Condominium Act: Unresolved Issues #276

Oct 19, 1997

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By Gerry Neely
B.A. LL.B

Completion of the revisions to the Condominium Act will be delayed, according to the Ministry of Finance and Corporate Relations, to allow for a further discussion of the major five following issues.

The major issue is one raised by the owners of larger strata lots who argue that expenses should be shared equally by all owners, because the present method of sharing common expenses, based upon lot size, is inequitable. Examples such as landscaping, strata management services and recreational facilities are expenses which the proponents of this argument state have little or no relationship to lot size.

The opposing view is that since lot size also determines an owner's share of the common property, a larger lot owner may obtain a greater benefit from the common property expenditures. In addition, opponents say that the owner of a small lot may have bought it precisely because of the lower monthly assessment, which would be increased if expenses were shared equally.

The options suggested to the Ministry, which it is reviewing, are these:

  1. Require equal sharing of all expenses for both existing and future strata corporations. This is one option that cannot be seriously considered, since it would create its own inequities because of the expenditures that do depend upon lot size.

  2. The second alternative would allow the owners to approve, by a 75% majority or higher, a change to equal sharing.

  3. A third option is to define by legislation those expenses that bear little or no relation to lot size, which would be shared equally.

  4. A further suggestion would combine several alternatives based upon the equal sharing of services, which are provided at equal cost to all lots, but payment for the actual cost of services which vary with lot size.

  5. Another option is to change the voting structure to give larger lots more votes.

  6. The final option is to narrow the spread between the largest and smallest lots by fixing a dollar or percentage cap. If monthly expenses are $200 for the larger lot, and $100 for the smallest lot, the largest lot would continue to pay $100 more than the smallest lot. Once the base of $100 has been established, any future expense increase would be shared equally. (How would the monthly fees of the in-between lots be calculated?)

The next issue concems age bylaws, which are opposed by those who say that they restrict affordable housing options available to families who want to own their own homes. This corncern, together with the different court decisions as to the right of a strata corporation to enact age bylaws, leads to the suggestion that the right to pass age bylaws be prohibited. The exception to this would be the seniors condominiums which adopt a 55 years of age or over rule.

Rental restriction is a further issue, based upon the argument that this restricts the supply of rental accommodation and limits the flexibility and mobility of condominium owners. Those who favour rental restrictions say that absentee owners do not actively participate in management, or have the same interests in the condominium as do resident owners.

The suggestions to effect a compromise include requiring that a minimum number or percentage of lots may be rented at any one time, or; to grandfather all current rentals which could be rented indefinitely, whether the current tenants leave or stay; or allowing investment owners a period, such as one year, to adjust their affairs.

The final issue concerns complaints about the practice of non-resident owners giving their proxies to one person, often the strata manager, who may hold sufficient proxies to prevent resident owners from exercising control over their own homes. The alternatives which are suggested to deal with this problem are to restrict voting rights of non-resident owners, either entirely or only on matters involving the budget. The other option is to restrict the number of proxies one person can vote. Either of these proposals appear to address effectively the concern of the resident owners. If implemented, they would have a negative effect upon the marketing and ownership of condominiums, particularly recreational condominiums.

Comments on the above issues and proposals should be sent, before November 15th, 1997, to:

Financial and Corporate Sector Policy Branch Ministry of Finance and Corporate Relations P.O. Box 9418, Stn. Provincial Government Victoria, BC V8W 9VI Further information for those intending to comment is available on the Ministry's Internet site at: http://www.fin.gov.bc.ca/FCSPB/condo.htm

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