Dear Condo Smarts: When we bought our condo from the developer in 2007, we were advised by the sales person that the developer had filed a form required by the Strata Property Act that would exempt us from rental bylaws. Our strata council concurred with this for the past five years.
In 2009, the owners adopted a rental restriction bylaw that limited the number of rentals authorized under the bylaw to five strata lots.
Our newly elected strata council has taken the view that the rental disclosure statement does not apply once a rental bylaw is filed, and that it only applies to the developer.
We are confident that the exemption is valid, but are asking if you could explain the rental disclosure exemption process in your column so our new council can easily understand it.
Pamela B., West Vancouver
Dear Pamela: Under the Strata Property Act, strata corporations are permitted to adopt bylaws that limit the number of rentals or the percentage of rentals.
The bylaw must also identify the procedure in administering the limit.
There are three different exemptions:
– Family members, who are identified as children or parents of the owner or owners’ spouse;
– Hardship rentals, granted under section 144 of the Act;
– Strata lots that are identified and exempted under section 143 of the Act, which relates to the ownerdeveloper exemption created by a rental disclosure statement.
Where a strata corporation was created and the strata plan was filed prior to Jan. 1, 2010, the ownerdeveloper was entitled to file a rental disclosure statement that set out a period of time and identified specific strata lots that were intended to be rented.
It is necessary to read each RDS to confirm it identifies the strata lots being exempted and the time period the expemption covers.
For the strata lots that are exempted in this time period, only the first purchaser who had the strata lot conveyed from the owner developer is exempt. A period of time may have included the phrase “indefinite,” but even that has a finite period for most owners, because the strata lot would eventually be sold or transferred to a subsequent owner or heir.
For strata corporations filed and created on or after Jan. 1, 2010, the law on exemptions is very different.
The period of time must now include a specific date, setting out the exemption period and expiry, as required by the Form J, but the exemption itself is different.
The exemption applies not to the first purchaser but to the strata lot and, as a result, any owner or subsequent owner in that time period is exempt until the expiry date posted.
The strata corporation is required to retain a copy of the filed rental disclosure statement, which is filed with the Superintendent of Real Estate through the Financial Institutions Commission.
The strata council for Pamela’s building provided me with a copy of the form, and despite what Pamela was told by a sales person, the RDS did not grant an exemption to anyone.
Pamela and other owners similarly affected will need to seek legal advice on what was intended and how the units were sold to them originally.
In both sections where it identifies the number of units to be rented or intending to rent, it only shows “nil” and it does not list any strata lots that are exempt.
If you are buying a new strata lot or considering a presale purchase agreement, confirm in writing in the contract that an RDS that meets the requirements of the Strata Property Act for an exemption will be or is included with the filed disclosure statement.
Source: The Vancouver Sun