The Abc Of Condo Renting

Corporate Bylaws Example - The Abc Of Condo Renting

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Buyers of condominiums in British Columbia may wish to know whether they have a right to rent their strata lot or whether they may be subjected to a rental restriction or prohibition bylaw. Buyers who purchase strata lots as an speculation will by all means; of course need to know this facts before they remove the conditions precedent and finalize their offers. Unfortunately, since the change that has taken place in the Province on January 1, 2006, which was intended to interpret the matter of who was going to be subjected to a rental restriction, things seem to have come to be more confused than ever. Someone else example of 'Your Tax Dollars At Work' to use perhaps the most widely recognized government slogan in the Province of British Columbia.

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Corporate Bylaws Example

Lawmakers in Victoria have confused things so much, that now not only nobody knows who's under a rental restriction bylaw - nobody even knows when the right to pass any such bylaw exists. So therefore, time has come to clear up things a little bit. Who knows, if I'm lucky perhaps they are going to offer me a job as the official examiner of the legal mambo-jumbo lawmakers typically seem to be so fond of dishing out to the rest of us.

Historical Background

Under the old Condominium Act if a Strata Corporation passed a bylaw prohibiting rentals or restricting the number of strata lots that could be rented out, the developer could continue to rent the number of strata lots shown on the Rental Disclosure Statement. A First Buyer, that is person who was buying the strata lot from the developer, could also rent for the duration of time that the developer intended to rent. It was unclear, in the Condominium Act, whether second or subsequent Buyers could also rely on the Rental Disclosure Statement. Transitional relief for this explication brought forth in the new Strata property Act ,which was legislated in 2000, in case,granted that second Purchasers had a reprieve from a Rental Restriction bylaw until January 1, 2006. Therefore also a second Purchaser could rent a strata lot for the duration of time the developer intended to rent according to the Rental Disclosure Statement, or until January 1, 2006.

January 1, 2006 - The Change

A change has taken place efficient January 1, 2006 in that as of this date only First Purchasers from a developer are exempt from a ental restriction or prohibition bylaw. More specifically, s.17.15 of the Strata property Regulations reads as follows:

"Despite section 143 (2) of the Act, but subject to section 143 (1) of the Act, if a strata lot is conveyed by the first purchaser of the strata lot, and the strata lot was designated as a rental strata lot on a rental disclosure statement in the prescribed form under section 31 of the Condominium Act and all the requirements of section 31 of the Condominium Act were met, a bylaw that prohibits or limits rentals does not apply to that strata lot until the earlier of: (a) the date the rental duration expires, as disclosed in the statement; (b) January 1, 2006."

The consequent of s.17.15 is little only to those circumstances where a Strata Corporation has passed a rental restriction or prohibition bylaw, and Buyers who have not purchased directly from the developer (second Buyers on) have been exempted from the bylaw. As of January 1, 2006 developers and first Buyers continue to be exempt from a rental restriction bylaw if a valid Rental Disclosure Statement has been filed with the Superintendent of Real Estate.

It is leading to understand that under the Strata property Act a Strata Corporation may restrict or prohibit rentals by passing a rental restriction or prohibition bylaw. It is also leading to perceive that if a Strata Corporation passes a bylaw that restricts or prohibits rentals, every strata lot in the amelioration will eventually be subjected to the rental restriction or prohibition unless the strata lot is protected by a Rental Disclosure Statement (Rds).

If the Rds has been filed under the Strata property Act , a rental restriction or prohibition bylaw does not apply to a strata lot that has been included in the Rds until the earlier of a conveyance by the First Purchaser or the expiry of the Rds. At the time the First Purchaser sells the strata lot, even though the Rds has not expired, the security in case,granted by the Rds terminates. This means that all subsequent Purchasers will be subjected to a rental restriction or rental prohibition bylaw.

If the Rds was filed under the old Condominium Act, the new Strata property Act mandates that a bylaw restricting or prohibiting rentals does not apply until the earlier of the expiry of the Rds, a conveyance by the First Purchaser or January 1, 2006 if the strata lot has been conveyed by the First Purchaser. Essentially, this provision was intended to protect developers and First Purchasers until the expiry of the Rds, and subsequent purchasers until January 1, 2006.

To resolve the expiry date of the Rds, one must first acquire it. The Rental Disclosure Statement for a amelioration offered for sale is included as an exhibit to the developer's Disclosure Statement. Thus, when a Buyer is purchasing from the developer, the Buyer is entitled at law to receive a copy of the Rds as part of the Disclosure Statement package. In the ultimate (and unlawful) case that no such exhibit is included in the package, a copy can be obtained from the Office Of The Superintendent of Real Estate.

Finally, a word of advice. Many Buyers look at the bylaws to resolve whether there is a rental restriction or prohibition bylaw in place. If there are no such bylaws, the Buyer may be under the impression that the property he is setting about to purchase is approved as an speculation property. Buyers must clearly understand, that restriction or prohibition bylaws can be passed by the Owners of the Strata Corporation (not by Strata Council) at the every year normal Meeting or any extra normal Meeting. Bylaws of this nature need to be beloved by a 75 percent majority (3/4 vote) of the habitancy gift at the Meeting and entitled to vote, or their proxies.

On occasion, Buyers take ease from the fact that a number of strata lots are owned by investors, and as a consequent believe that there is little likelihood of a rental restriction or prohibition bylaw being approved. This provides fleeting comfort, at best. If a number of investors sell their strata lots, the make-up of the Owners could change very swiftly so that a rental bylaw could be passed. In all cases where Buyers are not protected by the Rds, even though there is no bylaw that limits or eliminates rentals, Buyers must be aware of the possibility that such rental bylaw may be enacted in the future.

There it is. I can hardly imagine anything more transparent and crystal clear than this Article. Whoever said that Real Estate is rocket science?

Luigi Frascati

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