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