One of the most common questions I hear from Buyers is, "Can I rent this property?". Here is a great article explaining the effect of a Developer's Rental Disclosure Statement in new construction and how rental restrictions work within a strata.
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Under the Strata Property Act1 (Act), a strata corporation may pass by-laws prohibiting or restricting the rental of strata units. A rental restriction by-law (RRB) must be filed at the Land Title Office and will take effect:
Despite a RRB prohibiting or restricting rentals, an owner may rent a strata lot under three scenarios:
In Strata Corp. LMS3442 v. Storozuk2, the strata sought recovery of $16,450 in fines from the owner, Mr. Storozuk, who had rented his strata unit in breach of a RRB prohibiting rentals which had been passed years after he bought his unit. Mr. Storozuk had bought a lot to build a home and tried to sell his unit to finance the project. When the unit did not sell, he emailed the strata stating he intended to rent his unit. The strata served Mr. Storozuk with a by-law infraction notice and he responded by asking the strata to consider his earlier email as an application for a hardship hearing, advising that he would attend an upcoming strata council meeting. At the meeting, the strata denied his application as he failed to provide sufficient evidence of financial hardship. The strata confirmed its decision in writing to Mr. Storozuk eight days later, contrary to the statutory requirement to render a written decision within seven days of the hearing. The strata's application for recovery of the fines was consequently dismissed. This case is a reminder that licensees selling stratas should ascertain their client's position on rentals, provide a copy of any RDS and/or RRB to the client and consider advising the client to seek independent advice regarding the ability to rent. Jennifer Clee |