Revision as of 23:04, 24 January 2017

The Strata Property Act, S.B.C. 1998, c. 43, [SPA] and the Strata Property Regulation, B.C. Reg. 43/2000, [SPR] govern strata properties. Persons renting a residential condominium are tenants under the RTA. Such tenants are also subject to Parts 7 and 8 of the SPA. Below is a brief description of the SPA as it relates to landlords and tenants.

A. The Law Under the Strata Property Act

The definition section refers to both “landlord” and “tenant”. A tenant is a person who rents all or part of a strata lot, and includes a sub-tenant, while a landlord can include a tenant who rents to a sub-tenant.

Part 7 of the SPA covers bylaws, rules, fines, and eviction (ss 119 - 138):

s 120 provides for standard form bylaws, which can be amended;

s 123 states that a bylaw prohibiting pets does not apply to a pet already living with a tenant when the bylaw is passed. This section also deals with age bylaws. Tenants can be well-served by reviewing the Human Rights Code to see if the bylaw is enforceable (see s 121(1)(a) of the SPA as it relates to age). Specifically, see section 10 of the Human Rights Code;

s 124 states that bylaws can provide for a voluntary dispute resolution process and statements or documents made only for the purpose of such voluntary dispute resolution cannot be used later at Court or dispute resolution;

s 125 gives the strata corporation the power to make rules governing use, safety and condition of the common property and assets;

s 130 permits fines to be levied if a tenant or his or her guest contravenes a bylaw or rule; see section 133, which speaks to maximum amount of fines. See section 7.1 of the Regulations for maximum amounts. If a strata lot is tenanted, the tenant should be fined;

s 131 provides that the strata corporation may collect fines levied against a tenant from a landlord/owner, but cannot fine the landlord/owner directly. If the landlord/owner pays a fine levied against the tenant, the tenant owes the landlord/owner the amount paid; section 7 of the RTA, sets out “fees” that landlords can charge provided they do not contradict s 131 of the SPA;

s 133 allows for the strata corporation to also recover reasonable costs of remedying a contravention of the bylaws from the person whom they fined pursuant to s 130;

s 134 states that the strata corporation may, for a reasonable length of time, deny a tenant the use of a recreational facility that is common property if the tenant (or guest of the tenant) has contravened a bylaw or rule relating to the recreational facility;

s 135 states that the strata corporation must not impose fines or deny the use of recreational facilities unless the particulars of a complaint have been given in writing and reasonable opportunity is given to answer the complaint, including a hearing if requested by the tenant. The strata corporation must also give prompt notice in writing of any decision it reaches concerning a fine or denial of recreational facility. This is a highly technical section. Often strata corporations do not comply with it very well and technical defenses are available on a close reading of the section and the correspondence on the file;

s 137 permits a landlord to issue a one-month Notice To End Tenancy under RTA s 47 for “a repeated or continuing contravention of a reasonable and significant bylaw or rule by a tenant”; and

s 138 permits the strata corporation to issue a one month Notice To End Tenancy under RTA s 47 for “a repeated or continuing contravention of a reasonable and significant bylaw or rule… that seriously interferes with another person’s use and enjoyment of a strata lot, the common property or the common assets”.

NOTE: As a practical matter, it may be difficult for a Strata Corporation to evict a tenant, despite ss 137-138 because the Residential Tenancy Branch has been unwilling to recognize a Strata as a “Landlord” as defined in the RTA.

Part 8 of the SPA governs “rentals” (ss 139-148):

s 141 permits a strata corporation to pass a bylaw restricting rentals by: prohibiting rentals entirely; limiting the number or percentage of units that may be rented; or limiting the period of time for which units may be rented (i.e. requiring fixed term tenancies);

s 142 provides that “restrictions” do not apply to prevent rental of a unit to a member of the owner’s family; “family” is defined in the Regulations, s 8.1;

s 143 contemplates a “grandfather” clause allowing present tenants to remain until the end of their tenancy;

s 144 permits an owner to apply for exemption from a rent restriction bylaw in cases causing hardship to the owner; “hardship” is not defined, and will depend on the facts of the case. Mere financial difficulty is often not enough;

s 145 provides that if a tenant is renting without knowledge of a rental restriction bylaw, the tenant may end the tenancy agreement without penalty by giving notice to the landlord within 90 days of finding out about the bylaw. Also, the tenant can claim reasonable moving expenses in such a situation to a maximum value of one month’s rent;

s 146 requires a landlord to give a prospective tenant (before renting) a copy of the current bylaws and rules, and a Notice of Tenant’s Responsibilities in the prescribed form (often referred to as a “Form K”. Within two weeks of renting, the landlord must give the strata corporation a copy of the Notice of Tenant Responsibilities signed by the tenant. If the landlord fails to comply with s 146, the tenant is still bound by the bylaws and rules, but may choose to end the tenancy within 90 days of finding out. The tenant can claim reasonable moving expenses to a maximum value of one month’s rent;

s 147 allows an owner to assign to a tenant some or all of the powers and duties of a landlord under the Strata Property Act, but this must be done in writing and copied to the strata corporation; and

s 148 defines a “long term lease” as a lease for a set term of three years or more. Such a lease confers the powers and duties of the landlord onto the tenant for the term of the lease. The landlord must not deal with his or her interest in the strata lot during a long-term lease in a way that would unreasonably interfere with the rights of the tenant.

SPA Form K is a notice of tenant’s responsibilities:

A landlord can force a tenant to sign Form K, which means a tenant must follow the strata bylaws. The landlord must provide a Form K to the tenant. It is important the tenant reads the bylaws before signing, as the tenant may be liable for a contravention.

NOTE: A helpful web site that contains the consolidated SPA, regulations, highlights and information bulletins is available at www.fic.gov.bc.ca/?p=strata_property/index. The web site for the Condominium Home Owners Association of B.C. (CHOA) also holds valuable information at www.choa.bc.ca.

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-XIII. THE COMMON LAW, TENANCIES, AND THE RTA
+The Strata Property Act, S.B.C. 1998, c. 43, [SPA] and the Strata Property Regulation, B.C. Reg. 43/2000, [SPR] govern strata properties. Persons renting a residential condominium are tenants under the RTA. Such tenants are also subject to Parts 7 and 8 of the SPA. Below is a brief description of the SPA as it relates to landlords and tenants.
+=A. The Law Under the Strata Property Act=
-Since a tenancy agreement has elements of both contract and interest in land, privity of contract and privity of estate exists between the parties to the agreement. Covenants relating to either the estate or the agreement are enforceable between such parties. Where either the reversionary (landlord) or the tenant assigns his or her interest, privity of estate only exists between the assignee and the remaining original party. Terms and covenants that run with (touch and concern) the land are enforceable between these parties. One of the more common situations involving a covenant running with the land is where a security deposit is paid to a landlord, and the property is then subsequently sold. After the building is sold to the second landlord, the security deposit obligations carry over to that second person. So a tenant who had lived in the building all along would be able to claim return of his or her security deposit from a new landlord, even though the tenant had originally paid the security deposit to a different person. See s 90 of the RTA regarding covenants that run with the land.
+The definition section refers to both “landlord” and “tenant”. A tenant is a person who rents all or part of a strata lot, and includes a sub-tenant, while a landlord can include a tenant who rents to a sub-tenant.
-A sub-lessee has neither privity of estate nor contract with the head landlord, but is still bound by all the covenants in the original lease.
+Part 7 of the SPA covers bylaws, rules, fines, and eviction (ss 119 - 138):
-Covenants in leases are independent at common law, so that one party’s breach does not relieve the other party of performance obligations, unless the lease is forfeited. The innocent party in a tenancy breach situation is under no duty to mitigate damages under the common law of property. However, s 7(2) of the RTA invokes a clear-cut duty to do so in a residential tenancy (see also RTB Policy Guideline 5: Duty to Mitigate). For commercial tenancies (to which the RTA does not apply) the courts have begun to view them as contracts with all attendant rights and obligations, including the duty to mitigate where the plaintiff is seeking damages under contract (as opposed to property) law; see Highway Properties Ltd. v. Kelly, Douglas & Co. Ltd. (1971), 17 DLR (3d) 710 (SCC). However, there appears to be no duty to mitigate where the landlord does not accept the tenant’s repudiation of the lease, and simply sues for rent as it comes due under the principles of property law. Should this situation arise, clients are strongly advised to consult an experienced lawyer.
+*s 120 provides for standard form bylaws, which can be amended;
-=A. Common Law and Residential Tenancies=
+*s 123 states that a bylaw prohibiting pets does not apply to a pet already living with a tenant when the bylaw is passed. This section also deals with age bylaws. Tenants can be well-served by reviewing the Human Rights Code to see if the bylaw is enforceable (see s 121(1)(a) of the SPA as it relates to age). Specifically, see section 10 of the Human Rights Code;
-Subject to the RTA, the common law respecting landlord and tenant applies (RTA, s 91).
+*s 124 states that bylaws can provide for a voluntary dispute resolution process and statements or documents made only for the purpose of such voluntary dispute resolution cannot be used later at Court or dispute resolution;
-==1. General Effects of Breach of the Agreement==
+*s 125 gives the strata corporation the power to make rules governing use, safety and condition of the common property and assets;
-The common law rules of contract respecting the effect of one party’s breach of a material term on the other party’s performance obligations apply to a residential tenancy agreement (RTA, s 91; see also Chapter 10: Consumer Protection). Thus, material terms are dependent, and the innocent party is entitled to withhold performance. However, withholding rent because a landlord has breached a material term is barred by the RTA. A tenant may withhold rent only as permitted by the RTA.
+*s 130 permits fines to be levied if a tenant or his or her guest contravenes a bylaw or rule; see section 133, which speaks to maximum amount of fines. See section 7.1 of the Regulations for maximum amounts. If a strata lot is tenanted, the tenant should be fined;
-Under contract rules, a party may not be able to repudiate a contract due to another’s breach of a non-material term, but a right of “forfeit” can arise under tenancy common law. Under s 45(3) of the RTA, where the landlord breaches a material term, the tenant may elect to treat the agreement as ended (an Arbitrator may have to decide whether a term is “material”). The landlord may end the tenancy only in accordance with the RTA, because of abandonment, or due to an agreement. The RTA does not abolish the doctrines of privity of estate and contract, but it enables a person having a reversionary interest (i.e. a landlord) and a “person in possession” to enforce against each other all conditions and terms, whether material or not, contained in the tenancy agreement for the possessed rental unit (s 83(4)).
+*s 131 provides that the strata corporation may collect fines levied against a tenant from a landlord/owner, but cannot fine the landlord/owner directly. If the landlord/owner pays a fine levied against the tenant, the tenant owes the landlord/owner the amount paid; section 7 of the RTA, sets out “fees” that landlords can charge provided they do not contradict s 131 of the SPA;
-See also RTB Policy Guideline 8: Unconscionable and Material Terms.
+*s 133 allows for the strata corporation to also recover reasonable costs of remedying a contravention of the bylaws from the person whom they fined pursuant to s 130;
-==2. Status of Other Statutes and Legal Doctrines==
+*s 134 states that the strata corporation may, for a reasonable length of time, deny a tenant the use of a recreational facility that is common property if the tenant (or guest of the tenant) has contravened a bylaw or rule relating to the recreational facility;
-===a) Interesse Termini: Tenant Rights before Possession===
-At common law, where an agreement for lease is entered into, or a tenancy agreement executed, and a tenant has not entered and taken possession, that tenant has only an interesse termini, i.e. contractual rights. The tenant may not exercise rights incidental to the possession of property by suing a person in possession of or upon the rental unit for trespass, assigning, or subletting the rental unit. However, s 16 of the RTA provides that property and contractual rights under a residential tenancy agreement take effect at law from the date specified in the tenancy agreement as the commencement of the term of the tenancy agreement. The tenant may obtain an order respecting his or her right to possess or occupy the rental unit. Problems will arise when another tenant has come into possession; the tenant with the earlier commencement date may prevail over the later tenant, but the tenant in possession will probably be allowed to remain in possession.
+*s 135 states that the strata corporation must not impose fines or deny the use of recreational facilities unless the particulars of a complaint have been given in writing and reasonable opportunity is given to answer the complaint, including a hearing if requested by the tenant. The strata corporation must also give prompt notice in writing of any decision it reaches concerning a fine or denial of recreational facility. This is a highly technical section. Often strata corporations do not comply with it very well and technical defenses are available on a close reading of the section and the correspondence on the file;
-===b) Implied Surrender: Abandonment===
+*s 137 permits a landlord to issue a one-month Notice To End Tenancy under RTA s 47 for “a repeated or continuing contravention of a reasonable and significant bylaw or rule by a tenant”; and
-At common law, a lease may be ended by “surrender” due to conduct of the parties, consistent only with a “merging” of the tenancy interest back into the landlord’s (owner’s) estate. Surrender occurs, for example, where the tenant abandons and the landlord repossesses and re-rents. Generally, no further rent or compensation for the unexpired portion of the tenancy may be claimed on surrender. However, following Highway Properties Ltd. v. Kelly, Douglas & Co. Ltd. (above), claims for lost rentals are allowed, provided the landlord notifies the tenant that the surrender is accepted subject to rights to claim for lost future rent.
+*s 138 permits the strata corporation to issue a one month Notice To End Tenancy under RTA s 47 for “a repeated or continuing contravention of a reasonable and significant bylaw or rule… that seriously interferes with another person’s use and enjoyment of a strata lot, the common property or the common assets”.
-Abandonment is cause for ending a tenancy, but regardless of the wording of the tenant’s notice, or the wording of the acceptance of surrender, or the absence of a notice, abandonment gives rise to the landlord’s duty to mitigate.
+		NOTE:   As a practical matter, it may be difficult for a Strata Corporation to evict a tenant, despite ss 137-138 because the Residential Tenancy Branch has been unwilling to recognize a Strata as a “Landlord” as defined in the RTA.
-===c) Frustration===
+Part 8 of the SPA governs “rentals” (ss 139-148):
-At common law, the doctrine of frustration of contracts does not apply to a conveyance of an estate (e.g. a lease). However, there are cases that have considered how the doctrine might apply to a lease or tenancy agreement where the thing transferred is completely destroyed (e.g. a suite is destroyed by fire or water).
+*s 141 permits a strata corporation to pass a bylaw restricting rentals by: prohibiting rentals entirely; limiting the number or percentage of units that may be rented; or limiting the period of time for which units may be rented (i.e. requiring fixed term tenancies);
-The doctrine of frustration now applies to residential tenancy agreements (RTA, s 92) and commercial leases (Commercial Tenancy Act, s 30). If some unforeseen event occurs that prevents the agreement from being performed, it will be considered to have been frustrated and is thereby terminated at the time of the event. Frustration will rarely be found where the event appears to be largely self-induced (and the result of acts or omissions which might themselves constitute a breach of covenant, e.g. a municipal closure order made pursuant to a fire bylaw where the landlord failed to install sprinklers). If the event is totally self-induced, the perpetrator will not be able to establish frustration. Two factors to consider beyond the normal contract law concerns are: 1) the length of the unexpired term at the time of frustration, and 2) the possibility of an alternative use of the rental unit.
+*s 142 provides that “restrictions” do not apply to prevent rental of a unit to a member of the owner’s family; “family” is defined in the Regulations, s 8.1;
-===d) Mitigation of Damages: Duty to Re-rent===
+*s 143 contemplates a “grandfather” clause allowing present tenants to remain until the end of their tenancy;
-Residential landlords and tenants have a duty to mitigate their damages where either has a claim against the other for losses due to the other’s breach of the agreement (RTA, s 7(2)). Where a tenant ends the tenancy illegally, or vacates or abandons the rental unit other than in accordance with the RTA, the landlord has a duty to re-rent the rental unit at a reasonable price. Failure to do so may result in reduced compensation. See RTB Policy Guideline 5: Duty to Mitigate Loss.
+*s 144 permits an owner to apply for exemption from a rent restriction bylaw in cases causing hardship to the owner; “hardship” is not defined, and will depend on the facts of the case. Mere financial difficulty is often not enough;
-===e) The Right to Distrain the Tenant’s Personal Goods===
+*s 145 provides that if a tenant is renting without knowledge of a rental restriction bylaw, the tenant may end the tenancy agreement without penalty by giving notice to the landlord within 90 days of finding out about the bylaw. Also, the tenant can claim reasonable moving expenses in such a situation to a maximum value of one month’s rent;
-Under the RTA, a landlord has no right to distrain (i.e. seize) a residential tenant’s personal goods for default in rental payment, nor may the landlord seize a tenant’s personal goods to satisfy another claim or demand, unless the seizure is made by a person authorized by a court order or an enactment (s 26(3) and (4)). If a landlord seizes goods contrary to s 26(3), the tenant may apply to the court for an order to return the property, or for a monetary claim for damages. Note that a landlord may distrain the tenant’s goods where the tenant has abandoned the rental unit.
+*s 146 requires a landlord to give a prospective tenant (before renting) a copy of the current bylaws and rules, and a Notice of Tenant’s Responsibilities in the prescribed form (often referred to as a “Form K”. Within two weeks of renting, the landlord must give the strata corporation a copy of the Notice of Tenant Responsibilities signed by the tenant. If the landlord fails to comply with s 146, the tenant is still bound by the bylaws and rules, but may choose to end the tenancy within 90 days of finding out. The tenant can claim reasonable moving expenses to a maximum value of one month’s rent;
-=B. Damages, Debts, Compensation, and Specific Performance=
+*s 147 allows an owner to assign to a tenant some or all of the powers and duties of a landlord under the Strata Property Act, but this must be done in writing and copied to the strata corporation; and
-Where an enforceable term or condition has been breached, a number of remedies are available. The availability of remedies is restricted, however, by the type of breach (i.e. material term, or not) and conduct involved.
+*s 148 defines a “long term lease” as a lease for a set term of three years or more. Such a lease confers the powers and duties of the landlord onto the tenant for the term of the lease. The landlord must not deal with his or her interest in the strata lot during a long-term lease in a way that would unreasonably interfere with the rights of the tenant.
-==1. Termination (Ending the Tenancy)==
+SPA Form K is a notice of tenant’s responsibilities:
-A term’s breach may entitle the innocent party to put an end to the agreement, and either regain possession (landlord) or vacate the rental unit (tenant). Compensation or damages, in addition to termination, may also be available. However, it is risky to assume a breach is fundamental enough to put an end to an agreement, for if the party who makes that assumption is wrong, they may be held to be in breach and liable for damages. It is better to have such matters adjudicated.
+A landlord can force a tenant to sign Form K, which means a tenant must follow the strata bylaws. The landlord must provide a Form K to the tenant. It is important the tenant reads the bylaws before signing, as the tenant may be liable for a contravention.
-==2. Damages==
+NOTE:	A helpful web site that contains the consolidated SPA, regulations, highlights and information bulletins is available at www.fic.gov.bc.ca/?p=strata_property/index. The web site for the Condominium Home Owners Association of B.C. (CHOA) also holds valuable information at www.choa.bc.ca.
-A person suffering loss due to the breach of an express, implied, or statutory term may apply for damages through dispute resolution under s 58(1) of the RTA, or, if not precluded by the RTA, by civil action in Small Claims or Supreme Court. Damages may be available where the tenant harms or destroys property. See RTB Policy Guideline 16: Claims in Damages.
-==3. Debt==
-Under s 6 of the RTA, action for debt may be taken for rent arrears, e.g. where there is an early ending of the tenancy by the tenant and loss of rent.
-==4. Duty to Mitigate==
-Under s 7(2) of the RTA, any time a monetary claim arises between landlord and tenant, both have a duty to mitigate damages (i.e. minimize losses). For example, if a tenant breaks a lease that was for a fixed term of one year, the landlord could sue the tenant for the balance of the rent payments. Nonetheless, the landlord has a duty under s 7(2) to try to minimize his or her loss by re-renting the rental unit as soon as possible, rather than just suing the tenant for the whole year’s rent. See RTB Policy Guideline 5: Duty to Mitigate Loss.
-==5. Compensation==
-An Arbitrator may award “compensation” to an innocent party (a tenant or landlord) who has suffered direct loss due to a “contravention” of the RTA by the other party.
-Persons merely in possession can enforce a covenant or condition of a residential tenancy agreement, take the above action, or be acted against.  Specific performance may also be an applicable remedy. This does not apply to an illegal squatter.
-Section 95 is a penalty section, which states that breaches of the listed sections (mostly landlord breaches) are punishable by fine. While it would appear that there has been little resort to this offence section, it may be prudent to advise landlords of this potential consequence of a breach (see Section X.A.1: Disputes Covered by dispute resolution).
-=C. Class Action=
-A class action is an action taken by one or more persons on behalf of a number of people who have a common interest in that action. Where the matter involves more than one person with a common interest, an order may be made affecting all persons who have the same common interest. Note that for hidden rent increases, the RTB may limit the application of its order to one or more of the affected rental units. If several tenants seek a joint hearing, under the RTA, an Arbitrator may hear the cases jointly without the consent of the landlord.
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Residential Tenancies in Strata Lots (Condominiums) (19:XIV): Difference between revisions

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A. The Law Under the Strata Property Act

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Residential Tenancies in Strata Lots (Condominiums) (19:XIV): Difference between revisions

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A. The Law Under the Strata Property Act

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