seats on council. Owners are eligible to sit on council. If two or more persons are registered on title as owners of a strata lot, only one of them at a time may sit on council unless all the owners are on council. If a corporation owns a strata lot, the corporation may choose an individual to represent the corporate owner on council. Only one representative of the corporation at a time can sit on council. THE MEMBERS The owners of the strata lots are the members of the strata corporation. The members convene in general meetings to carry out their business. Every year the strata corporation must hold an annual general meeting of its members. The meeting must be held no later than two months after the strata corporation's fiscal year end. Amon other things, the members at the annual general meeting must elect a new council and approve the budget. All other general meetings of the members are called special general meetings. VOTING All matters at general meetings are decided by majority vote, unless the bylaws or legislation require a 3/4 vote or unanimous vote. In some cases, eligible voters from non-residential strata lots will have to meet a different voting threshold to amen a bylaw. If two or more persons share one vote with respects to strata lot, only one of them may vote on a given matter. If they cannot agree how to vote on a specific matter, then chairperson must not count their vote with respect to that matter. Only strata lot owners may vote, unless the owner has otherwise assigned the right to vote to a tenant or a mortgage. In limited circumstances, a lender with a mortgage over a strata lot may vote in place of the owner. The mortgage doc must give the lender the right to vote. The lender must also give the strata corporation at least three days written notice of their intention to vote. The lender can only vote in respect of insurance, maintenance, finance or other matters affecting the security of the mortgage. MANAGEMENT CONTRACT Many of the day-to-day responsibilities of a strata corporation are time-consuming or require management expertise. For these reasons, the Strata Property Act permits the strata corporation to hire a strata property manager to carry out these functions. Every person who, for remuneration, provides strata management services to a strata corporation, or to a section, must be licensed under the Real Estate Services Act, unless otherwise exempted. When a strata corporation hires a strata property manager, the manager represents the strata corporation, not individual owners. The strata property manager must only take their instruction from the council. In addition to the manager's duties under the strata property management contract, the manager also has fiduciary responsibilities to the strata corporation.

Answer 43

Every strata corporation must have two funds: an operating fund and a contingency reserve fund. All of the owners contribute to the funds through their strata fees. The operating fund is for common expenses that usually occur one or more times each year. The strata corporation is responsible for the corporation's common expenses. Common expenses relate to the common property and common assets of the strata corporation or, in some cases, to limited common property or to expenses that are otherwise required to meet the corporation's obligations. The strata corporation must also establish a CRF to pay for common expenses that occur less than once per year.

Answer 44

To meets its operating expenses and to create a financial reserve for contingencies, every strata corporation must have a budget. In the early states of strata corporation, the developer is responsible for the budget process. Later, after the first annual general meeting, the council takes over budget responsibilities.

Answer 45

Interim budget is the context of a strata corporation, the budget created by the owner developer that governs the finances of the strata corporation until the first annual general meeting. The budget must include, among other things: -estimated operation expenses -a contribution to the CRF and -each strata lot's monthly share of the estimated operating expenses and contribution to the CRF, based on the Schedule of Unit Entitlement. The developer or the salesperson representing the developer, must deliver a copy of the interim budget to each prospective purchaser. Once the developer's interim budget takes effect, the owners must start contributing financially to the strata corporation. Each month, every strata owner must pay their share of the budgeted operating expenses as well as the budgeted contribution to the CRF. Like any other owner, the developer must make monthly contributions for each of the strata lots belonging to the developer that remain unsold.

Answer 46

Contingency reserve fund is a fund maintained by a strata corporation for common expenses that usually occur less often than once a year or that do not usually occur. The Strata Property Act requires both developers and the strata corporation to make contributions to the fund. The former Condominium Act dis not require developers to create a contingency reserve fund. In most cases, strata corporations did not start saving funds for contingencies until the passage of the first annual budget at the first annual general meeting. This often meant that strata corporations lacked any contingency reserve for several years after the first conveyances of property. The Strata Property Act requires the developer to pay a lump sum into the CRF when the first strata lot is conveyed to a purchaser. Informally, we say that this lump payment "seeds" the CRF. Note that, if a mandatory contribution is required, the minimum amount will differ according to whether the strata corporation is budgeting for the fiscal year following the first annual general meeting (AGM) of whether the strata corporation is budgeting for a subsequent fiscal year. 1.MANDATORY CONTRIBUTION -FISCAL YEAR FOLLOWING THE FIRST AGM If at the time of the first annual general meeting, the amount of money in the contingency reserve fund is less than 25% of the estimated operation expenses for the 12 month period set out in the interim budget, then the strata corporation must make a contribution to the CRF. -REQUIRED CONTIBUTION At least 10% of the total budgeted contribution to the operating fund in the first annual budget. -ALL SUBSEQUENT FISCAL YEARS If, at the end of the fiscal year, the amount in the CRF is less than 25% of the total budgeted contribution to the operating fund in the discal year than just ended, the strata corporation must make a contribution to the CRF. -REQUIRED CONTRIBUTION The lesser of: a. 10% of the total budgeted contribution to the operating fund for the current fiscal year; or b. the amount required to bring the CRF to at least 25% of the total budgeted contribution to the operating fund for the current fiscal year. 2.OPTIONAL CONTRIBUTION If the amount in the CRF is equal to or more than 25% of the total budgeted contribution to the operating fund in the last fiscal year, additional contributions to the CRF are optical and may be made as part of the annual approval process after consideration of the depreciation report.

Answer 47

Every owner must pay strata fees (formerly called "maintenance fees" under the Condominium Act0 which cover the strata corporation's operating expenses and any contribution to the CRF. The Schedule of Unit Entitlement determines the share payable for each strata lot. Sometimes, strata owners who sell their look ask the strata corporation to return some or all of the owner's contributions to the CRF. The Strata Property Act expressly prohibits any such return.

Answer 48

Special levy is an additional contribution applied against owners by the strata corporation, usually for unexpected expenses. Depending on how the special levy is proportioned between strata lots, approval will require either a 3/4 vote or unanimous vote. The Strata Property Act permits strata corporations to raise money by special levies against the owners. A special levy is equivalent to what business partners sometimes describe as a "cash call." For instance the strata corporation might need a special levy to pay for major repairs if there is not enough money in the CRF, or if the owners otherwise prefer no to deplete the CRF with their expenditure. Depending on the way the levy is applied against the owners, a 3/4 or unanimous resolution is required. A 3/4 resolution is necessary if the strata corporation intends to collect contributions to the special levy according to the Schedule of Unit Entitlement, like strata fees. On the other hand, if the corporation intends to seek contribution on some other basis, a unanimous vote is necessary.

Answer 49

A strata corporation must meet various conditions before it can spend money from the operating fund or the CRF.

Answer 50

The strata corporation can only spend funds from the operating fund if the expenditure is consistent with the purpose of the fund and the expenditure falls into one of the following categories: 1. The expenditures is authorized in the budget 2. The expenditure is approved by a 3/4 vote at a general meeting 3. The expenditure is authorized unapproved expenditure. Under the Strata Property Act, there are two types of authorized unapproved expenditures from the operating fund: i. a strata corporation may pass a bylaw allowing the strata council to spend operating funds without prior approval up to a certain spending limit. If the bylaws are silent as to an amount, the Act permits a council to spend up to 5% of the total contribution to the operating fund for the current year or $2,000 whichever is less. ii. a strata corporation may spend operating funds if there are reasonable grounds to believe that an immediate expenditure is necessary to ensure safety or prevent significant loss or damage. In an emergency, the strata may only spend the minimum amount necessary to ensure safety or avoid loss.

Answer 51

In contrast, the strata corporation can only spend funds from the CRF if the expenditure is consistent with the purpose of the fund and the expenditures falls into one of the following categories: 1. the expenditure is approved by a 3/4 vote at a general meeting; however, only a majority (50%) vote is needed if it is recommended in the depreciation report. 2. the expenditure is an authorized unapproved expenditure. Under the Strata Property Act, there is only one type of authorized unapproved expenditure from the CRF: i. a strata corporation may spend from the CRF is there are reasonable grounds to believe that an immediate expenditure is necessary to ensure safety or prevent significant loss or damage. Under the Strata Property Regulation, the definition "prevent significant loss" includes the cost of obtaining and maintaining or property and liability insurance that a strata corporation is required to hold under the Strata Property Act or the strata corporation's bylaws. In an emergency, the strata may only spend the minimum amount necessary to ensure safety or avoid loss.

Answer 52

Depreciation report is an estimation of the repair and replacement cost for major items owned by the strata corporation and the expected life of those items. The depreciation report requirement gives a strata corporation a tool to address the necessary costs to maintain its common property and assets as they age. Depreciation reports must be prepared by a "qualified person", defined broadly in regulations as an individual with the knowledge and expertise to understand the components, scope and complexity of the assets and property that the strata corporation is responsible for and the strata corporation's bylaws. Depreciation reports must be based on an on-site visual inspection of the site by the preparer of the depreciation report and must contain all of the following components: 1. physical component inventory and evaluation 2. a summary of repairs and maintenance work for common expenses that occur less often than once a year or that do not usually occur 3. a financial forecasting section that includes the anticipated maintenance, repair and replacement costs for common expenses that occur less often than once a year or that do not usually occur, projected over 30 years, and how such costs impact the contingency reserve fund 4. information about the person from whom the depreciation report was obtained, including their name, qualifications, insurance coverage and relationship with the strata corporation. 5. the date of the report 6. any other info or analysis that the strata corporation or preparer of the depreciation report considers advisable.

Answer 53

The corporation's most important responsibility is to manage and maintain the common property and common assets of the corporation for the benefit of the owners. Lien is a claim or charge on real or personal property for the payment of some debts, lien obligation or duty. The Strata Property Act also permits the strata corporation to file a lien in the land title office against a strata lot for money owning to the corporation. The lien can cover the owner's indebtedness for: -strata fees, with interest -a special levy, with interest -reimbursement for work done to the owner's strata lot by the strata corporation for which the owner is responsible -the strata lot's share of a judgment against the strata corporation and -the reasonable legal costs and disbursement for filing the lien. The strata corporation cannot file a lien if the owner has paid the disputed amount to a court or into a trust held by the strata corporation or has otherwise made satisfactory arrangements with the corporation to pay the money. A lien serves as notice of the strata corporation's claim for the amount owing. If the strata corporation does not want to wait to enforce its lien, the corporation must sue the owner for a judicial determination of the amount owing.

Answer 54

Bylaws is in the context of a strata, the strata corporation's constitution that provides for the control, management, maintenance, use and enjoyment of the strata lots, common property, and common assets of the strata corporation, and for the administration of the strata corporation. Rules in the context of a strata, optional, informal regulations made by strata councils to govern the use, safety and condition of the common property and common assets.

Answer 55

The Standard Bylaws in the Strata Property Act can be viewed by accessing the Strata Property Act on the BC Laws website at www.bclaws.ca. The bylaws are at the very end of the Act. The strata corporation may amend the Standard Bylaws by changing the wording or otherwise deleting or adding to it. A custom-made by law is called an "amended bylaw". Bylaw amendments are not enforceable if they contravene the Strata Property Act, the regulations, the Human Rights Code, or any other law. This means that even if the members unanimously pass an amendment, it is still unenforceable if it violates the law. A developer's ability to amend the bylaws varies depending on the circumstances. When the first conveyance occurs, special restriction may constrain a developer's ability to change the bylaws in some cases.

Answer 56

Strata councils can pass rules to regulate the use, safety and condition of the common property and common assets. Undert the former Condominium Acct,

Answer 57

Strata councils can pass rules to regulate the use, safety and condition of the common property and common assets. Under the former Condominium Act, we called these rules "regulations". The Strata Property Act provides that every regulation previously made under earlier legislation is deemed to be rule to which the new Act applies. Councils must be careful when passing rules. A rule will have no legal effects if it contravenes the Act, the Human Rights Code or any other law. On the other hand, once ratified at a general meeting a rule remains effective until it is repealed, replaced or altered.

Answer 58

A strata corporation has already dealt with the same subject matter by passing valid amended bylaws that are filed in the land title office.

Answer 59

A strata corporation must take a series of steps before it can enforce its bylaws and rules. Frist, the strata corporation must receive a complaint. Next, the corporation must vie written particulars of the complaint to the relevant owner or tenant and give them reasonable opportunity to answer the complaint, including a hearing if they ask for one. Once the strata corporation has complied with these requirements, it can enforce the bylaws or rule. The strata corporation must set out in its bylaws the maximum amount it may fine an owner or tenant for each violation of a bylaw or rule. If an owner or tenant fails to carry out work to remedy a bylaw or rule violation, the strata corporation can also do the work and charge the person responsible for the reasonable costs of the work. The strata corporation can carry out remedial work on a member's strata lot or on common property or common assets. Owners who rent their strata lots to tenants are vicariously liable for the fines or remedial costs incurred by their tenants. However, if an owner, as landlord, pays a fine or costs levied against their tenant, the tenant is liable to reimburse the landlord for the amount paid.

Answer 60

Bylaw may restrict various activities in a strata lot or on common property. Similarly, rules can restrict the use of common property. A licensee who represents a buyer must check the bylaws and rules, in the case of leasehold strata unit, any Schedule of Restrictions for provisions that could adversely affect the buyer.

Answer 61

Owners may rent their strata lots to tenants unless otherwise restricted. Rental restrictions are found in a strata corporation's amended bylaws and, in the case of a leasehold strata plan, in a Schedule of Restrictions filed with the leasehold strata plan.

Answer 62

RDS Rental disclosure statement is a formed prepared by the owner developer of a strata property containing information about the rental of strata lots that must be filed with BCFSA before the first strata lot is offered for sale. If the developer intends to rent one or more strata lots in Strata Proeprty Act requires the developer to file a Rental D

Answer 63

RDS Rental disclosure statement is a formed prepared by the owner developer of a strata property containing information about the rental of strata lots that must be filed with BCFSA before the first strata lot is offered for sale. If the developer intends to rent one or more strata lots in Strata Property Act requires the developer to file a Rental Statement. The developer must also give a copy of the RDS to each prospective buyer before they enter into an agreement to purchase a strata lot. The term "first owner" describes a person who bought their freehold or leasehold interest in the strata lot from the developer. The term "subsequent owner" describes a person who bought from the first or any later owner. The buyer who enters a contract of purchase and sale to buy a strata lot from a developer may sometimes assign the contract to another buyer. The person who sells their rights under the contract is called the "assignor". The person who purchases those rights is called the "assignee". Support the first buyer, Buyer A, enters a contract of purchase and sale to buy a strata lot from the developer. Assume too that Buyer A (as assignor) then assigns to the second buyer, Buyer B ( the assignee) the right to purchase the property from the developer under that contract.

Answer 64

The Strata Property Act permits a strata corporation to pass a bylaw that restricts the rental of residential strata lots. The bylaw may either prohibit the rental of all residential strata lots or limit the number or percentage of strata lots that may be rented or the period of time for which they may be rented. Rental restriction bylaws do not apply to strata units for one full year following their passage. The one-year grace period only begins on the day the tenant vacates the strata lot.

Answer 65

EXEMPTION FOR FAMILY MEMBERS The Strata Property Act exempts family members from rental restrictions. A bylaw that prohibits or limits the rental cannot prevent an owner from renting a strata lot to a member of their family. EXEMPTION FOR HARDHSIP An owner may apply to the strata corporation for an exemption from a rental restriction bylaw on the grounds that it causes hardship to the owner. While the Strata Property Act does not define the term "hardship", a strata corporation cannot unreasonably refuse the owner's request. EXEMPTIONS DO NOT COUNT TOWARD RENTAL LIMIT Where a strata corporation has a bylaw that limits rentals then, effective, the strata corporation must count toward the limit any rental under the family member or hardship exemptions.

Answer 66

A residential strata owner who intends to rent their strata lot must give the prospective tenant a copy of the current bylaws and rules together with a Notice of Tenant's Responsibilities. The owner must obtain the tenant's signature on the Notice and provide a copy of the signed Notice to the strata corporation within two weeks from the start of the tenancy. If the owner, in their capacity as a landlord, fails to comply with these requirements, the residential tenant can, within 90 days of learning about the landlord's breach of the Act, end the tenancy without penalty by giving notice. If the tenant ends the tenancy in these circumstances, the landlord must pay the tenant's reasonable moving expenses to a maximum of one month's rent. A licensee who, on behalf of an owner, manages a residential rental property in a strata development must be alert to these deadlines because the failure to meet these requirements can be costly.

Answer 67

Strata Property Act permits bylaws that restrict the age of persons who may reside in a strata lot, even though the bylaw might hinder an owner's right to freely sell their strata lot.

Answer 68

Many strata corporations must have amended their bylaws to control pets. A licensee who represents a buyer who wishes to buy a strata lot should always inquire whether the buyer owns any pets because, if so, the buyer will have to carefully review the bylaws for any pet restrictions.

Answer 69

If the strata corporation must carry out a repair, then the general rule requires every strata lot to contribute to the cost of that repair according to the Schedule of Unit Entitlement, unless an exception requires otherwise. Strata lot owners often make upgrades or alterations to their units over time. These alteration can range from simple renovations to more complicated reconfigurations of the living space. Strata corporation bylaws usually contain provisions on altering a strata lot and owners will typically have to sign an indemnity agreement.

Answer 70

As older strata corporations reach the end of their life cycle, the cost of maintenance, repairs and renovation increase significantly, while the land may have increased significantly in value. In these situations, many strata owners, as a single group, may wish to sell the entire property to a developer. Such properties may be attractive to developers to build a new strata development with more units. This would also increase available housing on the market. To proceed with such a sale, strata owners must cancel the strata plan and wind up the strata corporation, which may be done according to sections Strata Property Act.

Answer 71

The Strata Property Act permits a strata corporation to sue persons against whom the corporation has a legal claim, including individual owners. Among other things, a strata corporation may apply to the Supreme Court of BC for an order compelling an owner, tenant or other person to comply with the Act, the regulations, the bylaws or rules. In addition, owners, tenants and others can sue a strata corporation. Person may sue the strata corporation with respect to any matter relating to the common property, common assets, bylaws or rules, or with respect to any act or omission by the corporation. If a person's lawsuit against the strata corporation succeeds, a judgment against the strata corporation is a judgment against all the owners. Every strata lot owner is liable to pay the judgment in the portions set out in the Schedule of Unit Entitlement. The Act does not define the term "interested person". The Strata Property Act also permits arbitration between the strata corporation, owners and tenants if certain are met, as well as for the appointment of an administrator in certain circumstances.

Answer 72

Leasehold landlord is the government, municipality, regional district, First Nation, or other public authority from whom a developer leases land in order to develop a leasehold strata. Ground lease is a lease document (for a term of at least fifty years) that sets out the terms and conditions of a developer's lease of land from a leasehold landlord. Leasehold strata plan is a strata plan submitted by a developer over land covered by the ground lease, that converts the land into individual strata lots and common property. Leasehold tenant is a person registered under a strata lot lease as a tenant of the leasehold landlord, and informally referred to as the "owner" of a leasehold strata lot. Most strata developments in BC are freehold stratas, where the developer, as registered owner of the property, subdivides the land by depositing a strata plan with the land title office. The developer than becomes the registered owner in fee simple of each strata lot, and may then sell or otherwise dispose of the fee simple interest in each strata lot. Buyers of these strata lots obtain a transfer of fee simple title. To begin the process of developing a leasehold strata, the developer will lease the land from the leasehold landlord under a document called a "ground lease", which sets out the terms and conditions of the developer's lease. The ground lease must be for a term of at least fifty years. The developer registers the ground lease as a charge against the leasehold landlord's land. A model strata lot lease must be attached to the ground lease. The strata plan filed by the developer is called the "leasehold strata plan". The deposit of the leasehold strata plan converts the parent parcel into individual strata lots and common property. Deposit of the strata plan triggers two other important events. First, the land title office issues new fee simple titles in the name of the leasehold landlord for each of the strata lots created. Second, the ground lease is converted into individual strata lot leases between the leasehold landlord and the developer for each strata lot. A buyer (leasehold tenant) is deemed to have agreed to observe the terms of the strata lot lease, and is not bound by any term in the ground lease that is not in the strata lot lease.

Answer 73

Schedule of Restrictions is a list of restrictions, registered at the land title office with the leasehold strata plan, that imposes further leasing, assignment or occupancy of strata lots in a leasehold strata plan. So, what interest does the developer have to sell? The developer cannot sell a fee simple interest. It can only sells its interest as a leasehold tenant under the strata lot lease (a contract). The transfer of a party's contractual rights to another person is known as an assignment. As such, the developer assigns its leasehold interest to the buyer. In other words, the buyer becomes the leasehold tenant of the leasehold landlord's fee simple interest. The buyer registers that interest as the "leasehold tenant", as a charge against title to the strata lot. In practical terms, the title of strata lot will show a lease registered in favor of the buyer with a notation that the buyer took an assignment of the original strata lot lease in favor of the developer. As a leasehold tenant, the buyer is purchasing an interest under the existing lease. This means that the buyer acquires exclusive possession of the strata lot for the balance of term remaining under the strata lot lease, plus the value of any improvements constructed by the developer on the strata lot. With each passing year, the term remaining diminishes. The leasehold tenant may in accordance with the strata lot lease, "sell" or assign its leasehold interest, and that buyer acquires the lease rights for the balance of the term. A leasehold landlord may impose restriction on the further leasing, assignment of occupancy of the strata lots included in the leasehold strata plan. The restriction must be set out in a Schedule of Restrictions filed in the land title office when the leasehold strata plan is deposited. The restrictions are binding on the strata corporation and everyone who buys a leasehold interest in any of the strata lots. Licensees involved in the sale of a leasehold strata lot should always check for the presence of a Schedule of Restriction registered with the strata plan. During the term of the lease, leasehold strata lot owner, like freehold strata lot owners will be responsible for strata fees, any special levies passed by the strata corporation, and annual property taxes. However, unlike with fee simple strata ownership, leasehold strata lot owners may have additional rent obligations, as set out in the strata lot lease. Depending on the terms of the lease, the rent may either be paid by regular rent payment throughout the lease, or may be prepaid. If the lease requires ongoing payment of rent, there is normally a rent review clause that allows the leasehold landlord to periodically adjust the rent. This may trigger a substantial increase and could catch uniformed leasehold tenants by surprise.

Answer 74

At the end of the lease term, the leasehold landlord will choose whether or not to renew the lease. The leasehold landlord must inform the leasehold tenant at least one year prior to the lease expiry of its election to renew or not renew the lease. Any renewal must be for a period of at least five years on the same terms, except rent and length of renewal term. A new rent will be established by the landlord pursuant to the Strata Property Act, and is subject to arbitration. Additionally, if the landlord fails to give notice of non-renewal at least one year before expiry of the strata lot lease, the default outcome is an automatic five-year renewal of the lease. Alternatively, the leasehold landlord may choose not to renew the lease. In this case, the leasehold landlord must purchase the leasehold tenant's interest in the strata lot. According to the Strata Property Act, the purchase price is either to be calculated according to the formula provided in the strata lot lease, if anu, or failing that, in schedule filed with the strata plan. If the strata lot lease is silent and no schedule exists, the Strata Property Acy requires the leasehold landlord to pay the fair market value of the leasehold tenant's interest in the strata lot calculated in accordance with the regulations, as if the strata lot lease did not expire.

Answer 75

Cooperative ownership is a form of property ownership whereby owners possess shares in a non-profit corporation that holds title to the land, including any building, and whereby owners of these shares are entitled to lease a unit of the building from the non-profit corporation.

LESSON 4 Flashcards

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