30/05/2022 – Jurisdiction British Columbia
Part 78 published on 01/06/2022
Owners had not passed a rental restriction by-law
The owners considered a proposed rental restriction by-law at the corporation’s 2014 AGM. The by-law was purportedly passed at that time, but with an important change. In particular, the owners adopted an amendment which exempted all current owners from the rental restrictions (rather than only the original owners who were exempted by virtue of Section 143 (2) of the Strata Property Act).
The Tribunal determined that the attempt to pass the by-law in 2014 had failed for two reasons:
- The amendment substantially changed the resolution (the proposed by-law), contrary to Section 50 (2) (a) of the Strata Property Act (SPA).
- The amendment also violated the SPA, because “the wording of the amended resolution exempting all current owners from the rental restriction bylaw is an impermissible restriction on the rights of some owners to freely lease their strata lot under section 121 of the SPA”.
However: At the 2016 AGM, the owners passed a resolution to repeal and replace all of the corporation’s by-laws apart from the rental restriction by-law and two other by-laws. At the meeting, the rental restriction by-law was included in a Schedule of current by-laws along with a “Note to Reader” stating that the by-law was not being repealed or amended from its original form adopted at the 2014 AGM. But this version of the rental restriction by-law did not include the amendment (which purported to exempt all 2014 owners).
The strata corporation asserted that the vote to repeal and replace all of the corporation’s by-laws apart from the rental restriction by-law and two other by-laws had served to effectively pass the rental restriction by-law.
The Tribunal disagreed and ordered the corporation to stop enforcing the rental restriction by-law. The Tribunal said:
I find that by explicitly stating the rental restriction bylaw (bylaw 32.7) was not being repealed or replaced by the 2016 Schedule A bylaws, the owners did not adopt that bylaw when it voted in favour of the resolution. In other words, I find that even though the rental restriction bylaw was included in the 2016 Schedule A bylaws (as bylaw 33.1), owners would reasonably interpret the statements exempting it to mean that bylaw 33.1 was not included as part of the resolution.
Editorial Note: If there is sufficient support among the strata lot owners for the rental restrictions (without the invalid amendment introduced in 2014), I assume that the owners might pass a proper version of the by-law at any upcoming AGM (perhaps subject to legacy exceptions – grandfathering – for any existing tenancies).
Gregoire v The Owners, Strata Plan BCS3859 – Civil Resolution Tribunal