Important Legislative Amendments Affecting Developers and Strata Corporations in British Columbia

March 14, 2023

Written By Mark Lewis, Mandev Mann and Claire Gibson

The Building and Strata Statutes Amendment Act, SBC 2022, c 41 (the Act), which came into effect on November 24, 2022, made several important changes to British Columbia's Strata Property Act (the SPA) in an effort to help address the province's persistent housing issues. The Act amended the SPA by:

• eliminating the requirement for a developer to file a Rental Disclosure Statement (Form J);
• eliminating a strata corporation's ability to:
  • implement age restriction bylaws or screening provisions, other than restricting the age of residents to not less than 55 years;
  • limit the number of strata lots that can be rented; or
  • limit the period of time a strata lot may be rented; and
• allowing a strata corporation to conduct annual and special general meetings remotely.

On January 24, 2023, Order in Council No. 32 brought into force section 5 of the Municipal Affairs and Housing Statutes Amendment Act (No. 2), 2020, SBC 2020, c 16. Amendments to the Strata Property Regulation, BC Reg. 43/2000 (the Regulation) in relation to the contingency reserve fund contributions of developers, strata corporations and sections will come into force on November 1, 2023.

Developers, strata corporations and professional advisors should take care to understand the impact of these effective and proposed changes to the operation of strata developments discussed below.

Rental Disclosure Statements

A developer who rents or intends to rent one or more strata lots in a development is no longer required to prepare a Rental Disclosure Statement (Form J) indicating the number of strata lots to be rented and disclosing any bylaws which restrict rentals. Consequently, a strata corporation is no longer required to maintain these records and developers are no longer required to include a Form J with their disclosure statements (as a result of a concurrent amendment to Policy Statement 1 issued by the Superintendent of Real Estate (BC Financial Services Authority)). The Act also removes the requirement of a strata corporation to disclose the number of strata lots rented in a development to a purchaser or current owner of a strata lot in a Form B Information Certificate.

Age Restriction Bylaws

Strata corporations are now prohibited from implementing age restriction bylaws, other than one requiring residents of a strata lot to have reached an age of 55 years old. However, any new bylaw restricting occupancy to those over the age of 55 years old will not apply to certain individuals, such as residents who lived in a strata lot when such bylaw was passed and live-in caregivers. These changes will apply regardless of any existing strata bylaws and will render any non-compliant bylaws invalid.

Screening Powers

Strata corporations are no longer able to screen tenants, establish screening criteria, require the approval of other tenants, require the insertion of terms in tenancy agreements or otherwise restrict who can rent a residential strata lot.

Rental Restriction Bylaws

Strata corporations are no longer able to implement residential rental restriction bylaws limiting the number of strata lots that can be rented or the period of time for which a strata lot can be rented, except for bylaws restricting short-term accommodation. According to the BC Government's website, this is because short-term rentals are technically licenses to occupy and commercial rather than residential uses, unlike long-term rentals which are governed by BC's Residential Tenancy Act. Any other rental restriction bylaws currently in place will be rendered invalid and will have no effect.

The prohibition on rental restriction bylaws has specific impacts on the applicability of the City of Vancouver's "Empty Homes Tax." Under the Vacancy Tax By-Law No. 11674, a property owner who is prevented from renting out their strata lot due to a restrictive strata bylaw (e.g., one limiting or restricting rentals) that was enacted before November 16, 2016, may qualify for an exemption from the Empty Homes Tax. However, given that such bylaws are now prohibited, this exemption will no longer have any application and the Empty Homes Tax will likely apply to a number of previously exempted residential properties. Neither the provincial Speculation and Vacancy Tax Act nor the federal Underused Housing Tax Act are similarly affected, as neither piece of legislation contains a tax exemption for a strata lot owner who is currently prevented from renting their lot due to a strata rental restriction.

Annual and Special General Meetings

Strata corporations may now conduct annual and special general meetings electronically or by using a hybrid of in-person and electronic means. Strata corporations may also provide for attendance and voting by telephone or other electronic means at such meetings.

Specific procedural requirements for conducting and attending annual and special meetings by electronic means are set out in the Act, which include the requirements of a strata corporation to provide instructions for attending the meeting electronically, to ensure all persons attending the meeting electronically may communicate with each other, and to enable the chair of the meeting to identify whether an electronic participant is an eligible voter.

Despite the bylaws of a particular strata corporation, a voting card is not required to be issued to an eligible voter attending electronically, nor is such a voter entitled or required to vote by secret ballot. There is a four-month transition period (to March 24, 2023) before strata corporations must comply with the new legislative requirements for electronic or hybrid meetings.

Contingency Reserve Fund Contributions

Effective November 1, 2023, the Regulation will be amended to increase the contribution that developers must make to the contingency reserve fund (CRF) for new strata developments (or a new phase of a development) from 5% to 10% of the estimated operating expenses of the interim budget for the development. Developers will also be required to include a CRF contribution of at least 10% of the estimated operating expenses when preparing the interim budgets. The minimum yearly contribution to the CRF for strata corporations and sections will also be increased to 10% of the annual operating expenses, and this change will need to be reflected in all budgets included in an exhibit to a disclosure statement.

If you have any questions about the Act or changes to the SPA or Regulation set out above, please reach out to the authors of this article or a member of our Commercial Real Estate group.

Authors