Changes to Strata Rules

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Big Change to Strata Rules

Significant changes have been recently made to the strata rules.  The Vrecko Real Estate Group explains what they are and how they will affect you when buying and selling a strata title property.    

On November 21, 2022, Bill 44 was introduced and took immediate effect to change certain key by-laws to all strata properties in the province of BC.  These changes to strata rules affect rental rules, age restrictions, and electronic meetings.  

No Rental Restrictions Allowed

  • There shall be no rental restrictions authorized in any strata corporations in BC.
  • A developer will no longer be forced to issue Rental Disclosure Statements and strata will not need to keep those records.
  • The strata corporation will not be allowed to screen tenants, authorize screening criteria, get the approval of tenants, require the insertion of terms in tenancy agreements, or restrict the rental of a strata lot.

The most significant change to the strata rules here is lifting rental restrictions on those strata buildings that currently do not allow rentals.  

As a buyer of a strata property, you no longer need to limit your search if you plan to use the property as a rental.  This will give the buyer more options in buildings that were restricted before the new change in the strata rule.  

If you are a property owner and considering selling your condo in Kelowna or the area, this change in the strata rule will benefit you if you are currently in a building with restrictions. 

The Upside

This change could provide more rental options for those looking for rental units and attract investors to purchase rental units in buildings they previously could not.  

The Downside

While the change could provide more rental options, some property owners prefer when buildings are mainly owner-occupied.   Furthermore, strata councils now do not have the right to be involved in the screening process which may be risky if a homeowner is not familiar with the process.  

Age restrictions

  • Age restriction bylaws will only be allowed for buildings that are designated for ages 55 and up.
  • The age restriction would not apply to a caregiver who resides in the strata lot, providing care to another person who lives in the strata lot and is dependent on caregivers for disabilities, illness, or frailty.

Before the change to the rule, condos, and townhouses in Kelowna had the right to have age restrictions under 55+.  Aside from the well-known 55+ communities, other common age restrictions were 19+ and 45+.  

Electronic meetings

All strata corporations will be allowed to hold yearly and special general meetings by phone or other electronics (no bylaw required)

Issues using voting cards and secret ballots at electronic general meetings will be decided by:

The electronic means must enable the chair of the meeting to identify whether a person attending by electronic means is an eligible voter.

There will be no requirement to issue a voting card to an eligible voter in a yearly or special general meeting by electronic means.

An eligible voter attending a yearly or special general meeting by electronic means will not be required to vote by secret ballot.

Pets

The section about limits to pets is being reworded for clarification.

Additional information

Strata may continue to have bylaws that prevent or diminish short-term rentals such as Airbnb and VRBOs.

Residential Tenancy Branch policy guidelines have been updated to show that strata can grant a notice to terminate a tenancy and apply to the Residential Tenancy Branch for conflict settlement in place of the landlord. Visit the BCFSA website here to learn more.

Home Buyers Rescission Period

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Change in the Real Estate Rules and What It Means to You

“Cooling off Period” for Buyers known as the Home Buyers Rescission Period

Coming off an unprecedented real estate market, a change in the real estate market rules was made by the government of BC to protect homebuyers.  In this article, we provide clarification on how this change will affect you as a consumer.   

Effective January 3, 2023, the Home Buyers Rescission Period (HBRP) allows the buyer of a residential property the opportunity to rescind their offer within 3 days of acceptance of the offer.  This comes with a financial penalty and cannot be waived by the buyer or seller.  

Once the contract of purchase and sale is accepted by both the buyer and seller the rescission period begins the next business day.  This allows the buyer 3 business days to rescind the offer.  If the buyer chooses to rescind their offer during this time, a Notice to Rescind shall be delivered to the seller along with the rescission fee. 

If the offer contains subjects (financing, home inspection, etc.), this runs concurrently with the rescission period. This new change in real estate does not begin after subjects are removed.

Rescission Fee

If a rescission notice is served to the seller, the buyer must pay the seller 0.25% of the purchase price of the property.  

Example: 

Purchase price:  $ 1,100,000.00

Rescission fee:  $ 2,750.00

The Home Buyer Rescission Period applies to the following types of real estate transactions:

  • Single-family detached property
  • Semi-detached house
  • Townhouse or duplex
  • Condo or other multi-unit dwelling
  • Residential strata lot
  • Manufactured home

The team at Vrecko Real Estate Group shares some of their top questions:

FAQ: 

Why make this change in the real estate rule?

This rule was implemented as a result of the unprecedented estate market of 2020 and 2021.  Where home buyers were forced to make a quick decision, sometimes sight unseen with no conditions to protect them.  If a homebuyer wanted to secure a property during this time, in many cases the only option when competing with multiple offers was to make their offers as appealing as possible. Often resulting in unconditional offers, thousands (sometimes hundreds of thousands) of dollars over the asking price.  This rescission period will now allow buyers to secure a property but have the option to back out within the 3 days if they get “cold feet”.  This comes with a fee, however, will give the buyer peace of mind.  

How does this affect someone Selling?

As a home seller, this change in the real estate rule won’t dramatically affect their ability to sell to a qualified buyer.  After an accepted offer, while waiting for the rescission period to expire, the homeowner is still able to show the property to potential buyers and also consider any backup offers.  The difference will be when an unconditional offer is accepted, the property is not sold until that period expires.  If the rescission is exercised and the Notice of Rescission is delivered, the seller is entitled to 0.25% of the purchase price and is free to move on to the next offer.  

Why now?  Hasn’t the market cooled off already? 

Some argue this change in the real estate rule comes a little too late.  Yes, the real estate market has seen a dramatic decrease in sales over the last 6 months.  In most markets, this decrease has put an end to the frenzy which led to multiple offer situations.  

Regardless, this change in the real estate rule is here to stay and will be there to protect future home buyers.  

 

For more information on the Home Buyer Rescission Period visit the BCFSA website.