Since July 31, 1998, the industry has awaited the coming into force of the Strata Property Act. On July 1, 2000, the Strata Property Act will become law. It will not supplement or revise the Condominium Act. It will completely replace the Condominium Act. This means that on July 1, 2000, the Condominium Act will cease to exist, although it may have some relevance in a few specific areas. Simultaneously with the coming into force of the Strata Property Act, the Strata Property Amendment Act and the Regulations will also become law.
The Strata Property Amendment Act was proclaimed in May, 1999. It amends the Strata Property Act. Therefore, it is important when reading the Strata Property Act to be aware that some of its provisions have already been amended. Furthermore, there are detailed Regulations to the Strata Property Act which carry the same weight and importance as the Act and the Amendment Act. Whenever you look at the Strata Property Act, you must be sure to review the Regulations as well. The Act, the Amendment Act and the Regulations have the same legal effect.
The Strata Property Act is more than 3 times as long as the Condominium Act, without taking into account the Amendment Act and the Regulations. When the Strata Property Act, the Amendment Act and the Regulations come into force on July 1, 2000, much of what we know from the Condominium Act will remain. However, there will be many changes. This article highlights just some of those changes.
The Strata Property Act will introduce new terminology. For instance, there are two types of general meetings – annual general meetings and special general meetings. The term extraordinary general meeting disappears.
A resolution in the Strata Property Act may require a 3/4 vote instead of a special resolution. In order to determine if the owners have approved a resolution by a 3/4 vote, you must count the number of votes cast. This means that abstentions do not count because an owner who abstains has not cast a vote. Then, what does a resolution requiring a 3/4 vote require in order to pass? Under the Condominium Act, you counted the number of persons present at the meeting in person or by proxy, who are eligible to vote. If there were 100 owners present in person or by proxy and eligible to vote, a special resolution would pass if 75 owners voted in favour. This would be true even if 10 owners abstained from voting. Under the Strata Property Act, if 100 owners are present in person or by proxy and eligible to vote and 10 abstain from voting, the number of votes cast equals 90. A 3/4 vote will be achieved not by 75 votes in favour, but 68 votes in favour. In other words, an abstention under the Condominium Act equates to a “no” vote, but under the Strata Property Act, an abstention does not count because the count is based on votes cast.
A resolution passed by a majority vote is an ordinary resolution. Once again, abstentions do not count. A majority vote is a new definition found the Strata Property Act. A majority vote is a resolution passed by more than 1/2 plus one vote of those present in person or by proxy, who are eligible to vote and who have not abstained from voting. Again, the votes that count are votes that are cast.
Occupant is a new definition found in the Strata Property Act. Occupant was not defined in the Condominium Act. Occupant refers to an individual who occupies a strata lot, but is not the owner or tenant. Therefore, an occupant is someone who is not renting and is not registered on title to the strata lot. An occupant is a spouse, child, relation or friend of the registered owner.
Pursuant to the Condominium Act, the strata council passes rules and regulations. Under the Strata Property Act, the strata council only passes rules. The term regulations is strictly reserved for the Regulations brought into force by the Government on July 1, 2000. There will no longer be rules and regulations of a strata corporation. The strata corporation will only have rules.
The Strata Property Act devotes an entire part to the matter of separate sections. Under the Strata Property Act, a strata corporation may have sections only for the purpose of representing the different interests of:
- residential and nonresidential strata lots;
- owners of nonresidential strata lots, if they use their strata lots for significantly different purposes; and
- different types of residential strata lots such as:
- apartment-style strata lots;
- townhouse-style strata lots;
- detached houses.
There are two ways to create separate sections. The owner developer may create separate sections at the time of the filing of the strata plan by filing specific bylaws to provide for the creation and administration of each separate section or the strata corporation may hold a general meeting and approve resolutions creating separate sections by a 3/4 vote of eligible voters in the proposed section and a 3/4 vote of all of the eligible voters in the strata corporation.
After these separate sections are created, the strata corporation retains its powers and duties with respect to matters of common interest, but if a particular matter relates solely to a section, that section is a corporation and has the same powers and duties as the strata corporation. This means that the separate section maintains its own operating fund and contingency reserve, its own budget and it may levy its own assessments. A separate section may sue or arbitrate in its own name and enter into contracts separate from the strata corporation. A separate section may acquire and dispose of land in its own name.
A management contract entered into before the first annual general meeting does not end on its own terms, but in accordance with specific sections of the Act. A contract for management services may be cancelled on 2 months’ notice if the cancellation is approved by a 3/4 vote at a general meeting of the strata corporation or on two month’s notice to the strata corporation by the management company.
When a management contract ends, the property manager has 4 weeks to give to the strata corporation all records referred to in Section 35 of the Act, such as minutes, owners names, names of tenants, assignments of voting or other rights; books of account, copies of resolutions dealing with common property, copies of contracts, etc.
The Strata Property Act will permit non-owners to be on the strata council, including tenants. However, not just any tenant. The tenant must possess a written assignment of his/her landlord’s rights to stand for council. This assignment must been in the form specified in the Act. The assignment must contain the name of the tenant, the specific powers and duties that are being assigned and the time period during which the assignment is effective.
There is an exception. If the tenant has entered into a long term lease (which is defined as a lease for a term of 3 years or more), then the assignment of the powers and duties of the landlord is by operation of law, for the period of the lease.
A strata corporation may, by bylaw, prevent an owner from being on council, or to continue on council, if the strata corporation is entitled to register a lien against the strata lot for failure of that owner to pay strata fees or failure to pay a special levy. This will allow the other members of council, without going back to the owners, to remove an owner from council if the council member is in arrears of maintenance or levies.
The Standard Bylaws found in the Strata Property Act are the bylaws of a new strata corporation. Where a strata corporation has filed bylaws in the appropriate land title office or is already subject to Part 5 Bylaws, those bylaws remain in force until January 1, 2002. Until that date, if a bylaw filed in the land title office contravenes the Strata Property Act, the Amendment Act or the Regulations, it remains effective until January 1, 2002 (provided it was valid in the first place under the Condominium Act). On December 31, 2001, the Standard Bylaws found in the Strata Property Act are deemed to replace any bylaws of a strata corporation found in Part 5 of the Condominium Act. And any bylaws filed in the land title office prior to that date will cease to be effective on that date if they conflict with the Strata Property Act.
Rules are generally made by the strata council. Every rule ceases to have effect at the next annual general meeting held after a rule is made by council, unless that particular rule is ratified by a resolution passed by a majority vote at a general meeting. Once the rule is ratified, you do not have to ratify it again.
These are just some of the changes that will take effect on the coming into force of this new legislation. There is much more to learn.