Date Issued: March 9, 2021

File: ST-2020-005811

Type: Strata

Civil Resolution Tribunal

Indexed as: Wong v. The Owners, Strata Plan BCS 334, 2021 BCCRT 268

Between:

SAI FUN WONG and JOSEPH JAO YIU SUNG

ApplicantS

And:

The Owners, Strata Plan BCS 334

Respondent

INTRODUCTION

1.    This dispute is about permission to rent a residential strata lot. The applicants, Sai Fun Wong and Joseph Jao Yiu Sung (owners), co-own a strata lot in the respondent strata corporation, The Owners, Strata Plan BCS 334 (strata).

2.      The owners say the strata has improperly denied their strata lot rental request. The owners argue that the rental restriction bylaws are invalid and do not apply to their strata lot. The owners ask for an order approving the rental of their strata lot and compensation of $4,600 for lost rent.

3.      The strata denies the claims. The strata says the bylaws are valid and they prohibit the owners’ rental request.

4.      The owners are represented by their real estate rental agent. The strata is represented by a lawyer, Jamie Bleay.

JURISDICTION AND PROCEDURE

5.      These are the formal written reasons of the Civil Resolution Tribunal (CRT). The CRT has jurisdiction over strata property claims under section 121 of the Civil Resolution Tribunal Act (CRTA). The CRT’s mandate is to provide dispute resolution services accessibly, quickly, economically, informally, and flexibly. The CRT must act fairly and follow the law. It must also recognize any relationships between dispute parties that will likely continue after the CRT’s process has ended.

6.      The CRT has discretion to decide the format of the hearing, including in writing, by telephone, videoconferencing, or a combination of these. I am satisfied an oral hearing is not required as I can fairly decide the dispute based on the evidence and submissions provided.

7.      Under section 123 of the CRTA and the CRT rules, in resolving this dispute the CRT may order a party to do or stop doing something, order a party to pay money, or order any other terms or conditions the CRT considers appropriate.

ISSUES

8.      The issues in this dispute are:

a.    Did the strata improperly deny the owners’ request to rent the strata lot? If so, what is the remedy?

b.    Does the strata owe the owners compensation for lost rent?

EVIDENCE AND ANALYSIS

9.      In a civil claim such as this, the applicant owners must prove their case on the balance of probabilities. While I have read all of the parties’ evidence and submissions, I only refer to what is necessary to explain and give context to my decision.

10.   The strata was created in 2003 and is subject to the Strata Property Act (SPA).

11.   The strata amended all of its bylaws by filing an entire new set of bylaws at the Land Title Office (LTO) on November 1, 2007. Subsequent bylaw amendments were filed at the LTO, but of those amendments, I find only the rental restriction bylaws filed on October 20, 2009 and October 23, 2018, relevant to this dispute. These bylaw amendments are discussed below.

12.   The October 20, 2009 bylaw amendment limited the rental of strata lots by adding bylaw 8(3)(b). This bylaw says a maximum of 15% of the suites can be rented at one time. Since the bylaws do not define “suites,” I infer that term “suites” refers to strata lots. The bylaw also says that rentals will be accepted on a first come first served basis.

13.   The October 23, 2018 bylaw amendment revised the rental restrictions and says the following:

a.    Bylaw 8(1) says only 15% of the residential strata lots can be rented at any one time.

b.    Bylaw 8(3) says an owner who wants to rent their strata lot must apply in writing to the strata council.

c.    Bylaw 8(4) says that if the maximum number of strata lots stated in bylaw 43(1) is reached, the strata must notify the owner within 20 days of the application and put them on a waitlist.

14.   The owners’ application for dispute resolution refers to the rental restriction bylaw amendment filed at the LTO on September 26, 2019. However, I find that the September 26, 2019 bylaw amendment is not relevant to this dispute because this bylaw amendment only refers to feeding birds and animals, not rentals. I infer that the owners were referring to the October 23, 2018 bylaw amendments discussed above.

15.   The following facts are not disputed. The owners rented their strata lot to tenants from March 1, 2016 to June 30, 2020 with the strata’s approval. On June 11, 2020, the owners applied for strata permission for a new tenancy with new tenants starting on July 1, 2020. The strata denied the request because the strata had reached the 15% maximum number of rentals.

16.   The strata put the owners’ rental request on a waitlist. The strata provided an undated copy of the waitlist showing the owners’ request as 17^th in line. The owners argue that it is unknown how the strata exercises its discretion to approve rental requests and administer the waitlist. The strata says the rental requests are decided on a first come, first served basis. The waitlist shows that all of the strata lots ahead of the owners submitted rental requests before June 11, 2020 and the waitlist is ranked in chronological order. Based on the waitlist, I am satisfied that the strata determines rental applications and administers the waitlist on a first come, first served basis.

17.   The owners did not make submissions disputing that the 15% rental limit had been reached. However, the owners argue that the 15% limit does not apply to their rental request.

18.   The owners requested a strata council hearing for approval to rent their strata lot. The strata held a hearing on July 14, 2020 and it issued a decision denying the owner’s request on July 23, 2020.

Does the October 23, 2018 bylaw amendment apply to the owners’ strata lot?

19.   SPA section 143(1) says that a bylaw that prohibits or limits rentals does not apply to a strata lot until one year after a tenant who is occupying the strata lot at the time the bylaw is passed vacates the strata lot and one year after the bylaw is passed.

20.   The owners argue that the October 23, 2018 bylaw amendment does not apply to their proposed new July 2020 tenancy under section 143(1) of the SPA. The owners says the previous tenants occupied the strata lot when the October 23, 2018 bylaw amendment was filed at the LTO. So, the owners argue that the rental restrictions in the October 23, 2018 bylaw amendment do not apply to their strata lot until 1 year after the previous tenancy ended on June 30, 2020.

21.   The strata argues that the October 23, 2018 bylaw amendment applies to the owners’ strata lot. The strata argues that SPA section 143(1) only applies to new rental restrictions. The strata argues that the 15% rental limit was created in the October 20, 2009 bylaw amendment and the October 23, 2018 bylaw amendment only updated and revised the existing rental restrictions. The strata argues that the October 23, 2018 bylaw amendment did not create a new rental limitation because the 15% limit under the October 20, 2009 bylaw amendment was in force before the tenancy started in 2016. I find that the October 20, 2009 bylaw amendment and October 23, 2018 bylaw amendment both applied a 15% rental limit on a first come, first served basis and the October 23, 2018 bylaw amendment adds further details about the rental application procedure such as adding a waitlist.

22.   However, I find that I do not need to determine whether the October 23, 2018 amendment is a revision of an existing rental restriction rather than a new restriction as the strata argues because the SPA does not say that section 143(1) is limited to new rental restrictions. SPA section 143(1) only says that bylaws limiting rentals are delayed for 1 year after the end of existing tenancies. There is no explicit restriction in SPA section 143(1) to new rental restrictions. I find that the October 23, 2018 bylaw amendment limits the rental of strata lots so this bylaw does not apply to the owners’ strata lot until 1 year after the end of the tenancy in place at the time the bylaw came into effect. Since the previous tenancy ended on June 30, 2020, I find that the October 23, 2018 bylaw amendment does not apply to the owners’ strata lot until June 30, 2021.

23.   The October 23, 2018 bylaw amended the October 20, 2009 bylaw amendment to read as the 2018 bylaw amendment. So, since the October 23 2018 bylaw amendment did not apply to the owners’ strata lot when the owners requested rental permission in June 2020, I must determine whether the October 20, 2009 bylaw amendment applies to the owners’ strata lot.

24.   Similar facts were considered by the CRT in Hamaguchi v. The Owners, Strata Plan LMS 3146, 2018 BCCRT 307 (CanLII). In Hamaguchi, rental restriction bylaws from 2016 were in effect when tenants moved into the strata lot. The strata later amended the rental restrictions in 2017, with the 2017 bylaw amendment replacing the 2016 bylaw amendments. The tribunal member found that, since the application of the 2017 bylaw amendments to the owner’s strata lot was postponed by SPA section 143(1), the 2016 bylaw amendment still applied to the owner’s strata lot even though the 2016 bylaw amendments were replaced by the 2017 bylaw amendments.

25.   Although the decision in Hamaguchi is not binding, I find the reasoning persuasive and apply it here. I find that since the October 23, 2018 bylaw amendment does not yet apply to the owners’ strata lot under SPA section 143(1), the October 20, 2009 bylaw still applies to the owners’ strata lot until June 30, 2021. So, I find that the October 20, 2009 bylaw amendment applies to the owners’ rental request for the new tenancy.

Is the rental limit valid?

26.   The owners say that the rental restriction bylaws are invalid because the bylaws do not include a procedure for administering the rental limit as required by SPA section 141(3). The owners rely on the decision in Carnahan v. The Owners Strata Plan LMS522, 2014 BCSC 2375 which sets out requirements for rental restriction bylaws. However, I note that the decision in Carnahan was overturned by the BC Court of Appeal (BCCA) in Mathews v. The Owners, Strata Plan VR 90, 2016 BCCA 345. In Mathews, the BCCA says that SPA section 141(3) only requires rental restriction bylaws to set out a procedure to rent the strata lot. The BCCA says the strata corporation does not need to detail the substantive decision-making criteria that will determine an owner’s rental request.

27.   Bylaw 8(3)(b), from the October 20, 2009 bylaw amendment, says that 15% of the strata lots can be rented on a first come first served basis. I find that ‘first come, first served’ is a sufficient procedure to determine owner’s rental requests under section 141(3). Although very simple, I find that a detailed procedure is not required under Mathews. I further note that the BCCA found that a first come first served was a valid method of allocating rental permission in Mathews. So, I find that the October 20, 2009 bylaw amendment complies with SPA section 141(3) and is valid.

28.   For the above reasons, I find that the strata’s denial of the owners’ rental request did not violate the SPA. So, I dismiss the owners’ request for an order allowing the owner to rent the strata lot.

29.   Based on the above findings, I also find that the owners are not entitled to compensation for the strata’s refusal to grant permission to rent the strata lot, including lost rent.

CRT FEES AND EXPENSES

30.   In accordance with the CRTA and the CRT’s rules, as the owners were unsuccessful, I find they are not entitled to any reimbursement. The strata did not request reimbursement of CRT fees or dispute-related expenses.

31.   The strata must comply with section 189.4 of the SPA, which includes not charging dispute-related expenses against the owners.

ORDERS

32.   I dismiss the owners’ claims and this dispute.