Date Issued: May 26, 2021

File: ST-2020-005954

Type: Strata

Civil Resolution Tribunal

Indexed as: Champion v. The Owners, Strata Plan KAS 2680, 2021 BCCRT 567

Between:

LISA CHAMPION

Applicant

And:

The Owners, Strata Plan KAS 2680

Respondent

REASONS FOR DECISION
Tribunal Member:	Kate Campbell, Vice Chair

INTRODUCTION

1.      This dispute is about rental of a strata lot in a strata corporation.

2.      The applicant, Lisa Champion, owns strata lot 15 (SL15) in the respondent strata corporation, The Owners, Strata Plan KAS 2680 (strata). Ms. Champion says the strata has improperly imposed fines against her for renting out SL15. She seeks orders that the strata stop fining her, reverse previously imposed fines, and permit her to rent SL15.

3.      The strata says Ms. Champion’s claims should be dismissed. It says Ms. Champion was denied a hardship exemption from the strata’s rental restriction bylaw, but then rented SL15 anyway, contrary to the bylaw. The strata says it is required to enforce its bylaws, and that it properly imposed fines in order to do so.

4.      Ms. Champion is self-represented in this dispute. The strata is represented by a strata council member.

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). CRTA section 2 says the CRT’s mandate is to provide dispute resolution services accessibly, quickly, economically, informally, and flexibly. In resolving disputes, the CRT must apply principles of law and fairness, and recognize any relationships between the dispute’s parties that will likely continue after the CRT process has ended.

6.      CRTA section 39 says the CRT has discretion to decide the format of the hearing, including by writing, telephone, videoconferencing, email, or a combination of these. Here, I find that I am properly able to assess and weigh the documentary evidence and submissions before me. Further, bearing in mind the CRT’s mandate that includes proportionality and a speedy resolution of disputes, I find that an oral hearing is not necessary in the interests of justice.

7.      CRTA section 42 says the CRT may accept as evidence information that it considers relevant, necessary and appropriate, whether or not the information would be admissible in a court of law. The CRT may also ask questions of the parties and witnesses and inform itself in any other way it considers appropriate.

Preliminary Issue – Aggravated Damages

8.      In her submissions, Ms. Champion says she may, in the future, seek aggravated or exemplary damages against the strata because she was unable to sell SL15 due to the imposed fines. She says she cannot quantify these damages until the strata lot is sold.

9.      There was no claim for aggravated or exemplary damages set out in the Dispute Notice. I therefore find that is not a claim before me to resolve in this dispute. I make no finding in this decision about whether Ms. Champion may pursue that claim in the future.

ISSUE

10.   Is Ms. Champion entitled to rent SL15, and if so, what remedies are appropriate?

BACKGROUND

11.   In a civil claim like this one, Ms. Champion, as applicant, must prove her claim on a balance of probabilities (meaning “more likely than not”). While I have read all the parties' evidence and submissions, I only refer to what is necessary to explain and give context to my decision.

12.   The strata filed consolidated bylaws with the Land Title Office (LTO) in March 2012. In April 2014, the strata filed bylaw amendments with the LTO, including an amendment to its rental bylaw, bylaw 31. The strata filed some other amendments after April 2014, which I find are not relevant to this dispute.

13.   As amended in April 2014, bylaw 31(a) says that no more than 4 strata lots in the strata may be leased at any time, and no lease may be for less than 6 months. It also says strata lots owned by original owners who are otherwise exempt from the rental restriction will not be considered as rentals for the purpose of calculating the 4 permitted rentals.

14.   I find Ms. Champion is not an original owner, as she bought her strata lot in 2018, but the strata was created in 2004.

15.   Bylaw 31(b) says an owner wishing to lease their strata lot must apply in writing to the strata for permission to lease within the prescribed limit (of 4 strata lots).

16.   Strata Property Act (SPA) section 141(2)(b) permits a strata corporation to have bylaws limiting residential strata lot rentals, as in this case. Also, SPA section 144(1) says an owner may apply to the strata for an exemption from a rental restriction bylaw, on the grounds the bylaw causes “hardship to the owner”.

POSITIONS OF THE PARTIES

17.   Ms. Champion says she must rent out SL15, as she is now working in another region of BC. She submits as follows:

•         The strata unreasonably refused her hardship exemption application, which she provided to the strata on February 28, 2019.

•         The strata did not issue its decision on her application for more than 2 weeks, which means that under SPA section 144(1)(4)(a)(ii), she was automatically deemed permitted to rent out SL15.

•         Bylaw 31(a) is invalid and unenforceable, because it does not set out any procedure for enforcing the rental restriction.

•         The strata has acted significantly unfairly, as it acknowledged a deemed exemption for another strata lot owner (unit 103), but not for Ms. Champion.

•         The imposed fines are invalid, as the strata did not following the notice procedure required under SPA section 135.

 

 

18.   The strata submits as follows:

•         The hardship exemption application package Ms. Champion initially provided was not organized, so the strata’s property manager advised her to pick it up, organize it, and resubmit it. The application was not resubmitted until March 7, 2019, and the strata gave her its decision to deny the application by March 19, 2019, which was within the required 2 week period.

•         The strata was justified in denying Ms. Champion’s hardship application, because she did not appear to be in financial hardship due to her “spending habits”, including buying a new car.

•         The strata has a rental waitlist. Bylaw 31(b) sets out a procedure to apply for the rental waitlist, but Ms. Champion did not apply.

•         The strata was unable to enforce rental restrictions against unit 103.

•         The fines imposed on Ms. Champion are valid.

REASONS AND ANALYSIS

19.   As mentioned above, SPA section 141(2) permits the strata to restrict or prohibit rentals through a bylaw. The exact wording of the section is as follows:

141 (2) The strata corporation may only restrict the rental of a strata lot by a bylaw that

(a)  prohibits the rental of residential strata lots, or

(b) limits one or more of the following:

(i) the number or percentage of residential strata lots that may be rented;

(ii) the period of time for which residential strata lots may be rented.

20.   In this case, the strata has not prohibited all rentals. Rather, it has, through bylaw 31(a), limited the number of strata lots that may be rented to 4, as permitted in SPA section 141(2)(b)(i).

21.   SPA section 141(3) says that a bylaw under 141(2)(b)(i) must set out the procedure to be followed by the strata in administering the limit.

22.   The BC Court of Appeal specifically considered SPA section 141(3) in Mathews v. The Owners, Strata Plan VR 90, 2016 BCCA 345. In that case, the court said that while a waiting list would provide “helpful clarity” in administering a rental limit bylaw, it is not required. Rather, the court said that SPA section 141(3) requires only that the rental bylaw “set out a procedure whereby permission to rent a strata lot may be obtained by an owner” (paragraph 48).

23.   In this case, strata bylaw 31(b) says an owner who wishes to lease their strata lot must apply in writing to the strata corporation for permission to lease within the prescribed limit. The other subsections of bylaw 31 set out what must happen after permission to lease is granted, or what may happened if an owner leases their strata lot contrary to the bylaw.

24.   In this case, I find the strata’s rental bylaw is distinguishable from that considered by the Court of Appeal in Mathews. In Mathews, the Court found the rental bylaw met the requirements of SPA section 141(3) because it set out a basic procedure to administer the rental limit. However, I find the rental bylaw in Mathews had significantly more detail about the limit administration procedure than the bylaw before me in this case.

25.   First, the bylaw in Mathews said that the rental limit “shall be administered and enforced by the Strata Council”. In the case before me, there is nothing in the bylaws about who will administer the rental limit.

26.   Second, the bylaw in Mathews set out a much more detailed procedure about how an owner must apply to lease their strata lot, and what information is required. Further, bylaw 2(b) in Mathews set out how the strata must respond to a rental application, as follows:

(b)  Upon receipt of a written request for a Lease Permit from an Owner together with the items and information outlined above, the Strata Council or the Property Manager employed by the Strata Corporation may within 14 days of receipt of the request either:

i) issue a Lease Permit to the Owner, or

ii) advise the Owner the request has been denied.

27.   In the case before me, the bylaws only say that an owner can apply “in writing”. More importantly, the bylaws are silent on how, or whether, the strata must reply to a lease application. Unlike in Mathews, the bylaws in this case do not say who must reply to the lease request, what must occur, or in what time frame.

28.   For these reasons, I find the bylaws in this case are not analogous to those in Mathews, and do not meet the test of setting out “a procedure whereby permission to rent a strata lot may be obtained by an owner” (see Mathews at para. 48). In paragraph 45 of Mathews, the Court said that SPA section 141(3) must necessarily be read as mandating only a basic procedure governing the administration of the rental limit. However, I find the bylaws in the case before me do not set out even a basic procedure, as the only procedural provision is that an owner may apply in writing. Specifically, I find the bylaws do not meet the requirements of section 141(3), as set out in Mathews, because they say nothing about what the strata will do after receiving an application. Thus, there is no procedure for administering the rental limit.

29.   For this reason, I find the strata’s rental limit bylaw does not meet the requirements of SPA section 141(3). Under SPA section 121, a bylaw is not enforceable to the extent that it contravenes the SPA. Therefore, I find bylaw 31(a) is not enforceable.

30.   Since bylaw 31(a) is unenforceable, I find the strata was not entitled to impose fines against Ms. Champion for allegedly breaching it. I order those fines reversed. I also find that under the current bylaws, Ms. Champion was and is entitled to rent out SL15.

31.   Given this conclusion, I find it is not necessary for me to make any findings about Ms. Champion’s hardship exemption application, whether the strata followed the SPA section 135 notice requirements in imposing fines, or whether the strata enforced the rental bylaw inequitably.

CRT FEES AND EXPENSES

32.   As Ms. Champion was successful in this dispute, in accordance with the CRTA and the CRT’s rules I find she is entitled to reimbursement of $225.00 in CRT fees. Neither party claimed dispute-related expenses, so I order none.

33.   The strata must comply with section 189.4 of the SPA, which includes not charging dispute-related expenses to Ms. Champion.

34.   Since the parties provided detailed documentary evidence in this dispute about Ms. Champion’s personal finances, I order the CRT’s dispute records sealed.

ORDERS

35.   I order that the strata must immediately:

a.    Stop enforcing bylaw 31(a).

b.    Reverse any rental bylaw fines imposed against Ms. Champion’s strata lot account.

c.    Reimburse Ms. Champion $225 for CRT fees.

36.   Ms. Champion is entitled to postjudgment interest under the Court Order Interest Act, as applicable.

37.   I order the CRT’s dispute records sealed.

38.   Under CRTA section 57, a validated copy of the CRT’s order can be enforced through the British Columbia Supreme Court. Under CRTA section 58, the order can be enforced through the British Columbia Provincial Court if it is an order for financial compensation or return of personal property under $35,000. Once filed, a CRT order has the same force and effect as an order of the court that it is filed in.