The Strata Plan (22:IV)
|This information applies to British Columbia, Canada. Last reviewed for legal accuracy by the Law Students' Legal Advice Program on July 24, 2023.|
A. Common Property
1. What Constitutes Common Property
On a strata plan, all space within the strata development’s land parcel that does not fall within a strata lot is common property. All strata lot owners own this common property as tenants in common, proportionally to their respective unit entitlements.
In a conventional strata plan, common property would typically consist of the space outside the buildings, as well as any circulation, utility, and common areas within the buildings like amenities, lobbies, and elevators.
In a bare land strata plan, common property is typically limited to roadways, utilities, and common facilities. If the strata lots completely envelop the buildings situated on the bare land strata plan, the common property would consist of the grounds, leaving strata lot owners with significant control over aspects of their respective buildings such as building designs and finishes.
2. Decks, Patios, and Balconies
Decks, patios, and balconies may be shown on the strata plan as either part of a strata lot, undesignated common property, or limited common property. Typically, the strata corporation is responsible for repairing and maintaining decks, patios, and balconies under its bylaws regardless of how they are designated.
Due to section 14.2 of the SPR, the following are excluded from counting towards the “habitable area” formula of unit entitlement when they form part of a strata lot:
- Parking stalls;
- Storage areas other than closet space.
When these structures are designated as common property, section 71 of the SPA would require a ¾ vote at an annual or special general meeting before the strata corporation may make a significant change in their use or appearance: see Frank v The Owners Strata Plan LMS 355, 2016 BCSC 1206.
3. Building Systems
When utility systems serve multiple strata lots or the common property, they are considered common property, even when located within a strata lot. These are not shown on the strata plan, and it can be difficult to delineate where common property starts and ends. For instance, see Fudge v Owners, Strata Plan NW2636, 2012 BCPC 409, where the court held that a washing machine discharge pipe found inside a strata lot was nevertheless common property due to being integrated with the building’s wastewater collection systems.
A building component that only serves one strata lot despite being located outside the lot’s boundaries may nevertheless still be common property if it is a fixture at common law. If the component is sufficiently attached to the building, and the intention behind its attachment is more for the better use of the building rather than for facilitating its own use, the component may be a fixture at common law: see La Salle Recreations Limited v Canadian Camdex Investments Limited,  BCJ No 421 (QL), 1969 CanLII 740 (BC CA). For instance, a heat pump attached to common property for the benefit of only one strata lot may nevertheless be classified as common property: see Warren v The Owners, Strata Plan VIS 6261, 2017 BCCRT 139.
Section 72 of the SPA allows bylaws to make an owner responsible for limited common property that they have the right to use, but not undesignated common property except as permitted in the SPR. Thus, a fixture found on limited common property may be an individual owner’s responsibility, but a fixture found on undesignated common property is unlikely to be any individual owner’s responsibility. The courts have ruled that section 72 does not prevent a strata corporation from assigning responsibility for common property to entire sections: see Norenger Development (Canada) Inc. v Strata Plan NW 3271, 2018 BCSC 1690.
If such a building component is not a fixture, such as being insufficiently attached to the building or being primarily attached to facilitate its own use, it may instead be considered a chattel owned by the strata lot owner. The responsibility to repair and maintain falls on the owner, although the strata corporation may have authority to remove it under its bylaws, subject to the prohibition against significantly unfair action: see Estrin v The Owners, Strata Plan LMS3758, 2023 BCCRT 350.
B. Parking and Storage Facilities
Issues arising from parking stalls often arise from how owner developers allocate stalls for sale.
When a strata lot contains one or more parking lots, the strata lot may be subject to strata fees, special levies, property taxes, other municipal levies, and municipal business licensing regulation.
Since January 1, 2014, strata corporations are required to disclose an Information Certificate, Form B of the SPR, listing which parking stalls and storage lockers have been allocated to a strata lot to prospective buyers of a strata lot. Parking is often contentious, depending on how parking stalls are designated and allocated.
1. Common Property
If parking is common property, the strata corporation has the authority to allocate stalls. The strata corporation must review and renew this allocation annually under section 76 of the SPA. This authority is limited by the strata corporation’s bylaws, and allocations that are significantly unfair to any strata lot owner may be challenged. This authority does not enable the owner developer to sell additional stalls.
2. Limited Common Property Designated on Strata Plan
If parking is designated on the strata plan as limited common property for a given strata lot, that strata lot owner has the full right to use the parking stall in accordance with the bylaws. This designation can only be modified by an amendment to the strata plan, which requires unanimous consent of all the owners.
3. Leases and Licenses of Parking Stalls
Often in larger developments where parking stalls have higher value, the owner developer makes the first allocation of parking stalls by granting a 99-year lease to an entity they control. With each strata lot initial purchase, the owner developer grants licenses or partial lease assignments to the purchaser. When an owner sells their strata lot, the new purchaser must receive not only a transfer of the strata lot, but also a further assignment of the parking stall lease or license. As a result, the owner developer retains control of the parking stalls, even past the first annual general meeting.
Such an arrangement of parking stall leases and licenses may not be evident from the strata plan or the common property record, as they are typically not registered in the Land Title Office to minimize property transfer tax. Instead, the owner developer must disclose the arrangement as part of their disclosure statement under the Real Estate Development Marketing Act, SBC 2004, c 41.
Note that for leases entered into before the strata plan is deposited, the SPA section 80 requirements for the strata corporation to approve of common property disposal do not apply. This is because strata corporations do not exist before their strata plan is deposited. Once the strata plan is deposited, the strata corporation assumes the role of landlord under any pre-existing parking stall lease arrangements.
Although the bylaws do not need to refer to the lease arrangement, provisions may include:
- A requirement for the strata corporation to place before the owners a resolution to designate stalls as limited common property for the owners with lease assignments or licenses from the owner developer;
- A requirement for the strata corporation to maintain a register of parking stalls allocated by lease assignments or licences from the developer.
Surface parking can only be placed in the owner developer’s control by licence, not lease. This is because sections 73 and 73.1 of the Land Title Act, RSBC 1996, c 250 [LTA] forbid the assignment of leases of land that is both less than the entire legal parcel and not for the purpose of leasing a building or part of a building. Because a license does not create an interest in land, the strata corporation may revoke such a parking stall licence without needing to provide notice to the strata lot owner.
Section 20 of the LTA raises questions about whether this common practice of unregistered parking stall leases is enforceable. In Hill v Strata Plan NW 2477 (Owners), 2 BCAC 289, 1991 CanLII 529 (BC CA), the court ruled that an owner developer could not arrange with a particular owner for the exclusive use of common property; despite being a case on the Condominium Act, it continues to be applicable to the SPA (The Owners, Strata Plan VIS 3437 v Townsite Marina Ltd., 2018 BCCRT 166). In TownsiteMarina Ltd. v The Owners, Strata Plan VIS3437, 2018 BCSC 2160 at paras 27 to 28, the BC Supreme Court recognized that such a practice has some acceptance, “possibly even a consensus,” among legal practitioners as valid, although the court also ultimately left the question open.
4. Parking Stalls and Storage Lockers as Part of Strata Lot
A parking stall or storage locker may appear on the strata plan as part of a strata lot. Parking stalls that are part of a strata lot may be leased or licensed by the owner of the strata lot.
When a parking stall is part of a residential strata lot, the parking stall is excluded from unit entitlement calculations due to the definition of “habitable area” from section 14.2 of the SPR. Because unit entitlement calculations for non-residential strata lots use the total area of the lot, parking stalls would be counted in that strata lot’s unit entitlement calculation.
C. Schedule of Unit Entitlement
Unit entitlement is the basic measure of a strata lot’s share in the strata corporation’s common property, common assets, common expenses, and liabilities. Depending on the asset or liability, a strata lot’s share may be determined by dividing the lot’s unit entitlement by the sum of all unit entitlements in the strata corporation, or by the sum of all unit entitlements in a smaller subset of strata lots affected by the matter.
A Schedule of Unit Entitlement (Form V of the SPR) must be filed in the Land Title Office with each strata plan. Older strata plans that have not yet been amended under the SPA have the Schedule of Unit Entitlement as Form 1.
Unless modified, unit entitlement determines the following:
- The ownership interest of each strata lot owner in the common property and common assets (SPA, s 66);
- The liability of each owner for judgments against the strata corporation (SPA, s 166);
- The contribution of each owner to the strata corporation’s operating fund and contingency reserve fund (SPA, s 99; SPR, ss 11.2 – 11.3);
- The contribution of each owner to a strata corporation’s expenses that relate solely to a section (SPA, s 195; SPR, ss 11.2 – 11.3);
- The contribution of each owner to special levies (SPA, s 108);
- The owner developer’s share of expenses attributable to common facilities of earlier phases of a phased strata plan, until later phases are deposited (SPA, 227).
The mechanisms that can override or modify the application of unit entitlement include:
- Unanimous votes under section 100 of the SPA;
- Establishing sections;
- Bylaws establishing distinctions between types of strata lot;
- Sections 6.4, 6.5, 11.2, and 11.3 of the SPR;
- Situations where using unit entitlement is significantly unfair.
1. Changing Unit Entitlement
In scenarios such as enclosing decks and converting crawlspaces and attics into living space, a strata corporation may seek to amend the Schedule of Unit Entitlement. However, the SPA only provides a few circumstances in which that amendment is possible:
- For a residential strata lot: an application to the BC Supreme Court under section 246(7);
- For a residential strata lot: a unanimous vote to amend the Schedule of Unit Entitlement under section 261;
- For either type of strata lot: a filing under s 264, as consequential to certain fundamental changes to the strata plan:
- a) Adding to, consolidating, or dividing a strata lot (SPA, s 259);
- b) Making land held by the strata corporation into a new strata lot (SPA, s 262);
- c) Adding a strata lot to common property (SPA, s 263).
If the Schedule of Unit Entitlement allocates expenses in a significantly unfair manner to one or more strata lot owners, the court or the CRT may make an order under section 164 of the SPA to allocate some or all expenses using a different method: see Strata PlanVR1767 (Owners) v Seven Estate Ltd., 2002 BCSC 381, Southern Interior ConstructionAssociation v Strata Plan KAS 2048, 2007 BCSC 792, and Klassen v The Owners, Strata Plan LMS 1710, 2022 BCCRT 705.
In King Day Holdings Ltd. v The Owners, Strata Plan LMS3851 (Re), 2018 BCSC 1772 (affirmed in 2020 BCCA 342), the court overturned two special levies for being significantly unfair to King Day Holdings Ltd., even though the levies were passed by the respondent strata corporation at its annual general meeting.
Ultimately, it is rare that a strata corporation dividing expenses by unit entitlement will create significantly unfair results. This is because the fact that an owner must contribute towards expenses that do not benefit them is insufficient by itself to constitute significant unfairness: see Smith v The Owners, Strata Plan KAS 2503, 2023 BCCRT 146.
Strata corporations are required to disclose such court judgments in their Information Certificates under section 59(3)(j) of the SPA, although the judgment binds purchasers even if the Information Certificate fails to disclose this information.
D. Schedule of Voting Rights
By default, section 53 of the SPA governs voting in a strata corporation, giving each strata lot one vote. This cannot be overridden using bylaws.
If the strata corporation contains at least one non-residential unit, a Schedule of Voting Rights, Schedule W of the SPR, may be filed to determine the voting rights of strata lot owners and override section 53. On older strata plans that have yet to be amended under the SPA, the Schedule of Voting Rights is found on the strata plan as Form 3.
For strata corporations that only contain residential strata lots, a Schedule of Voting Rights may only be filed following certain strata plan amendments in accordance with section 264 of the SPA.
1. Mixed Residential/Non-residential Strata Plan
By default, section 53 of the SPA gives every strata lot one vote in a strata corporation containing both residential and non-residential strata lots. Under section 247(2)(a) of the SPA, the owner developer may, without needing approval, file a Schedule of Voting Rights that conforms to the following formula:
- Each residential strata lot gets one vote;
- The number of votes that each non-residential strata lot gets is equal to its unit entitlement divided by the average (mean) unit entitlement of all the residential strata lots.
This Schedule of Voting Rights has the following effect:
- The residential strata lots have equal voting power;
- The ratio of total residential votes to total non-residential votes is equal to the ratio of total residential unit entitlement to non-residential unit entitlement;
- Non-residential votes are allocated between non-residential strata lots according
to unit entitlement.
The Superintendent of Real Estate may approve a Schedule of Voting Rights that allocates votes on some other basis, as long as they are satisfied that the distribution is fair (SPA, s 248). An owner developer might pursue this kind of Schedule of Voting Rights to ensure a certain bloc of strata lot owners has enough voting power to defeat resolutions requiring ¾ approval.
E. Land Title Office Records
The Land Title Office maintains a common property record (SPA, s 252) and a strata plan general index (SPA, s 250) for each filed strata plan. Before 1995, these documents were found in the strata plan itself.
1. Common Property Record
The common property record tracks interests and transactions concerning the common property separately from the strata lots. It contains an endorsement with respect to the following:
- Any charge or interest that separately charges the common property;
- Any freehold disposition of common property (SPR, s 14.14);
- Any designation of limited common property under section 74 of the SPA (SPR, s 14.14);
- Any removal of a limited common property designation under section 75 of the SPA (SPR, s 14.14).
2. General Index
The general index records certain documents that the SPA requires to be deposited in the Land Title Office along with the strata plan. Some of these documents were part of the strata plan itself under previous legislation. The general index contains an endorsement with respect to the following:
- The Schedule of Unit Entitlement and any amendments to it;
- The Schedule of Voting Rights and any amendments to it;
- The strata corporation’s mailing address;
- The bylaws filed by the owner developer, and any amendments to them;
- Amalgamation agreements under section 269 of the SPA;
- Orders of the registrar under section 276 of the SPA, or of the Supreme Court under section 279 of the SPA;
- Any resolutions required to be filed in the Land Title Office by the SPA or the SPR;
- Any freehold disposition of common property;
- Any designation of limited common property under section 74 of the SPA;
- Any removal of a limited common property designation under section 75 of the SPA;
- Any other document required to be filed in the Land Title Office that is not endorsed in other Land Title Office records.
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