The Strata Concept (22:III)
|This information applies to British Columbia, Canada. Last reviewed for legal accuracy by the Law Students' Legal Advice Program on July 24, 2023.|
A. The Strata Property Act
The Strata Property Act, SBC 1998, c 43 [SPA] is the piece of legislation that governs strata housing in British Columbia.
The sections of the SPA are divided into 17 thematic Parts. The following chart roughly summarizes the kinds of provisions found in each of the Parts:
|No.||Part Title||Provisions Contained|
|1||Definitions and Interpretation||Definitions of terms that are given specific meanings in this Act|
|2||The Strata Corporation||Basic provisions about the establishment, responsibilities and governance of a strata corporation|
|3||The Owner Developer||Responsibilities of the owner developer towards a newly established strata corporation, such as holding the first annual general meeting at which the first strata council is elected|
|4||Strata Corporation Governance||Strata councils; contracts made on behalf of the strata corporation; annual and special general meetings; information the strata corporation must give upon request|
|5||Property||Provisions relating to property ownership, such as strata lot boundaries and common property|
|6||Finances||Strata corporation budget and finances, and the owners’ obligation to contribute|
|7||Bylaws and Rules||Enactment, amendment, and enforcement of strata bylaws and rules|
|8||Rentals||Provisions governing strata lot owners who rent their unit to tenants|
|9||Insurance||A strata corporation’s obligation to obtain property insurance|
|10||Legal Proceedings and Dispute Resolution||Lawsuits by or against a strata corporation|
|11||Sections||Creation, administration, and cancellation of strata corporation sections|
|12||Leasehold Strata Plans||Applies to strata plans situated on land leased from a government body or public authority|
|13||Phased Strata Plans||Applies to strata plans where the strata development is constructed in phases|
|14||Land Titles||Relates to a strata corporation depositing strata plans in the Land Title Office|
|15||Strata Plan Amendment and Amalgamation||Relates to a strata corporation amending its strata plans|
|16||Cancellation of Strata Plan and Winding Up of Strata Corporation||Governs the dissolution of a strata corporation|
Many provisions of the SPA mention "the regulations,” which often refers to the Strata Property Regulation, BC Reg 116/2023 [SPR]. The provisions of the SPA can only be fully understood when read in conjunction with the SPR.
At the end of the SPA is the Schedule of Standard Bylaws, which lists the bylaws that would apply to a strata corporation unless it files different bylaws to replace them.
B. Property in a Strata Development
Every strata plan consists of two types of property: strata lots, and common property. Whether property in a strata development is categorized as part of a strata lot or part of common property has several legal implications, such as who is responsible for repair, whether an owner is permitted to make modifications, and the way the strata corporation may enforce bylaws and rules.
1. Strata Lot
The definition of a “strata lot” is simply a lot shown on a strata plan (SPA, s 1(1)). A strata lot may be contained in a building and defined with reference to its walls, ceilings, and floors, as in a conventional strata plan. However, a strata lot may also be defined with reference to a plot of land, as in a bare land strata plan.
2. Common Property
All owners in a strata corporation own the common property as tenants in common. An owner’s share of the common property is determined by dividing the unit entitlement of their strata lot by the total unit entitlement of all strata lots in the strata corporation (SPA, s 66). The responsibility for managing and maintaining the common property generally falls on the strata corporation.
Common property may be designated as limited common property, limiting their use to an exclusive subset of one or more strata lot owners. A strata corporation may also enter into an agreement with an owner or tenant to grant the owner or tenant exclusive use of or special privileges in common property for a limited period.
3. Unit Entitlement
Unit entitlement is a strata lot’s ownership share of the strata corporation’s common property, expenses, and liabilities (SPA, s 1(1)). Unless otherwise agreed at an annual or special general meeting, a strata lot’s unit entitlement is used in several formulas prescribed by the SPA to determine that lot’s required contribution to the strata corporation budget.
Every strata plan must include a Schedule of Unit Entitlement that lists the unit entitlement for each strata lot. Section 246 of the SPA provides three ways that a strata corporation may establish unit entitlement:
- A whole number that is the same for every strata lot;
- In square metres: the total habitable area (for residential strata lots) or the total area (for non-residential strata lots);
- Any other allocation that the Superintendent of Real Estate approves as fair.
For the purposes of unit entitlement, “habitable area” excludes patios, balconies, garages, parking stalls, and storage areas that are not closets (SPR, s. 14.2).
For strata corporations created before July 1, 2000, the Schedule of Unit Entitlement can be obtained as one of the pages of a strata plan. For strata corporations created after July 1, 2000, Schedules of Unit Entitlement are filed separately. Thus, it is first necessary to obtain the general index of the strata plan, and then use the registration number of the Form V to request a copy from the Land Title and Survey Authority.
C. The Strata Plan
Every strata corporation has a strata plan that consolidates its fundamental documents. Among its functions include mapping the physical space of a strata corporation. A strata corporation’s strata plan is valid when filed in the Land Title Office.
Common property may be designated as limited common property, where the common property is reserved for the exclusive use of the owners of one or more strata lots while keeping its designation as common property. How property is designated on the strata plan affects legal rights and obligations, such as who bears the responsibility of repair and the extent to which the strata corporation can control the property.
The legend of a strata plan, generally found on the first or second page, will indicate how different property designations are labelled. The legend would usually also indicate designated areas such as balconies, patios, parking spaces, and elevators.
2. Bare Land Strata Plans
A bare land strata plan is a strata plan that is defined with reference to land survey markers rather than floors, walls, or ceilings (SPA, s 1(1)). A bare land strata plan will not depict buildings located within a strata lot, including if the building existed when the bare land strata plan was created. However, a bare land strata plan will depict buildings located on common property.
3. Phased Strata Plans
A phased strata plan is used for strata developments that are constructed in stages. In such a strata development, the land is divided into multiple segments containing one or more strata lots, and each segment is constructed in sequence. As each segment is completed, the phased strata plan would add the new strata lots to the original strata corporation, rather than create a new strata corporation every time a strata plan is filed in the Land Title Office.
The SPA allows strata plans to be amended. For example, strata lots can be added, divided, or combined. Common property can be incorporated into a strata lot, and a strata lot can be incorporated into common property. Designations of limited common property can be added or removed.
A strata corporation can designate common property as limited common property without needing to amend the strata plan. It is only necessary to file a sketch plan.
D. Bylaws and Rules
Strata corporations must have bylaws, as required by section 119 of the SPA. Bylaws may provide for the control, management, maintenance, use, and enjoyment of the strata lots, common property, and common assets of the strata corporation. They may also govern the administration of the strata corporation (SPA, s. 119).
1. Standard Bylaws
All strata corporations automatically adopt the Standard Bylaws except to the extent that different bylaws are filed in the Land Title Office (SPA, s 120(1)). This applies to all strata corporations created after July 1, 2000.
The Standard Bylaws are listed in the Schedule of Standard Bylaws, found at the end of the SPA.
2. Amending Bylaws
A strata corporation can make changes, deletions, or additions to its bylaws, including Standard Bylaws (SPA, s 126). Bylaw amendments must be approved at an annual or special general meeting, and do not take effect until they are filed in the Land Title Office (SPA, s 128). A strata corporation must inform owners and tenants of any approved bylaw amendments as soon as feasible (SPA, s 128 (4)).
The required threshold to approve bylaw amendments depends on the types of strata lot that make up the strata corporation (SPA, s 127):
- In a strata plan composed only of residential strata lots, amendments must be passed by a ¾ vote.
- In a strata plan composed only of non-residential strata lots, amendments must be passed by a ¾ vote unless another threshold is provided for in the bylaws.
- In a strata corporation containing both types of strata lots, amendments must be approved by both the residential owners and the non-residential owners: the residential owners must pass the amendments by a ¾ vote, and the non-residential owners must pass the amendments by either a ¾ vote or an alternative threshold if provided for in the bylaws.
3. Unenforceable Bylaws
A bylaw is unenforceable if it does one or more of the following (SPA, s 121(1)):
- Contravenes any law or enactment, such as the SPA or the SPR;
- Destroys or modifies an easement created under section 69 of the SPA;
- Prohibits or restricts the right of an owner of a strata lot to freely sell, lease, mortgage or otherwise dispose of the strata lot or an interest in the strata lot.
The third restriction does not apply to bylaws governing activities relating to the sale of a strata lot, although the bylaw still must not prohibit or unreasonably restrict those activities. Bylaws that restrict the posting of “for sale” signs or the holding of open houses are specifically allowed (SPA, ss 121(2)(b), 122).
There are some further restrictions on the enforceability of bylaw amendments. For example:
- A bylaw that restricts pets cannot apply to any pet that, at the time the bylaw was passed, was already living with a resident without contravening any prior pet prohibition bylaws (SPA, s 123(2));
- A bylaw that restricts the age of strata lot residents is unenforceable, unless the bylaw is a requirement for one or more persons living in a strata lot to be aged 55 or older. Similarly to pet prohibitions, such a bylaw cannot apply to any person who, at the time the bylaw was passed, was already living in a strata lot without contravening any prior age restriction bylaws (SPA, ss 123.1, 123.2(a));
- An age restriction bylaw also cannot apply to any caregiver who resides in a strata lot for the purpose of caring for a person who requires caregivers due to disability, illness, or frailty (SPA, s 123.2(b)).
People with certain relationships with “specified residents” are also exempt from age restriction bylaws. Section 7.01 of the SPR defines the term “specified resident” to mean a resident of a strata lot who has either reached the minimum age in an age restriction bylaw, or whose eligibility to live there is grandfathered by section 132.2(a) of the SPA. An age restriction bylaw must not apply to the following classes of people:
- A person under 19 years of age whose caregivers include a specified resident;
- A person 19 years of age or older
- a) whose caregivers while they were under 19 years of age include a specified resident, and
- b) who currently resides with the specified resident;
- A person who is married to or in a marriage-like relationship with a specified resident.
As primarily governed by section 125 of the SPA, a strata council can create rules, which function similarly to bylaws. Some key differences include:
- Rules can only govern the use, safety, and condition of common property and common assets, and therefore cannot govern the management, control, or use of a strata lot;
- In the event of a conflict between a bylaw and a rule, the bylaw prevails;
- A rule expires at the first annual general meeting after its creation, unless it is ratified by a majority vote at that annual general meeting or at a prior special general meeting. A ratified rule remains in force indefinitely until it is repealed, replaced, or amended;
- A strata corporation can only fine up to $50 for a breach of a rule, in contrast with the larger maximum fine for a breach of a bylaw (SPR, s 7.1(a)).
The strata corporation must inform owners and tenants of any new rules as soon as feasible (SPA, s 125(4)).
E. Strata Property Parties and Duties
1. The Strata Corporation
A strata corporation has the duty to manage and maintain the common property and common assets for the benefit of the owners. This includes repairing common property, as well as maintaining property insurance on common property, common assets, buildings shown on the strata plan, and certain fixtures.
A strata corporation must also perform its financial and administrative duties. This includes:
- Paying common expenses;
- Establishing operating and contingency reserve funds;
- Maintaining financial and other records;
- Holding general meetings;
- Enforcing the strata corporation’s bylaws.
A strata corporation has the power to enter into contracts, sue, and be sued. The Business Corporations Act, SBC 2002, c 57 does not apply to strata corporations except as otherwise provided for in the SPA (SPA, s 291).
The powers and duties of a strata corporation are initially performed by the owner developer, and afterwards, by the strata council.
2. The Strata Lot Owners
The members of a strata corporation are the owners of the constituent strata lots. From section 1(1) of the SPA, by default an owner is either one of the following:
- The person registered in the Land Title Office as the freehold owner (whether in a personal or representative capacity);
- The leasehold tenant in the case of a strata lot in a leasehold strata plan.
The main way in which owners govern a strata corporation is by electing the strata council at each annual general meeting. Furthermore, the SPA requires certain decisions to be approved by the owners, with various thresholds ranging from majority vote to unanimous consent. For example, a proposed budget must be approved by the owners with a majority vote (SPA, s 103), whereas approval for a special levy requires at least ¾ consent (SPA, s 108). For these decisions, the strata council is unable to act on their decision-making power alone, allowing for owners to provide more direct input.
Section 27 of the SPA allows for owners to direct the strata council or restrict its powers and duties by passing a resolution by majority vote at an annual or special general meeting. However, such a modification cannot force the strata council to act in a way that contradicts the SPA, the SPR, or the bylaws. Such a resolution is also subject to a few other limitations that protect a strata council’s power to determine responsibility for cases of breaches of bylaws or rules.
The courts have not recognized other mechanisms for owners to direct the actions of strata councils: see Enefer v The Owners, Strata Plan LMS 1564, 2005 BCSC 1866 and Nomani v The Owners, Strata Plan LMS 3837, 2007 BCSC 276.
3. Strata Lot Tenants and Occupants
“Tenant” means a person who rents part or all of a strata lot, including subtenants; “occupant” means anyone besides an owner or tenant who occupies a strata lot (SPA, s 1(1)).
A strata corporation may fine an owner for bylaw or rule violations by tenants and occupants of their strata lot (SPA, s 130). It may also be possible for the strata corporation to enact bylaws making owners liable for tenant damage more generally.
4. Sections Within a Strata Corporation
Part 11 of the SPA enables strata corporations to establish sections, which create smaller corporate structures nested within the strata corporation. Sections act as smaller governance structures that represent groups of owners within a strata corporation that share similar interests due to owning similar types of strata lot.
From section 194 of the SPA, a section is a corporation, the provisions of the SPA generally applying to them as if they were strata corporations. Accordingly, some of their powers include:
- Creating a budget to which their owners must contribute;
- Entering into contracts;
- Suing or being sued;
- Enforcing bylaws and rules.
A section can only be created to group strata owners along the following categories (SPA, s 191):
- Owners of residential strata lots and owners of non-residential strata lots;
- Owners of non-residential strata lots that have significantly different purposes;
- Owners of different types of residential strata lots.
The different types of residential strata lots that may be grouped into a section are as follows (SPR, s 11.1):
- Apartment-style strata lots;
- Townhouse-style strata lots;
- Detached houses.
The owner developer can create sections if, at the time the strata plan is deposited, the owner developer also files bylaws that provide for the creation and administration of the section.
After a strata corporation is created, the owners can amend the bylaws to create sections by approving a resolution by both of the following thresholds:
- ¾ of all eligible voters in each of the proposed sections; and
- ¾ of all eligible voters in the strata corporation overall.
5. Strata Managers
From its capacity to enter contracts, a strata corporation can enter into contracts with management companies to carry out duties that otherwise must be carried out by strata council members. Strata managers are agents of the strata corporation.
F. Kinds of Strata Lot
Strata lots can be designated as residential, or otherwise be non-residential. A strata development may have a mix of both types of strata lots.
Whether a strata lot is designated as a residential strata lot is significant. For example:
- Bylaw amendments must be approved by a ¾ threshold among both residential strata lot owners and non-residential strata lot owners;
- Designation of strata lots as residential also determines the way sections may be formed in the strata corporation;
- Whether a strata lot is a residential strata lot determines how the unit entitlement is calculated, ultimately determining the lot owner’s share of common assets and expenses.
“Residential strata lot” is defined as a strata lot that is designed or intended to be used primarily as a residence (SPA, s 1(1)). There is no definition of a non-residential strata lot, so it would simply be a strata lot not designated as a residential strata lot. However, whether a strata lot is a residential strata lot might not be clear in some cases.
The designation of a strata lot depends in part on the strata development’s zoning permissions. However, zoning is not sufficient by itself to determine whether a strata lot is a residential strata lot for the purposes of the SPA: see East Barriere Resort Limited v The Owners, Strata Plan KAS1819, 2017 BCCA 183 at para 46, where the BC Court of Appeal ruled that the residential intention or design behind a strata lot must be interpreted using the documents at and around the strata corporation’s creation, although the applicable zoning regulations are a useful aide for that interpretation.
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