Should strata rental-re­stric­tion by­laws be banned in B.C.?

Times Colonist - - Islander - HAR­VEY WIL­LIAMS

It has been pro­posed that the Strata Prop­erty Act be amended so that strata cor­po­ra­tions can no longer re­strict rentals.

The ar­gu­ments in sup­port of the ban are that 1) it will in­crease the avail­abil­ity of af­ford­able rental hous­ing and 2) that the mar­ket price of strata units will in­crease to the ben­e­fit of res­i­dent own­ers. Both of those ar­gu­ments can­not be true. Just as a ris­ing tide lifts all boats, a ris­ing de­mand for stratas will lift prices of all stratas, in­clud­ing rental units.

British Co­lum­bia leg­is­la­tion uses the plu­ral noun “strata” for con­do­minium. A strata cor­po­ra­tion can com­prise one or more apart­ment blocks, town­houses, bare land or any com­bi­na­tion of the three.s

Strata cor­po­ra­tions do not re­strict rentals on a whim. A 75 per cent favourable vote by el­i­gi­ble vot­ers at a gen­eral meet­ing of own­ers is re­quired to ap­prove a rental re­stric­tion by­law.

Le­gal fees and re­lated costs for draft­ing and reg­is­ter­ing a rental­re­stric­tion by­law of­ten ex­ceed $500, a sig­nif­i­cant ex­pen­di­ture not taken lightly by most strata cor­po­ra­tions.

Stratas own­ers adopt rental-re­stric­tion by­laws be­cause: 1) rentals re­duce the pool of own­ers will­ing and able to serve on strata coun­cils and com­mit­tees; 2) in­vestor-own­ers are much less in­volved in the day-to-day man­age­ment of their stratas, leav­ing res­i­dent own­ers to look af­ter their in­vest­ment prop­erty; 3) in­vestor-own­ers are of­ten dif­fi­cult to com­mu­ni­cate with and might even de­mand that all com­mu­ni­ca­tion be through a local rental-prop­erty man­ager. Some in­vestor-own­ers in­sist that their home ad­dresses not be avail­able to res­i­dent strata own­ers, which vi­o­lates Sec­tions 35 and 36 of the Strata Prop­erty Act.

En­force­ment of by­laws and rules is of­ten dif­fi­cult with renters be­cause renters are of­ten un­aware of or do not care about strata by­laws and rules.

Res­i­dent own­ers bear the bur­den of man­ag­ing the strata’s fi­nances, look­ing af­ter main­te­nance of the strata prop­erty, and en­forc­ing strata by­laws and rules while an ab­sen­tee in­vestor-owner en­joys the pro­ceeds of his or her in­vest­ment. The Strata Prop­erty Act pro­hibits strata cor­po­ra­tions from charg­ing in­vest­ment own­ers a fee for man­ag­ing their units.

Not to be over­looked is the ef­fect of for­eign in­vest­ment on the strata mar­ket. Un­der Canada’s In­vestor Visa Pro­gram, a for­eigner in­vestor can ob­tain per­ma­nent res­i­dency for them­selves and their im­me­di­ate rel­a­tives by in­vest­ing $800,000 for five years, the price of a cou­ple of strata units in many strata com­plexes.

More­over, there is the al­leged use of real es­tate as a ve­hi­cle for laun­der­ing the pro­ceeds of il­le­gal ac­tiv­i­ties.

If I were pur­chas­ing a unit in a small strata com­plex, say fewer than 30 units, a rental-re­stric­tion by­law would be a plus. If I were pur­chas­ing in a strata com­plex of be­tween 30 and 50 units, a re­stric­tion on the num­ber of rental units might be at­trac­tive. Above 50 units, rental re­stric­tions would not likely be an is­sue. Har­vey Wil­liams of Vic­to­ria is a past­pres­i­dent of the Van­cou­ver Is­land Strata Own­ers As­so­ci­a­tion and cur­rently a mem­ber of the VISOA’s sup­port team for strata own­ers. VISOA has never adopted a po­si­tion for or against the rental of strata units. This com­men­tary is based on what he and his col­leagues have heard from thou­sands of strata own­ers over many years.

Work con­tin­ues on a 106-unit con­do­minium com­plex at 989 John­son St. Rental re­stric­tions would not likely be an is­sue with com­plexes of more than 50 units, sug­gests Har­vey Wil­liams, past-pres­i­dent of the Van­cou­ver Is­land Strata Own­ers As­so­ci­a­tion.

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