Source: https://condomanual.ca/tcm3/paying-for-repairs/
Timestamp: 2019-04-25 17:41:09+00:00

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Which Statute Governs a Dispute Over Repair Costs?
The Strata Property Act and, especially, the regulations determine who is ultimately responsible to pay for repairs. For the reasons given at the start of Chapter 25, Carrying Out Repairs, every reference in this chapter to “repair” or “repairs” includes maintenance, unless the context requires otherwise.
For the purpose of paying for repairs, the Strata Property Act and the Standard Bylaws treat both common property and common assets the same. Accordingly, when speaking of repairs, in this chapter every reference to common property includes common assets, unless the context requires otherwise.
Repairs are just one of many different kinds of expenses that a strata corporation may incur. The requirements for allocating expenses for repairs apply equally to every other kind of strata corporation expenditure.
We use the subject of repairs to illustrate how the Strata Property Act and the regulations allocate expenses. The reader, however, may use the analysis below to allocate any expenditure by a strata corporation among the owners, including expenses for repairs.
Although a strata corporation may amend its bylaws concerning repair work, the Strata Property Act and the regulations govern the allocation of costs for that work. Note that many of the provisions that specifically require a strata corporation to allocate repair costs among only some of the owners, rather than all of them, are found in the regulations.
Assuming that a strata corporation is responsible to perform certain repair work, the corporation must decide who ultimately pays for that work. In other words, the strata corporation must decide whether all, some, or even just one owner must pay the corporation for the cost of that work.
There are exceptions to the general rule. An exception requires a strata corporation to depart from the general rule. Where an exception exists, the strata corporation must allocate an expense among only some, or perhaps to just one owner, instead of all of the owners. It follows that the general rule applies unless an exception exists.
This exception may apply whether the expenditure for a repair comes from the operating fund, the CRF or a special levy.
Section 100 of the Strata Property Act, however, permits the eligible voters to override the general rule by passing a unanimous resolution to change the formula for calculating each strata lot’s share of a contribution to the operating fund, the CRF or a special levy, as the case may be. A unanimous resolution requires the affirmative vote of every strata lot. For information about a unanimous vote, see Chapter 14, Voting.
A section 100 resolution is not enforceable until the resolution is filed with a Certificate of Strata Corporation (Form E) in the Land Title Office. 7 The prescribed form of Certificate of Strata Corporation (Form E) is found in the regulations.
Though it is a rare case where the owners unanimously agree to alter the general rule for contributing to the operating fund, the CRF or a special levy, as the case may be, the Strata Property Act permits the eligible voters, in effect, to agree unanimously to require some strata lots, or even just one strata lot, to contribute the whole cost of particular repair work carried out by the strata corporation. This exception is equally available for contributions to the operating fund, the CRF or a special levy.
There are also exceptions to the general rule whose availability depends on which fund is used to pay for an expenditure.
The Strata Property Act creates different exceptions, depending whether the strata corporation pays an expenditure out of the operating fund or the out of the CRF. These fund-based exceptions are described below.
To determine if a fund-based exception to the general rule applies, a strata corporation first must decide whether the expense in question falls within the definition of the operating fund or the CRF. The two funds are described earlier in Chapter 15, Finances.
The operating fund is for common expenses that occur at least once a year. 11 If a proposed expenditure typically occurs at least once or more per year, the operating fund must be used to pay the expense. The general rule requires in respect of each strata lot that every owner contribute to an expense, unless in this case, one of the operating fund exceptions applies. If an exception applies, the strata corporation must allocate the expense to only some, or even just one, of the owners, as the case may be.
Where the operating fund applies to an expense, the Strata Property Act and regulations create the following exceptions to the general rule.
Normally, a strata corporation performs repairs to common property. If the repairs constitute an ongoing expense, the strata corporation pays for the repairs out of the operating fund. In the usual case, the general rule applies and in respect of every strata lot all the owners contribute to the operating fund according to unit entitlement to pay for that repair.
For the reasons explained earlier in Chapter 25, Carrying Out Repairs, as at the time of this writing a strata corporation may not use a bylaw to make an owner responsible to repair common property. 12 It appears, however, there are at least two instances where, by agreement, an owner may be solely responsible to pay for a common-property repair performed by the strata corporation.
First, where an owner asks permission under the Standard Bylaws to alter common property, the corporation may require, as a condition of its approval, that the owner take responsibility for any expenses relating to the alteration. 13Second, where in a short term exclusive use agreement a strata corporation gives an owner or tenant permission to exclusively use certain common property, the corporation may, as part of the agreement, require the owner or tenant to pay for repairs to the relevant common property.
For instance, under the Standard Bylaws a strata corporation must carry out all repair work on LCP balconies and railings attached to the exterior of the building. 15 This regulation requires the strata corporation to allocate its yearly expenses for LCP balcony repairs to strata lots with LCP balconies, all according to unit entitlement.
What Is A “Type” of Strata Lot?
The Strata Property Act does not define the meaning of the term type.
Conversely, in a different case involving another heritage development, the court ruled that separate types of strata lot did not exist. 23 In that case, the development blended a 1904 heritage home, containing two strata lots, with a 1994 apartment building, which held six strata lots.
In another decision, the court found that different types of strata lot did not exist in a development consisting of two buildings which shared a common foundation. 24 The first building contained one strata lot and a garage which was part of another strata lot in the adjacent second building. The second building contained two strata lots.
Townhouse and apartment building strata lots respectively do not constitute different types of strata lots by virtue only of being different kinds of buildings. The courts have apparently resisted reasoning that if different kinds of buildings exist in the same development, for example, townhouses and apartment buildings, their respective strata lots must automatically be different types. Despite opportunities to do so, 27 it seems the courts have refrained from this approach. Given the case law so far, where a development contains both townhouses and apartment buildings, it is not correct to say they are each a different type by virtue only of being townhouses and apartment buildings respectively.
Where a type of strata lot is identified as a type in the bylaws, the type-exception only applies if the contribution to the operating fund relates to and benefits only that type of strata lot exclusively.
In Ernest & Twins Ventures (PP) Ltd. v. Strata Plan LMS 3529, the complainant argued that where an item of expense benefits all types of strata lots equally, the expense must be allocated among them. 28 Where, however, an expenditure benefits one type of strata lot disproportionately, the complainant argued that the strata corporation must allocate the expense in a manner that reflects the extent of the benefit derived by each type of strata lot. This approach would mean, for example, that if roofing repairs benefit the Type A strata lots 80 per cent (80%), and the Type B strata lots 20 per cent (20%), then the expense should be prorated between Types A and B. On that basis, 80 per cent (80%) of the repair expense would be allocated to the Type A strata lots, which would then share the expense, also according to unit entitlement. The Type B strata lots would carry 20 per cent (20%) of the expense, also according to unit entitlement.
The British Columbia Court of Appeal specifically rejected this interpretation of the exception in section 6.4(2) of the regulations. 29 Instead, the Court of Appeal emphasized that this exception applies where the contribution to the operating fund relates to and benefits only that type of strata lot exclusively. Where this exception applies, the contribution to pay for that repair expense is to be shared by the owners of that one type of strata lot alone, according to unit entitlement.
Given the case law concerning what constitutes a different type of strata lot, as described above, a strata corporation that wishes to create a types bylaw should first obtain legal advice in the matter.
In Oakley v. Strata Plan VIS 1098, the strata development consisted of 62 townhouse units and four buildings that together contained a total of 71 apartment strata lots. 35 The strata corporation passed a bylaw establishing two sections: Section 1 for the apartment-style strata lots, Section 2 for the townhouse-style strata lots.
The issue was whether the strata corporation could allocate repair expenses among apartment-style strata lots according to their respective buildings. If permitted, the result would be that each apartment building would bear its own repair expenses, and within each building, presumably the owners of the apartment-style strata lots would contribute to their building’s repair costs according to unit entitlement.
While the Strata Property Act recognizes the different types of residential strata lot which can comprise sections, the court held that the apartment-style residential strata lots in different buildings did not constitute different types of strata lots. The strata corporation could not treat the apartment-style residential strata lots in one building as a separate section distinct from the apartment-style residential strata lots in the other buildings. Put another way, a section for apartment-style strata lots cannot be broken into sub-sections such that each apartment building is a separate sub-section.
For the purpose of allocating repair expenses, creating an apartment, townhouse or detached house-style section has certain advantages over the passage of a bylaw identifying a type of strata lot.
With a types bylaw, described above, the strata corporation is restricted to allocating expenditures from the operating fund. Since the operating fund is restricted to expenditures which occur at least once per year, if not more often, the operating fund is likely only used for regular repairs. Certainly, in most cases, the operating fund cannot be used for a major, once-in-a-lifetime repair, such as the replacement of a building envelope in a leaky condo building.
When it came into force on July 1, 2000, the Strata Property Act recognized that some strata corporations already allocated expenses according to different types of strata lots. Often, a strata corporation had for many years identified different types of strata lot in the corporation’s annual budget, for the purpose of allocating expenses. In other instances, under the former Condominium Act a strata corporation had already amended its bylaws to identify different types of strata lot for the purpose of allocating expenses.
The following explains how the Strata Property Act’s transition provisions addressed both of these situations.
The scheme for allocating expenses in the Strata Property Act and its regulations differs from that under the former Condominium Act.
(b) common expenses not attributable to a particular type or types of strata lot shall be allocated to all strata lots and shall be borne by the owners in proportion to the unit entitlement of their strata lots.
In the past, many strata corporations relied on section 128(2) of the Condominium Act to allocate different expenses in their budgets to different types of strata lots. In other words, in their annual budgets those strata corporations distinguished different types of strata lot and separately allocated expenses to each type of strata lot.
Depending on the circumstances, an amended types bylaw filed before July 1, 2000 (that is, under the Condominium Act) may still apply under the Strata Property Act. If so, the bylaw may require the strata corporation to allocate contributions by type from the operating fund, if certain criteria are met.
The decision of the Supreme Court of British Columbia in The Owners, Strata Plan VR 2654 v. Mason illustrates how to determine if a previously filed types bylaw survives the Strata Property Act.
Elsewhere, the strata corporation’s bylaws referred to the apartment and townhouse units as the two different types of strata lot. Except for one brief, irrelevant period, , the strata corporation from 1992 to the date of the hearing in 2004 allocated expenditures from both its operating fund and CRF according to type, based on bylaw 2.2.
In Mason, an issue was whether the amended types bylaw survived the Strata Property Act, which came into force on July 1, 2000, and if so, whether the bylaw applied to contributions from the operating fund.
The transition provisions in the Strata Property Act provide that bylaws which were already filed in the Land Title Office when that Act came into force would continue to apply for an initial grace period. During the grace period, all of a strata corporation’s bylaws continued to apply, whether they were statutory bylaws or bylaws amended under the former Condominium Act. 45 The grace period ended on December 31, 2001. In Mason, the court found that bylaw 2.2 applied during the grace period. 46 During the grace period, the bylaw required the strata corporation to apportion contributions to the operating fund according to type of strata lot.
In Mason, the court held that bylaw 2.2 continued to apply after the grace period, from January 1, 2002 onward. 49 Since bylaw 2.2 complied with the types exception in section 6.4(2) of the regulations (being a formula for sharing operating expenses for types of strata lots identified in the bylaws), bylaw 2.2 required the strata corporation to allocate a contribution to its operating fund according to type of strata lot.
72.(3) The strata corporation may, by bylaw, take responsibility for the repair and maintenance of specified portions of a strata lot.
For example, suppose a residential strata complex contains 20 strata lots, and there are gas fireplaces in 12 of the strata lots; (the “gas-fireplace strata lots”). In each case, the gas fireplace is part of the respective strata lot. Suppose also that as the result of an owner’s attempt to repair his own gas fireplace, a dangerous gas leak occurred, prompting the strata corporation to take over maintenance of the gas fireplaces. To do so, the strata corporation passes a bylaw requiring the strata corporation to maintain the gas fireplaces.
We now have a bylaw requiring the strata corporation to repair specified portions of some (the 12 gas-fireplace strata lots), but not all strata lots (all 20 strata lots). Imagine that, for the next fiscal year, the strata corporation budgets $2,000 from the operating fund for gas-fireplace maintenance. Ordinarily, the general rule requires every strata lot to contribute to the cost, according to unit entitlement (in this example, all 20 strata lots). Since we have a specified-portions bylaw, however, only the 12 gas-fireplace strata lots must contribute to this operating expenditure, according to unit entitlement.
Where the CRF applies to an expense, the Strata Property Act and regulations create these exceptions.
The section 100 exception is described earlier in this chapter.
If these requirements are met, a strata corporation must apportion a contribution to the CRF to a particular type of strata lot in accordance with the amended bylaw.
While bylaw 2.2 itself did not explicitly identify the different types of strata lot in question, elsewhere the strata corporation’s bylaws referred to apartment and townhouse units as the two different types. From 1992 through 2004 (except for one brief, irrelevant period), the strata corporation allocated expenditures from both its operating fund and CRF according to type, based on bylaw 2.2.
In Mason, an important issue was whether after July 1, 2000, when the Strata Property Act came into force, the amended bylaw authorized the strata corporation to allocate CRF expenses according to type. The court found that after the Strata Property Act came into force, bylaw 2.2 continued to require the strata corporation to allocate CRF expenditures according to type.
Finally, where this narrow CRF exception occurs, it appears to also serve as an exception in the case of a special levy. Where a special levy is approved, the general rule requires every strata lot to contribute according to unit entitlement. In Mason, the court held that where a strata corporation meets the criteria for this narrow CRF exception, then the exception also applies to permit the corporation to impose a special levy according to type of strata lot If so, a strata corporation must allocate contributions to the special levy according to type, as explained below.
Where a strata corporation approves a special levy for repairs, the general rule requires every strata lot to contribute, according to unit entitlement. 61 The general rule applies unless one of the following exceptions exists.
Where there is a unanimous resolution, this provision allows a strata corporation to depart from the ordinary rule that requires every strata lot to contribute to a special levy according to unit entitlement. Instead, the strata corporation might, for instance, require only some strata lots to contribute to the special levy, so long as it is fair and supported by a unanimous vote. For example, suppose a strata development consists of 20 townhouses situated near a busy street with a lot of traffic noise. Suppose, too, that the five townhouses nearest the street are separated from the road-way by a wide strip of grass that is common property. Assume that the strata corporation requires a special levy to raise $25,000 to install a landscaped sound barrier along the grassy strip. Since the five townhouses nearest the street will most directly benefit from this repair, the owners might agree by unanimous resolution under section 108(2)(b) of the Act to allocate the whole expense solely to the five townhouse strata lots , shared equally among them.
Using some of its broad powers under the Strata Property Act, the British Columbia Supreme Court has occasionally remedied a repair dispute by ordering what amounts, in effect, to an exception to the general rule. Such an order typically authorizes a strata corporation to require only some strata lots, rather than all of them, to contribute to a particular expenditure.
In Fraser v. Strata Plan VR 1411, the Supreme Court of British Columbia again found significant unfairness in the allocation of some repair expenses. To remedy the situation, the court ordered that all the owners were deemed to have passed a section 100 resolution under the Strata Property Act. 68 The section 100 exception is explained earlier in this chapter.
Briefly, section 100 of the Strata Property Act allows the owners to override the general rule by passing a unanimous resolution to change the formula for calculating each strata lot’s share of a contribution to the operating fund, the CRF or a special levy, as the case may be. 69 The court ordered the resolution filed in the Land Title Office to make the resolution enforceable in accordance with the Act. In Fraser, the court used the section 100 exception to override the general rule by substituting a different formula for calculating each strata lot’s contribution to the cost of repairs.
Cases where the court finds significant unfairness tend to be fact-driven and difficult to achieve. While the Chow and Fraser cases each depended on their respective facts, both cases shared certain features. Both cases emphasized a well-established past practice of allocating certain expenses to only some strata lots, rather than to all. Each case involved a rather abrupt departure from past practice so as to suddenly apply the general rule requiring every strata lot to contribute to a costly, major repair.
A strata corporation, or alternatively, a section, may spend money for the benefit of all, or some, of the strata lots in the section.
The requirements that govern how a strata corporation allocates expenses among the owners, as described earlier in this chapter, apply in a similar fashion when a strata corporation spends money for the benefit of strata lots in a section. 72 There is a general rule with some exceptions.
Where an expense of the strata corporation relates solely to strata lots in a section, the general rule is that every strata lot in the section must contribute to the expense according to unit entitlement. 73 In this work, this is called the general rule for a section.
Section 195 provides that: “expenses of the strata corporation that relate solely to the strata lots in a section are shared by the owners of the strata lots in the section” in accordance with the specific formula described in section 195.
For purposes of this dispute, the importance of s. 195 is that it speaks of expenses of the strata corporation that relate solely to the strata lots in a section.
In a manner similar to the way that the Strata Property Act and its regulations establish exceptions to the general rule in a strata corporation, the legislation creates some exceptions to the general rule for a section. If an exception applies, then the strata corporation must allocate the expense among only some, or perhaps to only one, of the strata lots in the section. The exceptions to the general rule for a section are set out below.
In addition, there are exceptions to the general rule for a section that depend which fund is used to pay for an expenditure.
The Strata Property Act creates different exceptions, depending whether the strata corporation, for the benefit of strata lots in a section, spends money out of the operating fund or the out of the CRF. These fund-based exceptions are described below.
Recall how the Strata Property Act restricts the use of each fund. To determine if a fund-based exception to the general rule for a section applies, a strata corporation first must decide whether the expense in question falls within the definition of the operating fund or the CRF. The two funds are described earlier in Chapter 15, Finances.
Recall that the operating fund is for common expenses that occur at least once a year. 78 If a proposed expenditure typically occurs at least once or more per year, the operating fund must be used to pay the expense.
Under the general rule for a section, if a contribution to the strata corporation’s operating fund relates solely to strata lots in a section, the contribution must be borne by every strata lot in the section according to unit entitlement. 79 The general rule for a section applies unless an exception exists. Where the strata corporation’s operating fund is used to pay for a repair that relates solely to strata lots in a section, then in addition to the section 100 exception noted above, the following exceptions to the general rule for a section may also occur.
Where a strata corporation uses its operating fund for repairs that relate solely to strata lots in a section, and the repairs involve work on one or more of the strata lots in that section, there appear to be two exceptions which require the corporation to depart from the general rule for a section. The first exception involves identifying a type of strata lot in the bylaws of the section. The second exception applies where a section, in its bylaws, takes responsibility to repair specified portions of some, but not all, strata lots in the section. Before either exception applies, certain criteria must be met.
The law governing types of strata lot is explained earlier in this chapter.
According to section 11.2(2) of the regulations, if a contribution to the strata corporation’s operating fund relates to and benefits only one type of strata lot in a section, and that type is identified as a type of strata lot in the bylaws of the section, the contribution is shared only by owners of strata lots of that type based on unit entitlement.
In the case of a types exception to the general rule for a section, presumably the same requirement for exclusiveness applies. That is, where a type of strata lot is identified as a type in the bylaws of a section, this exception only applies if the expenditure from the strata corporation’s operating fund, “relates to and benefits only one type of strata lot.” In other words, the expenditure must relate to that type of strata lot exclusively.
The Strata Property Act acknowledges that a section may enact its own bylaw to identify a type of strata lot within the section for the purpose of allocating expenses, including repair expenses. 84 For information about the procedure for a section to enact a bylaw, see Chapter 10, Sections.
If a section wishes to create its own types bylaw, the section should first obtain legal advice, especially given the law concerning types of strata lot, as explained earlier in this chapter.
In some cases, a strata corporation had, for many years in its annual budget identified different types of strata lot in a section, for the purpose of allocating expenses. In other situations, under the former Condominium Act the strata corporation had long ago filed an amended bylaw to identify different types of strata lot in a section, again for the purpose of allocating expenses.
If on July 1, 2000, when the Strata Property Act came into force, a strata corporation, in its budget prevailing on that date, relied on section 128(2) of the former Condominium Act, quoted earlier, or a similar bylaw, to allocate expenses according to different types of strata lot within a section, then the transition provisions permitted the corporation to continue allocating expenses on that basis until December 31, 2001, subject to the strata corporation’s bylaws.
The reference in the transition provisions to a “similar bylaw” means a statutory bylaw in a predecessor statute that is similar to the statutory bylaw in section 128(2) of the Condominium Act, quoted above.
During the grace period for bylaws until December 31, 2001, a strata corporation could pass a bylaw to identify one or more types of strata lot within a section. 87 Such a bylaw permits the strata corporation to allocate operating expenses according to type of strata lot within the section. The transition provisions allowed the strata corporation to enact the bylaw so long as it corresponded to the way the corporation’s budget (as at the time the Strata Property Act came into force) identified types of strata lot within the section. For the purpose of section 11.2(2) [the exception for a type of strata lot within a section, quoted earlier], the wording of the regulations suggests that the strata corporation’s bylaw apparently has the same force as if it was enacted by the section as part of the section’s bylaws. 88 During this grace period, it appears that the strata corporation could enact its types bylaw by majority vote at a general meeting.
If a strata corporation relied on an amended bylaw previously filed under the Condominium Act to apportion contributions according to types of strata lot within a section, the bylaw may still apply under the Strata Property Act, depending on the circumstances. If so, under the Strata Property Act, the bylaw may continue to require the strata corporation to allocate contributions to the operating fund according to different types of strata lot within a section, if certain criteria are met.
According to the general rule for a section, if a contribution to a strata corporation’s CRF relates solely to strata lots in a section, then every strata lot in the section must share the contribution on the basis of unit entitlement. The general rule for a section applies unless an exception exists. 90 To qualify for an exception, certain conditions must exist.
Where the strata corporation’s CRF is used to pay for a repair that relates solely to strata lots in a section, the following exceptions to the general rule for a section may occur.
To preserve such a bylaw in the case of a section, the transition provisions establish these criteria. First, the amended bylaw must have been filed at the Land Title Office before July 1, 2000, when the Strata Property Act came into force. Next, the bylaw must apportion contributions to the strata corporation’s CRF, “as a common expense according to type of strata lot.” 92 Presumably, in the case of a section, this wording requires that the bylaw apportion such contributions according to type of strata lot in a section. Last, the specific type of strata lot must be “. . . a type identified in the bylaws of the corporation or a section.” 93 It appears that the identification of the type of strata lot in question does not have to actually occur in the specific bylaw, so long as the type is reasonably identified somewhere in the bylaws of the strata corporation or the section.
If these requirements are met, where a contribution to the strata corporation’s CRF pertains only to one type of strata lot in a section, the strata corporation must allocate the contribution to that type of strata lot within the section, in accordance with the amended bylaw. In other words, the contribution will be shared only by strata lots of that type within the section, on the basis of unit entitlement.
This means that if the strata corporation raises money by special levy for the benefit of only certain strata lots in the section, the general rule for the section applies, unless an exception exists.
Where a special levy is used to pay for a repair that relates solely to strata lots in a section, the following exceptions to the general rule may also occur.
Section 108(2)(b) of the Strata Property Act permits a strata corporation to override the general rule by passing a unanimous resolution to allocate a special levy on some other fair basis that does not directly involve unit entitlement. Section 108(2)(b) of the Act is quoted earlier in this chapter.
The exception for a previously amended bylaw that apportions contributions to a strata corporation’s CRF by type, explained earlier, may apply equally to a special levy, in the case of a section.
The Mason reasoning may also apply where the transition provisions preserve an amended bylaw that apportions contributions to the strata corporation’s CRF according to a type of strata lot in a section. If so, the same bylaw permits a strata corporation to allocate contributions to a special levy according to type of strata lot within a section. In other words, the authority in the bylaw to apportion a contribution to the CRF according to type of strata lot in a section likely includes the power, to the same extent, to allocate contributions to a special levy by type of strata lot in a section.107 If a strata corporation wishes to apply this reasoning to apportion, to a type of strata lot within a section, the contributions to a strata corporation’s special levy, the corporation should first obtain legal advice in the matter.
The Strata Property Act and the regulations do not explicitly deal with the case where a section itself, rather than the strata corporation, spends money for the benefit of some, or all, of the strata lots in the section.
(b) to budget and require section owners to pay strata fees and special levies for expenditures the section authorizes . . .
Presumably, the same provisions that govern how a strata corporation may allocate expenses that benefit some or all of the strata lots in a section, as described above, apply equally to the section itself, subject to any necessary modifications. If a section, in a matter relating solely to the section, spends money to repair strata lots in the section, the expense is a common expense of the section. That is, every strata lot in the section must contribute to the section’s expenditure according to unit entitlement. If a section wishes to depart from the general rule that all the section owners are in it together by apportioning contributions to the section among some, or to only one, of the owners within the section, the executive of the section should first obtain legal advice.
In 2001, for instance, in The Owners, Strata Plan LMS 608 v. The Apartment Owners of Strata Plan LMS 608 et al., the Supreme Court of British Columbia found that section 35 of the Interpretation Act preserved certain rights of the applicants that accrued to them under the former Condominium Act. 102 Even though the Strata Property Act repealed the Condominium Act, the Interpretation Act allowed the court to apply the relevant provisions of the Condominium Act to allocate repair costs to only some, rather than all, of the owners.
Some of the earlier repair cases are confusing because they overlook restrictions on the use of the operating fund and the CRF respectively, depending on the situation. When reading repair cases, it is important to keep these restrictions in mind.
The later cases better take into account these fund restrictions. Two of the leading, later cases are Strata Plan LMS 1537 v. Alvarez 103 and Coupal v. Strata Plan LMS 2503, 104 both of which are described below.
In 2003, the Supreme Court of British Columbia took a different approach. In Strata Plan LMS 1537 v. Alvarez, 106the court reviewed its previous decisions to date, including the LMS 608 case, and carefully analyzed the Strata Property Act scheme for allocating repair costs. The court concluded that the detailed provisions in the Strata Property Act reveal the legislature’s intention to resolve repair disputes with the new statute. To the extent that the earlier LMS 608 case depends on the Interpretation Act to preserve certain rights under the former Condominium Act, the court in Alvarez rejected the reasoning in LMS 608. In part, the court in Alvarez justified its departure from the court’s previous approach in LMS 608 because, in the earlier case, the court did not consider the detailed transition provisions in the Strata Property Act.
In Alvarez, the court held that the scheme in the Strata Property Act governs repair disputes. This means that on or after July 1, 2000, the Strata Property Act applies, except only for those specific cases where a transition provision in the Strata Property Regulation preserves the right for a limited time to continue using the former Condominium Act approach to allocating expenses. The following Case Study summarizes what happened in the Alvarez case.
The strata development blended a heritage home built in 1904 with an apartment building built in 1994. The heritage home held two strata lots. The apartment portion consisted of six apartments.
The building envelope in the apartment portion, built with all the benefits of modern technology, leaked. The strata corporation estimated that it would cost approximately $160,000 to repair the building envelope for the apartment units.
Initially, the strata corporation’s bylaws included the statutory bylaw in section 128(2) of the Condominium Act, quoted earlier in this chapter.
On July 1, 2000, the Strata Property Act repealed and replaced the former Condominium Act.
On October 15, 2001, the owners unanimously passed a resolution allocating among all the owners the cost to repair the building envelope in the apartment portion of the complex.
The applicants owned a strata lot in the heritage portion of the development.
Despite previously consenting to the resolution, the applicants claimed that it was invalid. The applicants argued that the Condominium Act governed the repairs, and that section 128(2) of the bylaws required the strata corporation to allocate the cost to repair the apartments’ building envelope solely to the owners of the apartment units.
The court found that the Strata Property Act applied to the dispute, not the former Condominium Act. Consequently, the general rule applied; every strata lot must contribute according to unit entitlement unless an exception exists. Since the expenditure to repair the building envelope was an unusual expense, the funds must come from the CRF or a special levy. In the circumstances of this case, there was no evidence to justify any of the exceptions that the Strata Property Act permits where a CRF or a special levy is used to fund repairs. Since the Strata Property Act required everyone to pay, the resolution was consistent with what the law required. The 2001 resolution in Alvarez was valid and the owners of the heritage building strata lots must contribute their share of the cost to repair the modern apartment building. The general rule governed; every strata lot must contribute to the repairs.
In November 2004, in Coupal v. Strata Plan LMS 2503 107 the British Columbia Court of Appeal settled which statute governs. In Coupal, the Court of Appeal approved the approach previously taken in the Alvarez case. The Court of Appeal in Coupal held that on or after July 1, 2000 the scheme in the Strata Property Act applies, except only for those specific cases where a transition provision in the Strata Property Regulation preserves the right for a limited time to continue using the former Condominium Act approach to allocating expenses.
In Coupal, the residential development consisted of a 1912 heritage building plus seven new buildings. The heritage building had 12 strata lots, while the new buildings together contained 76 strata lots. When the strata corporation was formed in the 1990s, the corporation’s bylaws were the Standard Bylaws under the former Condominium Act. Those bylaws included section 128(2) of the Condominium Act, quoted earlier in this chapter. In effect, that bylaw required that where a strata corporation consisted of more than one type of strata lot, then expenses attributable only to one particular type of strata lot must be allocated solely to that type based on unit entitlement.
On July 1, 2000 the Strata Property Act repealed and replaced the former Condominium Act. In 2001 and 2002, the strata corporation approved several large special levies for repairs to building envelopes in the new buildings, and for related litigation. The owners in the 12 heritage units objected to contributing to the special levies on the basis that their strata lots were of a different type.
At the suggestion of, and with the consent of all parties, in Coupal, the Supreme Court of British Columbia assumed that the standard bylaw in section 128(2) of the former Condominium Act governed the special levies in 2001 and 2002. Applying section 128(2) of the Condominium Act, the Supreme Court found that the 12 strata lots in the heritage building were of a different type than those in the new buildings. Since the repairs and litigation involved only the new buildings, only the owners of strata lots of that type must contribute to the costs. The owners of the other type of strata lot, the 12 strata lots in the heritage building, did not have to contribute to the cost of the repairs.
On appeal in Coupal, the British Columbia Court of Appeal overturned the decision of the Supreme Court. The Court of Appeal held that the Strata Property Act governed the dispute, not section 128(2) of the former Condominium Act. Even though all parties to the dispute originally agreed in the court below that the Condominium Act applied, that agreement was wrong in law. It was not in the interest of justice to affirm the decision of the court below made on the basis of the lawyers’ mistaken view of the law.
For the reasons explained above in the Alvarez case, the Court of Appeal in Coupal confirmed that on or after July 1, 2000, the scheme in the Strata Property Act applies, except only for those specific cases where a transition provision in the Strata Property Regulation preserves the right for a limited time to continue using the former Condominium Act approach to allocating expenses.
Consequently, in the Coupal case, the Court of Appeal found that since the Strata Property Act governed the dispute, the general rule applied. Every strata lot must contribute according to unit entitlement. The owners of the 12 strata lots in the heritage building must contribute to the cost of repairing the new buildings. In other words, every owner must contribute to repairing the buildings in question.
Phasing allows a developer to add strata lots and common property to a strata plan over time. This is done by filing the strata plan in phases. For more information about phases, see Chapter 31, Phases.
Phasing alone does not create an exception to the general rule. This means that even in a phased development, the general rule applies unless an exception exists, as described later in this chapter. For instance, the general rule requires every owner to contribute to the cost of repairs according to unit entitlement no matter whether the owner’s strata lot is in one phase or another. The general rule applies unless an exception exists.
Ms. Stubbs submits that she understood from her realtor and from the developer that the Phase 1 owners would be responsible for the repair costs to the Phase 1 buildings. If that advice was given, it is unfortunate. It is incorrect. All owners in Strata Plan LMS 2153 are responsible to pay for the repairs to the Phase 1 buildings based on their respective unit entitlements.
Some individuals mistakenly try to determine who must pay for a repair on the basis of whose insurance covers the problem. This is wrong. Whether the strata corporation, or an owner or tenant, or some or all of them have insurance has nothing to do with determining who must pay for a repair. The liability to pay for a repair is determined according to the Strata Property Act and the regulations, as described in this chapter. For an illustration of the irrelevance of insurance to the duty to pay for a repair, see “Insurance v. Duty to Repair” in Chapter 16, Insurance.

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