The old adage – good fences make for good neighbours – is of such unalloyed truth as to be accepted as gospel. In the context of strata developments a similar truism could be said to exist – good bylaws make for good neighbours.
A common difficultly that arises is the issue of sharing common expenses between neighbouring owners, particularly when only a certain segment of owners may derive a benefit from the contributions of all the owners in a strata development.
In British Columbia, the general principle is that all owners are “in it together” regardless of who benefits. The classic example is that of a leaking condo unit where all owners are required to contribute costs of repair for an affected owner(s), despite perhaps living in another area of the building and who have not experienced water issues themselves.
While the togetherness approach serves as the default principle in high density living arrangements, the Strata Property Act recognizes that this is not always fair and allows strata corporations to make rules to address such inequality. The Strata Property Act provides for the creation of strata lots by “type” and/or by “section” in the context of sharing common expenses amongst owners.
Common expenses of strata lots based on “type” (i.e. townhouse vs. apartments) permits contribution and allocation of budgeting expenses that benefit strata owners of that particular strata lot “type” exclusively.
Common expenses of strata lots based on “sections” operate in similar fashion to “types” with the exception that “sections” are separate legal entities, and accordingly afforded broader measures of governance. “Sections” have the power to create an executive council, enact bylaws and budgets, enter into their own contractual arrangements and generally have dominion over all affairs of that particular “section.” In essence, “sections” operate like a mini strata corporation.
The reason for this distinction is simple. Different styles of strata lots may have unique features that demand additional maintenance and expense. For example, a strata corporation may enact a bylaw declaring that owners of townhouse units in a mixed use residential facility (i.e. comprised of both townhouses and apartments) must contribute maintenance fees for a swimming pool utilized by townhouse owners exclusively. Or, a strata corporation may require apartment owners to contribute costs associated with maintaining elevator service, or other utilities within the apartment complex.
For many owners defining strata lots by “type” or by “section” is largely unimportant so long as it is clearly defined in the bylaws and everyone contributes equally.
For prospective and existing owners, it is imperative to understand what arrangements are in place. Key questions to ask include:
- Do the bylaws recognize different types of strata lots? (i.e. townhouses vs, apartments?, residential vs. non-residential?)
- If so, how are the strata lots defined? (by “type” or by “section”)
- Do the contributions relate to and benefit one type of strata lot only?
Similarly, strata corporations must be vigilant in drafting bylaws, or amending existing bylaws, to ensure that these questions appropriately reflect the corporation’s intention while complying with the Act. However a strata corporation may choose to define strata lots it must ensure that only those owners of that particular “section” or “type” contribute. Anything less and the strata corporation risks having those bylaws being legally unenforceable.
For additional information on this topic or other strata matters contact Brent Coyne by email at [email protected] or phone at 250-869-1227.
