[October 21, 2022]
On September 28, 2022, NDP leadership candidate, David Eby, announced that if he becomes premier, he will address housing affordability in BC. Two of the measures in his housing plan are to remove a strata corporation’s ability to have rental restriction bylaws, and eliminate all age restriction bylaws except “seniors only”. After reading this article, consider sending your comments on these proposed changes to David Eby, your MLA, and VISOA.
Currently under the Strata Property Act
Age restriction bylaws: Section 123 of the Strata Property Act says a strata corporation may pass a bylaw that restricts the age of persons who may reside in a strata lot. Some stratas have age bylaws that allow only residents who are 19+, 45+ or 55+ etc, however under the current legislation the bylaw can state any age.
Rental restriction bylaws: Most stratas constructed on or after January 1, 2010, allow unlimited rentals. This is because the rental disclosure statement (Form J) issued by the developer generally states that all residential strata lots can be rented for a period that expires in 100 or more years.
Strata plans filed prior to January 1, 2010 are allowed to create rental restriction bylaws, however the bylaws don’t apply to strata lots designated as rental strata lots on a Rental Disclosure Statement (Form J) until that permission expires under section 143 of the Strata Property Act (SPA). Per section 141, the strata corporation is not permitted to screen tenants, establish screening criteria, require the approval of tenants, require the insertion of terms in tenancy agreements, or otherwise restrict the rental of a strata lot except as provided in subsection (2). This section allows the strata corporation to have bylaws that prohibit the rental of residential strata lots, limit the number or percentage that may be rented, and limit the period of time they may be rented. For example the bylaws might allow up to 10% of the residential lots to be rented or a maximum period of 5 years, or both. The bylaws must set out the procedure to be followed by the strata corporation in administering the limit, such as a wait list.
There are currently exemptions to allow rentals to certain family members or in cases of hardship. See SPA sections 142 and 144.
Under sections 147 and 148, an owner may assign some or all of their powers and duties to their tenant including the right to vote at annual and special general meetings and run for election to serve as a council member.
David Eby’s proposed changes
Age restriction bylaws: Based on David Eby’s housing plan and media interviews, the proposed changes would still allow a strata corporation to have or pass a bylaw that restricts the age of persons who may reside in a strata lot to “seniors only” (55+). However his plan says that 19+ age restrictions would not be permitted. Presumably any existing bylaws stating 19+ or otherwise prohibiting children, or setting age limits other than 55+ would be unenforceable as they would contravene the SPA.
Rental restriction bylaws: Based on David Eby’s housing plan and media interviews, the proposed changes would eliminate section 141 such that no strata would be allowed to have or create bylaws that prohibit or restrict rentals. This would apply to all existing and new stratas, and any existing bylaws restricting rentals would be unenforceable as they would contravene the SPA. Other sections of the SPA would likely be removed as they would be rendered moot.
What strata owners are saying
Many strata owners have written to us expressing their disappointment, frustration, anger and outrage at these proposed changes, particularly the changes related to rentals. Here are just a few of their reasons for opposition:
Not a solution to housing shortage
“I would like a factual explanation as to how such a move would increase the availability of rental properties in BC, given that there are virtually no [pre 2010] stratas with vacant units.”
“Your logic is flawed…The buildings without rental restrictions have the highest vacancy rates of 18-24%, which may be due to high volume of people using units for speculation or Airbnb. Properties with rental bylaws average a vacancy rate of 0-4%…Removing our no rentals bylaw would do nothing to ease our Province’s housing problem.”
“There is only one way to solve a housing shortage and that is build more. Reshuffling owner/rental will not make more.”
“The only people who will benefit from removing these restrictions are corporations and the wealthy who can afford to build a rental portfolio…This proposal will do nothing to alleviate the current house shortage.”
Impact on strata operations and governance
“As a self managed strata the day to day management is time consuming and the addition of rental management would be untenable. We already have difficulty recruiting people to sit on the strata council.”
“What a ridiculous way to try to solve housing. Do you want to volunteer on my strata council? Not too many will step up anymore if that goes through.”
“We are sorely in need of more, not less, help to run [our strata] effectively. Any renters are not likely to volunteer their time and effort to garden, paint, manage contracts, sit on Council, or any other of the time consuming management chores that we take on.”
“Over 26,000 active strata corporations are under 25 units, which represents over 76% of all stratas in BC. These strata corporations rarely have professional management due to the high cost and difficulty finding brokerages willing to take on smaller clients. Effectively downloading the management of rental properties to volunteer council members is unreasonable and grossly unfair.”
“Good luck getting landlords to serve on council. Legally we can’t function without the minimum number of council members. How many small stratas will be forced into applying to the Supreme Court for an administrator?”
“Even if you change the Residential Tenancy Act to allow stratas to “appear” at the Residential Tenancy Branch, you are imposing a long stressful process on untrained volunteers. Time they should be focussing on operations and maintenance. You say it will be at the cost of the unit owner/landlord but in reality there are always costs that the strata can’t recover. This is so unfair to all the other owners.”
“It is already difficult to recruit council members and if the number of rental units is expanded [council] will find themselves acting as building managers for absentee landlords.”
“It is difficult in a small strata complex to find residents willing to serve on council in the best of circumstances. Having to deal with renters and absentee landlords just adds another layer of complexity to an already unappealing task.”
Housing affordability
“Why would you place aspiring first-time home buyers into that competition, their limited dollars against the deeper pockets of an [investor]?…Using the logic of your own government, it is a simple step to realize they drive up the prices for otherwise affordable strata housing.”
“An unintended consequence, will be the erosion of existing affordable housing.”
“Increased costs are unfair. Stratas with 25% or higher rental units pose an unmanageable risk as rented units have significantly more insurance claims. As a result, the strata’s premiums are generally higher. Property management companies also charge more to manage strata corporations that have rented units. Given that the strata corporation receives no compensation from landlords it is unreasonable for the strata corporation to incur higher expenses.”
“We are too small to afford a professional property management company…The principal reason [for prohibiting rentals] is the practicality of having enough resident owners to share the significant responsibility of managing the Strata and building.”
“We have worked hard to build our community over the past 30 years. It is difficult enough with aging seniors to have people step up to serve on Council as invested owners, so allowing rentals will only serve to have a more transient population, increase our insurance fees and will hinder our efforts to provide a self managed community.”
“Insurance companies are asking [strata] corporations to provide the breakdown of owner occupied and non-owner occupied units. They have said the this may impact our insurance [premiums] in the future.”
“Quite frankly we are surprised that your proposed changes affecting Stratas does not take into consideration the impact on Strata insurance [increased claims].”
Impact of speculation
“The available units will be bought up by developers thereby removing possible seniors housing in a community with limited options for seniors to downsize into.”
“Some investors attempt to purchase 21% or more units with the intent of controlling future use, development, and preventing a price uplift on property value when the corporation is considering a windup. Where rental bylaws exist, developer/buyers generally avoid these tactics as they are left holding property from which they cannot generate any revenue.”
“It would over time, result in a deterioration of strata properties as investors try to maximize profits by spending less each year on maintenance.”
“Pay attention to the potential problems that your suggested policy may cause for thousands of buildings and owners: e.g. such as speculation, taking control of a building and lowering maintenance and improvements in order to increase profits, and the burden it would put on strata councils.”
“If you open us up to rentals, I am concerned that units would be bought by speculators, thus destroying our close community and reducing the ability of the Council to govern.”
Democratic principles
“The governance of strata corporations should be left to the owners who have invested in them.”
“I chose my building because it did not allow rentals. I feel this is very heavy handed and intrusive of the government.”
“I am outraged that you are trying to overturn years of careful planning…the security I planned for in my later years, and the peace and quiet that I think I deserve after working hard and paying taxes for almost 50 years.”
“On the matter of stripping away legislated rental restriction bylaws that a strata corporation has democratically voted to approve (by a 3/4 vote of owners), border not only on ‘outrageous’ but completely ill informed…[council] are not landlords but too often end up having to take on that role, with no one to back us up…This is my home, not a place of business nor a purpose-built rental apartment.”
“Such an initiative would seem to go against the NDP’s historical stance on enshrining Canada’s democratic principles.”
What you can do
If you have thoughts on these proposed changes, submit your comments to David Eby, your MLA, and VISOA.