Is It Time To Review The Strata Property Act?

Here is an extract from the record of a recent phone call to our office:

“When I was in the office last Monday, a call came through from a gentleman (not a member) who did not want to leave his name or number—he wanted to know which government agency would help them out—they were in one of the first Vancouver condos and were among the first owners. Over the years they have seen their building deteriorate in spite of high maintenance fees and special assessments. He does not know where the money is going. He feels they are paying far too much for the services and repairs. He has written to council several times and to the management company but does not get a reply.

He said he cannot afford to go to a lawyer and is not sure that would be of any help anyway—the building is very transient and the ones who have stayed have given up. He was concerned there was no recourse other than going to a lawyer with their concerns. Why was there not some government agency that could enforce the Strata Property Act?

He had already gone the way of the Condominium Home Owners Association (CHOA), the B.C. Real Estate Council, and now Pacific Condominium Association (PCA).

We have had many calls like this: stories of high-handed Councils, suspicions of financial irregularities and stonewalling management companies. Our standard reply is to point out that the Act is written so that the only remedies are to:

a. Rally twenty five percent or more of the owners, force meetings to replace the Council and fire the management company.

b. Take the strata corporation to Supreme Court (see sections 163 to 169 of the Act) or, if the case is appropriate, to Small Claims Court.

c. Initiate an arbitration or mediation process.

The first option is often difficult to achieve and the last two are both expensive and unpredictable, the costs usually being much larger than the sums under dispute.

In this example of a typical conflict, we see the Act being flouted by a Council and by a management company. We had to point out to the caller that there is little effective help from government. Even getting general advice about how to proceed with a grievance is difficult. Many of our callers tell us that the Homeowners Protection Office will not comment on their problems. They tell them to contact CHOA, Vancouver Island Strata Owners Association (VISOA) or PCA for advice. These organizations represent about ten percent of the strata property owners in the Province, and do not have the resources to provide all the help that is needed.

The Act is now eight years old and many weaknesses have become clear. It is time for a review.

Deryk Norton and Harvey Williams of VISOA who have been concerned about this problem and many others have approached us. They have asked that we co-operate with them in approaching government with proposals for improvements in legislation and for more effective help from government agencies. We have agreed to work together on this project. They have prepared a list of 13 critical needs for change, which our Board is studying. The list includes the following items:

A. Strata Disputes

· Lack of publicly available authoritative source of SPA interpretation: could Homeowners Protection Office supply this service?

· Dispute resolution: similar to Small Claims Court.

· Lack of offences and penalties provision: amend SPA.

B. Strata Management

· One-sided provision for termination of strata management contracts.

· Better policing of strata management companies.

C. Financial Disclosure

· Rules needed to improve financial reporting: amend SPA.

· Adequacy of contingency reserve funds: amend SPA.

D. Strata Development Approvals and Accountability: all require SPA amendments

· Bare land strata approval process for phased developments.

· Fraudulent misrepresentation by developers.

· Changes to strata development boundaries.

· Strata responsibilities.

· Better definition of common facilities.

E. Strata Fee Calculation

· More precise methods of calculating unit entitlement.

This is a very condensed version of the topics of concern. We would like to get reactions from members and will e-mail you a copy of the full document on request. Please phone or email us (see page 2) if you have concerns about weaknesses of the Act.