British Columbia Enacts Significant Changes to the Strata Property Act

In December of 2009, the Province enacted several changes to the Strata Property Act (the “Act”). Some of the key changes which take effect January 1, 2010 include:

1. Special Levies: Strata corporations must account for funds raised by special levy, separately from other strata funds. The strata corporation must invest those funds in investments permitted by the regulations or in insured accounts with savings institutions in British Columbia. They may also charge interest on money owed and outstanding by strata owners per a special levy. As a result, the strata corporation will be able to register liens against a strata lot for interest owing due to late payment of the levy. Lastly, some special resolutions fail where a bare majority but not a ¾ super-majority of strata owners vote to assess a special levy to repair or replace common assets. In such instances the Act now permits the strata corporation to apply to either Provincial or Supreme Court, not later than 90 days from the vote, for an order authorizing the special levy be assessed and the repairs go forward, irrespective of the failure to achieve the requisite ¾ vote.

2. Rental Restrictions: Under the new provisions, new strata corporations would not be able to change rules about rental units that impact the rights of owners and purchasers or the marketability of the units. Owners would be able to continue to rent their units until the date the rental period originally defined by the developer in the Form J Rental Disclosure Statement expires. Existing strata owners do not benefit from these changes.

3. Age Restrictions: The Act now grants strata corporations the express authority to pass bylaws restricting the age of persons who may reside in a given strata lot.

In addition, look for the following provisions in the Act to be brought into force later in 2010:

1. Audited Financial Statements: The Act will require that the strata corporation’s financial statements be audited. Owners and purchasers reviewing the statements will know they are materially correct and conform to generally accepted accounting practices. This audit requirement may be waived by a ¾ vote of the strata owners.

2. Depreciation Reports: Strata corporations will be required to obtain regular depreciation reports (a “Report”). The Report must estimate repair and replacement costs for major items in the strata corporation, as well as the expected lifespan of those items. Owners may waive this requirement by a 3/4 vote. Strata corporations must disclose the Report in a Form B request made by owners or purchasers or their representatives.

3. Changes to Dispute Resolution: Under the former provisions of the Act most Strata disputes were required to be submitted to the B.C. Supreme Court for resolution. Under the new provisions, many of these same disputes may proceed in Provincial Court.

4. Form B Information Certificates: In addition to requiring that the Form B details the most recent depreciation report, the new provisions of the Act will require that the Form B detail which parking stalls and storage lockers are allocated to a particular strata lot.

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