Strata Property Act Section 164 - Appeals for Relief Against Significantly Unfair Actions #353
By Gerry Neely
Section 164 of the Strata Property Act gives a strata unit owner or tenant the right to challenge an action completed or threatened, or a decision of a strata council that is "significantly unfair" to the owner or tenant. This phrase has been interpreted to mean that the action complained of ". . . had to be burdensome, harsh, wrongful, lacking in probity or fair dealing, has been done in bad faith, and/or has been unjust and inequitable."1 Several owners tried to use this section over the past year and saw mixed results.
An owner of three strata lots in a recreational development planned to build an exclusive fishing lodge. The plans were frustrated by the passage of a strata bylaw that limited the use of all strata lots to residential purposes. After an analysis of the many uses permitted by the pertinent zoning bylaws and the building scheme, both of which were referred to in the Disclosure Statement, the judge decided that the strata bylaw was significantly unfair and could not be enforced against the owner.2
In another case, the owner of a residential strata unit in a strata corporation that limited rentals applied for relief of hardship under sections 144 and 164 of the Strata Property Act. He had been transferred to Europe and was not prepared to sell his unit at a substantial loss. The limited financial information provided by the owner indicated that his employer paid his basic rent in Europe and that he incurred personal expenses of $1,426 per month. The judge concluded the strata council had acted correctly when it decided the owner failed to show that the rental bylaw caused him hardship.3
The following factors have been relevant for consideration by strata councils in decisions involving hardship claims:
- sale value exceeded purchase price;
- units were purchased for investment and tax shelter purposes, which would have been impeded if units could not be rented;
- inability to sell at various prices and the devaluation of the Canadian dollar vis-à-vis the US dollar;
- economic hardship in conjunction with a "leaky condo" issue;
- units listed for 20 per cent less than purchase price; the financing for these units required the owners to put mortgages on their homes as collateral security, and the owners faced financial ruin if the rental income to service the debt ceased;
- substantial decrease in sale value when a ban on rentals was put in place and the value of the unit is a substantial part of the owner's assets; and
- duplication of monthly expenses arising from the maintenance of two homes; applies to all non-resident owners, but only becomes a consideration for a specific owner if the duplication creates hardship that cannot be avoided or afforded.
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