Parking Not Limited Common Property #180

By Gerry Neely
B.A., LL.B.

A sales brochure for a condominium project which consisted of 55 strata lots and 69 parking stalls, stated that each unit was entitled to one parking stall and that an additional stall, if available, would be rented by the strata council to an owner. The purchasers of one unit made it a condition of their offer that the price was to include two stalls, and despite the sales brochure, the offer was accepted by the developer.

The first indication the purchasers had that they might have a problem came at the initial meeting of owners when it was made clear that the additional stalls were common property to be dealt with by the strata council. At a subsequent extraordinary general meeting, a bylaw was passed confirming that the strata council had the power to rent and to fix fees for the rental of additional stalls by owners.

The purchasers petitioned for an order that they were entitled to the exclusive use of the extra stall. They were successful in Supreme Court because the judge held that it would be inequitable to deprive them of the use of the extra stall, and inferred that the extra stall was limited common property. The decision was appealed and the principal issue was whether or not the extra stall remained common property or limited common property.

Under the Condominium Act, an owner/developer may, when the strata plan is tendered for registration, designate areas on the plan as limited common property for the exclusive use of one or more strata lot owners. If this had been done by the developer, the purchasers' exclusive use of the extra stall could not have been changed without the purchasers' consent because a limited common property designation can only be removed by a unanimous resolution of the owners.

The owner/developer's responsibility was to act in the interest of all purchasers of the units until a strata council was elected. An agreement to grant exclusive use of an extra stall reduced the area of common property available to all owners which would affect the investment of each owner, if only marginally. As the judge commented, unless compliance with the Condominium Act is insisted upon, arrangements of this kind could be extended to give exclusive use of other common facilities such as a club house or swimming pool, only to certain owners.¹

***

It's never over until it's over is the thought a licensee must have in mind in the submission of offers for the approval of a judge in a court ordered sale of property in foreclosure. This is one of those rare instances where the offers made by competing parties may become known to each other and trigger a bidding battle.

This occurred in a case where after a discussion with the bank's solicitor, the two persons interested in purchasing the property under foreclosure agreed to deliver sealed envelopes to the solicitor who agreed to place before the court the higher offer. The bids were disclosed to both parties, and as a result, the lower bidder increased her offer through her agent. The judge directed both parties to deliver to him sealed envelopes containing their final offers. When they were opened, the lower bidder had increased her offer further and the sale to her was approved.

The disappointed prospective purchaser brought an action against the successful bidder for breach of contract and against the agents for damages for interference with contractual relations. This claim was based upon the argument that the parties were bound by the agreement which they made with the bank's solicitor. The judge, however said that the primary duty of a court in these circumstances is to ensure that the best possible price is obtained. If the court were to agree that this procedure was acceptable, it would prevent any higher offers being submitted to the court and defeat the purpose of which the court's approval was required. The plaintiff's claim for damages were denied.²

	1.	Hill v. The Owners, Strata Plan NW2477, B.C.C.A. Vancouver Registry CA012112 - July 4,1991.
	2.	Kerr v. Williams,, S.C.B.C. Vancouver Registry #C891552, January 29, 1990.

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