THE NEW FORM B Much ado about Parking

THE NEW FORM B: Much ado about Parking and Storage Lockers Presented by Veronica P. Franco PAMA – Italian Cultural Centre October 2, 2013

The New Form B: Information Certificate Introduction Starting January 1, 2014, strata corporations will have to use a new Form B, which will include the following information (s. 59(l. 1)): – Parking stall assignments; and – Storage locker assignments. 2

The New Form B: What’s all the fuss? Section 59(5) and (6) (5) The information…disclosed in a certificate is binding on the strata corporation in its dealings with a person who relied on the certificate and acted reasonably doing so; (6) On application by the strata corporation, by an owner or by a person affected by a certificate, the Supreme Court may make any order it considers just in the circumstances to give effect to or relieve the strata corporation from some or all of the consequences of an inaccurate certificate. 3

Is this really new? • Section 35(1)(c)(i) already required a strata corporation to maintain an owner’s list that included parking stall numbers. • There is no corresponding requirement for storage locker assignments. • Without consequences, those strata corporations that did not allocate parking themselves paid little attention to the accuracy of the parking stall assignments on the owner’s list. 4

What do you do now? “Simple” 3 step process: 1. Obtain a copy of the disclosure statement(s), all the registered land title documents that apply to parking allocations, and the strata corporation’s bylaws to determine how the parking has been allocated. 2. Conduct an audit of the parking stalls and storage lockers. 3. If there are discrepancies between the allocation set out in the documents and the audit (actual use), go to the affected owners to determine if they have documents to support the current situation. 5

Allocation as part of the Strata Lot Parking Stalls as part of the Strata Lot In a number of “older” strata corporations, parking is marked as part of the strata lot on the strata plan. Often, it is noted as follows: PT SL 35 6

The Form B When Parking is Part of the Strata Lot 1. Step 1: Obtain strata plan and other documents. Parking is part of the strata lot according to the strata plan. The bylaws do not conflict; 2. Step 2: Proceed with the parking audit to confirm that people are using the parking stalls that are part of their strata lot (or if not, they have permission of the other strata lot owner). 3. Step 3: Where an owner has permission to use another owner’s parking stall, find out if it is an informal (verbal) temporary arrangement or if it is formal (lease, for example). What happens if the strata plan and the parking audit doesn’t match!!! 7

The Form B When Parking is Part of the Strata Lot What happens if the strata plan and the parking inventory don’t match? • IMMEDIATELY CALL A LAWYER! Options: 1. Ask the owners with wrong parking stalls to provide documents showing how they have their parking. You will be looking for leases or assignments or some other “legal” document that gives the owner permission to use the wrong stall. Obtain legal advice to determine if enforceable. 2. If no such document exists, ask the owners to get a lawyer to “formalize” the allocation if they want their arrangement to be permanent. 3. If the strata corporation is small enough, affected owners can amend the strata plan. They will need a unanimous vote and an explanatory plan. 4. Consider noting the discrepancy in parking on the Form B. 8

The Form B When Parking is Part of the Strata Lot Noting the Discrepancy in the Form B: If the discrepancy cannot be easily fixed and the arrangement is longstanding and without dispute. Consider: (ii) if yes, complete the following by checking the correct box(es) and indicating the parking stall(s) to which the checked box(es) apply. Parking stall(s) number(s) _____ is/are part of the strata lot “but the current owner of the strata lot is using parking stall _____, which is part of strata lot ____”. • Attach documents: owner documents granting another owner the right to use their parking stall 9

Allocation as LCP on the Strata Plan The Strata Plan notes the parking stall or storage locker as limited common property. It will often look like this: LCP for SL 35 But check the legend on page 1 of the strata plan. You may also see: P 35 10

The Form B When Parking is LCP on the Strata Plan 1. Step 1: Obtain strata plan and other documents. They should confirm that parking is designated limited common property; 2. Step 2: Proceed with the parking audit to confirm that people are using the correct stalls (or if not, find out if they have permission of the other strata lot owner). 3. Step 3: Where the owner has permission of another owner to use his/her stall, obtain documents to support this consent. What happens if the strata plan and the parking audit doesn’t match!!! 11

The Form B When Parking is LCP on the Strata Plan If the discrepancy cannot be easily fixed and the arrangement is longstanding and without dispute. Consider: (ii) if yes, complete the following by checking the correct box(es) and indicating the parking stall(s) to which the checked box(es) apply. Parking stall(s) number(s) is/are limited common property “but the current owner of the strata lot is using parking stall _____, which is part of strata lot ____”. Attach documents: owner documents granting another owner the right to use their parking stall 12

Allocation as Common Property on the Strata Plan If the parking and storage is noted as common property on the strata plan, there are many possibilities: 1. The strata council has the power to allocate on the basis of short term exclusive use; 2. The strata council rents out the parking stalls or storage lockers pursuant to a bylaw or rule; 3. The owners passed a ¾ vote resolution designating the common property to LCP – no change in strata plan. 4. The developer assigned the parking and/or stalls pursuant to a lease, option to lease, or license agreement. 13

Common Property: Short Term Exclusive Use When Does this arise? • The developer does not designate parking stalls or storage lockers as limited common property, strata lots, or parts of a strata lot; and • The developer does not formally assign or “sell” off parking stalls to first purchasers. – There will be no documents that suggest any formal arrangements with the developer. – The disclosure statement will usually state the total number of parking stalls and how many per unit. However, there will be no option to purchase additional stalls or lockers. 14

Common Property: Short Term Exclusive Use – You will see this in older and “smaller” strata corporations. – In may cases, however, the strata council does not believe it is in control of the allocation because people have used the stall or locker since the beginning of time and everyone is of the belief that the stall or storage locker “goes” with that particular strata lot. This belief is incorrect! 15

Common Property: Short Term Exclusive Use How is the allocation accomplished? • Short term exclusive use – Under the Condominium Act, the standard bylaws gave the strata corporation the power to grant exclusive use over common property. The grant could be for a specified period or indeterminate. However, the bylaw also provided that the strata corporation could end the arrangement upon reasonable notice. – The Strata Property Act doesn’t have this bylaw. It has section 76, which grants a similar power to a strata corporation. However, the maximum term is for one year, although renewable. Similarly, it can be cancelled earlier upon reasonable notice. 16

Common Property: Short Term Exclusive Use Bylaws? • Where the strata corporation was aware that it controlled the parking or lockers, there may exist bylaws that set out the method of allocation: – Number of stalls or lockers per strata lot; – How to apply for parking or lockers; – First come, first served – Waiting lists – Availability of extra parking or lockers 17

Form B and Common Property Short Term Exclusive Use: (iii) For each parking stall allocated to the strata lot that is common property, check the correct box and complete the required information. • Parking stall(s) number(s) _______is/are allocated with strata council approval* The form specifically notes that the council controls parking and storage allocation, which could change at any time. There may be resistance where a strata lot and a specific stall and/or locker has been attached since the beginning of time. 18

Common Property: Rented Stalls and Lockers When Does this arise? • The developer does not designate parking stalls or storage lockers as limited common property, strata lots, or parts of a strata lot; and • The developer does not formally assign or “sell” off parking stalls to first purchasers. – There will be no documents that suggest any formal arrangements with the developer. – The bylaws or rules of the strata corporation authorize a user fee, which is usually referred to as “rent” 19

Common Property: Rented Stalls and Lockers Authority to Charge a User Fee • Strata Property Act, s. 110: a strata corporation must not impose user fees for the use of common property other than as set out in the regulations. • Regulations, s. 6. 9: a user fee can be imposed, only if: (a) the amount of the fee is reasonable; (b) the fee is set out (i) in a bylaw, or (ii) in a rule and the rule has been ratified under section 125 (6) of the Act. 20

Common Property: Rented Stalls and Lockers Reasonable User Fee: Strata Plan LMS 3883 v. De Vuyst • Whether a user fee is “reasonable” depends on: (a) prevailing market conditions at the time; and/or (b) the costs incurred by the strata corporation. 21

Form B and Common Property Strata Corporation rents out stalls or lockers (iii) For each parking stall allocated to the strata lot that is common property, check the correct box and complete the required information. Parking stall(s) number(s) ______ is/are allocated with strata council approval and rented at $_____ per month* 22

Common Property Strata Plan – LCP Designation There a number of ways to create LCP. Section 74 of the Strata Property Act allows the strata corporation to designate common property as limited common property by a ¾ vote resolution passed at a general meeting. The resolution is filed at the Land Title Office together with a sketch plan. This method of designation does not require an amendment to the strata plan. 23

Lease, Option to Lease, and License Lease: • A lease is a tenancy, which if it is for a term greater than 3 years is called a “long term lease”. Long term leases create an interest in land. To be enforceable as against third parties, they need to be registered at the land title office. Because it creates an interest in land, tax must be paid if it is registered against title. • Accordingly, if the arrangement is by lease, it is unlikely to be registered in the land title office. 24

Lease, Option to Lease, License Option to Lease • An option to lease grants the developer the right to enter into a lease. An Option can be registered at the land title office. It must be registered to be enforceable as against third parties. An Option does not trigger tax. As a result, an Option is general ly registered at the land title office against the title to the common property. • An option will set out the terms of the proposed lease. 25

Lease, Option to Lease, License • A license grants the user the right to use the common property without having exclusive possession over the common property. • A license is not an interest in land so cannot be registered at the land title office. 26

Leases, Options to Lease and License Characteristics of this Arrangement: • Strata plan says the parking/storage is common property; • Developer on behalf of strata corporation leases or grants a license over that portion of the common property that contain the parking and/or storage to a company related to the developer for a long period of time (i. e. 99 years) • The agreement gives the developer the power to assign a portion of its rights to purchasers and/or others. 27

Leases, Options to Lease and License Read the lease carefully: – some may give power to assign parking to non-owners or for the developer to keep to provide short term parking. – Generally, the developer has no ongoing repair and maintenance obligation or “rental fee” other than the initial lump sum fee, which is often quite low. – Also review the assignment agreement, which is between the lessee (company related to the developer) and the first purchaser. It may require any future assignments (i. e. to subsequent purchasers or other owners) to be delivered to the strata corporation to make the re-assignment effective. 28

Lease, Option to Lease and License Read the lease carefully (cont’d): – Owners may be entitled to “sell” or “transfer” parking stalls and/or storage lockers – Developers should provide a list of assignments at the first AGM (s. 20(2)(a)(viii) of the Strata Property Act; 29

Investigating Allocation List of documents needed to investigate allocations: 1. Disclosure Statement – Superintendent of Real Estate; 2. Lease or Option to Lease – strata corporation records, developer, or land title office; 3. License – strata corporation records, developer or land title office; 4. Strata Plan, bylaws, rules, and common property resolutions – strata corporation records and/or land title office; 5. Assignments, owner leases, etc – strata corporation records or individual owners; 30

Investigating Allocation Start: Look at Strata Plan and the Disclosure Statement • Strata Plan will tell you if you are dealing wth strata lot, LCP or common property. • Disclosure Statement indicates developer’s intention to enter into a lease, option to lease or license type of arrangement or give full control to strata corporation • Disclosure Statement is not binding on the strata corporation. Individual owners can sue developer if there is a material breach of disclosure statement. 31

Investigating Allocation Next: Follow Through with Disclosure Statement Intention • If the Disclosure Statement says a lease or similar arrangement will be in place, look for those documents as and assignments to determine if developer followed through on intention. If the developer did not, call a lawyer immediately! • If the Disclosure Statement suggests that no lease or similar arrangement is in place, look for: – the documents that would support such an arrangement to eliminate this possibility. If documents are found, call a lawyer immediately! – Common property resolutions and the bylaws to determine whether parking or lockers have been designated as limited common property. If it was done by bylaw, call a lawyer immediately 32

Investigating Allocation Final Step: • Check the title to the common property to determine that there are no easements or air space parcel agreements that provide parking to the strata corporation or grant parking to another strata corporation or other building. • If such arrangements are in place, call a lawyer for help! 33

Please direct inquiries or comments to: Veronica P. Franco, Partner, Clark Wilson LLP email: vpf@cwilson. com | direct: (604)891 -7714 www. cwilson. com THANK YOU