Strata Management (22:VII): Difference between revisions
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== A. Introduction to Strata Management == | == A. Introduction to Strata Management == | ||
The most common type of management of a strata corporation in British Columbia, and the primary focus of this section, is a professional, third-party strata manager who is licensed by | The most common type of management of a strata corporation in British Columbia, and the primary focus of this section, is a professional, third-party strata manager who is licensed by BC Financial Services Authority (BCFSA) and bound by the provisions of the [https://www.bclaws.gov.bc.ca/civix/document/id/complete/statreg/04042_01 ''Real Estate Services Act'', SBC 2004, c 42] [''RESA''] and the [https://www.bclaws.gov.bc.ca/civix/document/id/lc/bcgaz2/v64n15_209-2021 ''Real Estate Services Rules'', BC Reg 209/2021] [''RES Rules'']. This manager is contractually engaged by a strata corporation to provide “strata management services” as defined in section 1 of ''RESA''. | ||
Less commonly, in other cases, strata corporations can choose to be self-managed with no licensing requirements. | Less commonly, in other cases, strata corporations can choose to be self-managed with no licensing requirements. Section 2.17 of the [https://www.bclaws.gov.bc.ca/civix/document/id/complete/statreg/10_506_2004 ''Real Estate Services Regulation'', B.C. Reg. 506/2004] [''RES Regulation''] permits an unlicensed individual to provide strata management services to a maximum of two strata corporations to which the person is an owner. | ||
=== 1. Definition of Strata Management === | === 1. Definition of Strata Management === | ||
Neither the ''SPA'' nor the ''SPR'' provide definitions for the term “strata management”, but there are references to the term in each. For example, | Neither the ''SPA'' nor the ''SPR'' provide definitions for the term “strata management”, but there are references to the term in each. For example, section 37 of the ''SPA'' and section 4.3 of the ''SPR'' both refer to the strata management as “providing the strata management services”. | ||
== B. The Contractual Relationship == | == B. The Contractual Relationship == | ||
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=== 1. Power and Capacity of a Strata Corporation to Contract === | === 1. Power and Capacity of a Strata Corporation to Contract === | ||
Section 2(2) of the ''SPA'' states that a strata corporation has the power and capacity of a natural person of full capacity. This includes the ability to enter into contracts in respect of its powers and duties under the ''SPA'', the ''SPR'', and the bylaws. Therefore, the strata corporation is permitted to enter into contracts for the provision of strata management services. | |||
=== 2. Contract Decisions === | === 2. Contract Decisions === | ||
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=== 3. Termination of Strata Management Contract === | === 3. Termination of Strata Management Contract === | ||
Section 39.1 of the ''SPA'' permits a strata management contract to be terminated by a strata corporation on two months’ notice if the cancellation passes a ¾ vote at an annual or special general meeting, regardless of any termination provisions in the strata management contract. The other party can terminate on two months’ notice without prior approval. | |||
Section 39.2 clarifies that the only time a ¾ vote is not needed by the strata corporation to cancel a contract is when the contract could be terminated according to its terms if they are not onerous. | |||
Within four weeks of the termination of a contract, | Within four weeks of the termination of a contract, section 37 confirms that the person(s) providing strata management must return the strata corporation’s records, subject to a $1,000 penalty if they do fail to do so per section 4.3 of the ''SPR''. | ||
== C. Role of the Strata Manager == | == C. Role of the Strata Manager == | ||
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Unless specifically stated otherwise, a strata manager acts as an agent of the strata corporation, authorized to act on the strata corporation’s behalf when dealing with other parties, issuing forms and records, and entering into contracts. | Unless specifically stated otherwise, a strata manager acts as an agent of the strata corporation, authorized to act on the strata corporation’s behalf when dealing with other parties, issuing forms and records, and entering into contracts. | ||
The common law has developed duties that an agent (strata manager) owes to its principal (strata corporation), referred to as fiduciary duties. | The common law has developed duties that an agent (strata manager) owes to its principal (strata corporation), referred to as fiduciary duties. Sections 56 and 58 of the ''RES Rules'' give examples of those fiduciary duties in the disclosure of renumeration and disclosure of the nature and extent of benefits in relation to rental property management services and strata management services. | ||
Further, | Further, section 30 of the RES Rules set our requirements for a “brokerage” and its “related licensees”, in this case the strata manager, when providing services to a client. Sections 33 and 34 add additional requirements to act honestly and with reasonable care and skill when providing real estate services, respectively. | ||
=== 3. Strata Management Correspondence === | === 3. Strata Management Correspondence === | ||