REPAIRS

Generally speaking, the responsibility to carry out a repair is divided between the strata corporation and the individual owners of the strata lots, depending whether the repair in question involves common property, limited common property (LCP), or part of a strata lot

Carrying Out a Repair

-In the case of common property, section 72 of the Strata Property Act and sections 8(a) and (b) of the Standard Bylaws place the sole responsibility for carrying out the repair work on the strata corporation, unless the regulations specifically provide otherwise.

-In the case of LCP that an owner is entitled to use, section 8(c) of the Standard Bylaws in the Act requires the strata corporation to carry out the work for repair and maintenance that ordinarily occurs less often than once per year; the owner must perform the repairs on any portion that isn’t otherwise the responsibility of the strata corporation.

-the strata corporation is always responsible for repairing the following, no matter how often the repair or maintenance ordinarily occurs:

• the structure of a building;

• the exterior of a building;

• chimneys, stairs, balconies and other things attached to the exterior of a building;

• doors, windows and skylights on the exterior of a building or that front on the common property; and

• fences, railings and similar structures that enclose patios, balconies and yards.

Paying For a Repair

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 corporation bylaws usually contain provisions on altering a strata lot (e.g., section 5 of the Standard Bylaws) and owners will typically have to sign an indemnity agreement

-The indemnity agreement may require the owner, as well as any potential buyers, to assume full responsibility for any alterations.

-If the alterations were carried out without the strata corporation’s consent, the owner or buyer (after they purchase the strata lot) may be forced to remove the alteration.

Cancellation of a Strata Plan and Winding Up of a Strata Corporation

-As older strata corporations reach the end of their life cycle, the cost of maintenance, repairs and renovations 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.

-To proceed with such a sale, strata owners must cancel the strata plan and wind up the strata corporation

-a resolution passed by an 80% vote at an annual or special general meeting, and an order from the British Columbia Supreme Court approving the sale, is required.

LEGAL PROCEEDINGS

-The Strata Property Act permits a strata corporation to sue persons against whom the corporation has a legal claim, including individual owners

-owners, tenants and others can sue a strata corporation.

-The expense of defending the suit is shared by all of the owners according to the Schedule of Unit Entitlement.

-However, an owner who is suing the strata corporation is not required to contribute to the corporation’s defence.

-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. However, an owner who obtains a judgment against the strata corporation does not have to contribute, as an owner, to paying that judgment.

-an owner or tenant can apply to the court to prevent or remedy a significantly unfair exercise of voting rights by a person who holds 50% or more of the votes, including proxies, at a general meeting.

LEASEHOLD STRATAS

-An alternative to freehold strata is leasehold strata, which may be utilized by developers for land that they cannot purchase in fee simple, but nevertheless want to develop

-leasehold landlord: the government, municipality, regional district, First Nation, or other public authority from whom a developer leases land in order to develop a leasehold strata

-Depending on the leasehold landlord, leasehold stratas may be dealt with slightly differently. Tfollowing discussion is largely based on leasehold stratas with the City of Vancouver:

-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”: 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: a strata plan submitted by a developer over land covered by a ground lease, that converts the land into individual strata lots and common property

-Deposit of the strata plan triggers two other important events.

1. First, the land title office issues new fee simple titles in the name of the leasehold landlord for each of the strata lots created.

2. Second, the ground lease is converted into individual strata lot leases between the leasehold landlord and the developer for each strata lot.

-leasehold tenant: 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; not bound by any term in the ground lease that is not in the strata lot lease.

Selling and Owning a Leasehold Strata

-The developer cannot sell a fee simple interest. It can only sell 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.

-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.

-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 the term remaining under the strata lot lease, plus the value of any improvements constructed by the developer on the strata lot.

-The leasehold tenant may, in accordance with their 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 restrictions on the further leasing, assignment, or occupancy of the strata lots included in the leasehold strata plan.

-Schedule of Restrictions: 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

-leasehold strata lot owners, 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

-the Home Buyer Rescission Period does not apply to leasehold interests in residential real property or to residential real property that is located on leased land

Expiry of the Lease Term

-At the end of the lease term, the leasehold landlord will choose whether or not to renew the lease

-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

-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.

-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.

-If the strata lot lease is silent and no schedule exists, the Strata Property Act 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,

-converting the project to freehold: section 216 of the Strata Property Act permits the leasehold landlord to transfer fee simple title for each of the strata lots to their respective leasehold tenants.

-This may only happen if the leasehold landlord transfers fee simple title of each strata lot to every respective leasehold tenant. After all the leasehold tenants have bought their respective strata lots, the development continues like any other freehold strata development.

STRATA TITLES COMPARED WITH COOPERATIVE CORPORATIONS

cooperative ownership: 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

-Cooperative ownership differs from strata title ownership in that it does not bestow an individual fee simple title to the cooperative owner’s unit.

-Instead, the owner in a cooperative possesses shares in a non-profit corporation. This corporation in turn holds title to the land.

-The organizers of the cooperative then determine what number of shares in the cooperative corporation will be allocated to each unit.

-These shares, once allocated to specific units, are then sold to buyers. A buyer of shares allocated to a particular unit thereby becomes entitled to lease that unit from the cooperative association.

-The right to occupy will be for either a very long specified period of time, or until the buyer, in turn, sells the shares.

-The cooperative corporation is the landlord and the shareholders are tenants of the corporate landlord.

-Since the cooperative owner does not own an estate in land other than their leasehold interest, financing of a cooperative purchase may be more difficult.

-In addition to paying rent, the cooperative owner also pays their proportionate share of the cooperative association’s monthly mortgage payment.

-Both cooperatives and condominiums can involve leasehold land.

-Typically, a cooperative association’s board of directors (analogous to the strata council) must approve the person who proposes to buy a cooperative owner’s shares, and the proposed sale of those shares will be subject to the board’s approval.