What will the removal of rental restrictions mean for strata corporations and the housing market?
The BC government has removed the ability of a strata corporation to restrict rental in their properties. How will this affect the housing market? How will this affect properties with rental restriction bylaws? What can your strata do to manage the addition of rentals?.
If your building currently has a rental restriction, you may already have tenants in the building and the entire building could even be rented under specified exemptions including family members and hardship rentals.
Many strata lot owners and Strata Corporations view “Tenants or Renters‘ as bad people who may not take care of the property due to lack of pride of ownership. Being the owner of the property doesn’t automatically make you a more responsible person.
Is not wanting renters discriminatory? The definition of discrimination is:
“the unjust or prejudicial treatment of different categories of people or things”
One could argue that tenants or renters are “categories of people”, and therefore being against them is a discriminatory thought or action.
Why are people afraid of tenants in their strata corporation? Some concerns are there will be more complaints, or bylaw infractions because tenants don’t care for the property.
In BC when a strata lot is rented the owner is required to provide a form K which identifies the unit is rented and who the tenants are that reside in the unit. By signing the form K tenants are
agreeing to adhere to the bylaws and rules of the strata corporation. This provides the strata with the tenants information and allows them to send bylaw infractions and fines to the tenant when there is an issue. What is often miss understood by stratas and management companies is that they are required to send the infraction notice to the tenants, and copy the owner on the infraction letter, the tenants also have all the rights of an owner to respond to the notice of infraction including the right to request a hearing.
The addition of rentals into your strata corporation will not have an immediate impact on your building. Mass amounts of people are not going to sell their properties to investors simply because they are now rentable, there simply isn’t that many investors available. Some owners who currently live there may choose to rent instead of selling. The process of enforcing your bylaws is slightly different when it is tenanted, ensuring your property management company understands the process is important. Multiple cases have been brought in front of the CRT regarding bylaw fines for tenants which were applied not in accordance with the Strata Property Act and were overturned. Strata Corporations need to understand the rights tenants have in the strata property act when they rent.
Strata corporations whose management company uses electronic communication to inform residents of issues in the building should ensure their management company includes tenants on the system. This makes communication easier, and tenants feel welcome and part of the community. Strata should discuss with the management company to see if they understand the process of applying fines to tenants. The strata must follow section 135 of the act before applying fines. For tenants they must also understand section 130 and 131. The CRT has ruled in multiple cases sending the notice to the owner alone isn’t sufficient when following section 135 as related to tenants. Tenants have the right to reply to a complaint under section 135. Failing to provide them this opportunity means the fines have been applied incorrectly.
How is this change going to help the housing market? Currently there are a large number of people who purchased properties in Vancouver where the empty homes tax was implemented. The properties are vacant as they formally used them part time and want to hold on to them for future full time use. They have applied to their strata corporation for permission to rent and have been denied, due to the rental limit in the bylaw already achieved. This will add a number of rentals to the rental market.
Many rental restriction bylaws have wording that includes owners are not allowed to rent “all or part” of their strata lot. This restricts current owners from obtaining a roommate for their spare room as that would make them in violation of the bylaw. The SPA has exemptions for owners to rent to “family members” which is currently limited to immediate family members, which means parents or children of owners or the owner’s spouse. Lifting the rental restrictions will allow owners to rent all or part of their strata lot to other family members including, siblings, cousins, aunt, uncles and friends. Allowing current owners to rent their spare bedroom will alleviate their cost of housing and provide a home for another person. The way the Act is written now, if you are the person on title and your sibling moves into your spare room, or your new partner moves in with you, you are in violation of the strata bylaw.
Another factor affected by removing the rental restrictions is hardship rentals. Currently an owner may need or want to relocate for work or other reasons for a specified period of time. Currently if the building has a rental restriction bylaw which stipulates a limit to the number of rentals and there is no availability the owner would be forced to request hardship permission. If council denies the hardship application the only options are to leave the unit vacant or sell the property. This could help the economy in many different ways including the following scenarios:
-A person is offered employment in Ontario for a term of two years to work on a specific project. If strata deny the hardship rental then the person needs to leave the unit vacant out of the rental market or sell the property. Leaving it vacant is costly to the owner, doesn’t provide housing in the local market and doesn’t provide the employer with the person they desire. Selling it forces the party to buy another property when they return, which could also be more expensive at that time.
-A family member lives in another province and has their first child. A retired parent living in BC may want to live there for a period of time, one or two years to help their child with their grandchild. Again this person may be forced to sell and buy in again at a different price when they always intended to return to this area.
-A couple who both own a property in strata corporations with rental restrictions, want to move in together to see if the relationship works before buying a property together. Both of their buildings don’t have availability under the rental restriction bylaws. This means one or both must sell the property, and if the relationship fails the one party is now without housing.
These are just a few scenarios where people are being forced to sell a property they would prefer to retain for future personal use, but are forced to sell due to current rental restriction bylaws.
Allowing these types of rentals will increase housing options for people in BC, reduce current housing costs for some owners, and help the economy by allowing people to make decisions to relocate temporarily easier.
Renting your property can be confusing. Cartref Properties can assist you, call today to discuss your needs or find more information about us at: www.cartrefproperties.com
