Canada: For Rent: Bill 44 And Its Impact On Rental Restrictions And Short-Term Accommodation Bylaws

Norent Estates is a small self-managed residential strata corporation in North Saanich, British Columbia. For years, Norent Estates has had a rental restriction bylaw limiting the total amount of permitted rentals to four strata lots. At its last Annual General Meeting, the community also passed a bylaw prohibiting owners from using and advertising their strata lots as a vacation accommodation. Recently, one of the Council members read a newspaper article about Bill 44 and wondered what impact, if any, its amendments had on their community's bylaws. Could Council continue to enforce its rental restriction bylaw so long as it remained registered in the Land Title Office? Did Bill 44 eliminate an owner's need to notify Council when they rented their strata lot? Is Council still able to restrict the use of a residential strata lot as vacation accommodation? Bill 44's arrival raised a million questions......

THERE'S A NEW LAW IN TOWN

The Strata Property Act, S.B.C. 1998, c. 43 ("Strata Property Act") is the main legislation that governs the creation and operation of strata corporations in British Columbia. This legislation operates in conjunction with a strata corporation's bylaws and rules, as well as several other provincial and municipal laws that regulate how persons can use and enjoy their strata properties. By default, British Columbia strata corporations are given the "Schedule of Standard Bylaws" appended to the Strata Property Act. A community is free to amend those bylaws as it sees fit, provided that their amendments do not conflict with the Strata Property Act or other laws.

For decades, strata corporations across British Columbia were free to pass rental restrictions subject to Strata Property Act requirements and its enumerated exemptions. However as of November 24, 2022, everything changed. Overnight, Bill 44 rescinded a strata corporation's ability to regulate or restrict rentals in their community. Several well-known sections of the Strata Property Act were repealed, and the legislation was left with a solitary, blanket prohibition on rental restrictions. Section 141 of the Strata Property Act now reads:

THE LONG AND SHORT OF IT

Despite Bill 44's eradication of rental bylaws, the ability of a strata corporation to regulate what has been historically coined "short-term accommodations" remains intact. Section 7.1 of the Regulations still allows strata corporations to levy a fine of up to $1,000 per day for each contravention of a "bylaw that prohibits or limits use of all or part of a residential strata lot for remuneration as vacation, travel or temporary accommodation". Notably, the legislation does not actually define the meaning of "temporary" accommodation. Just how temporary is a temporary occupancy? Strata corporations are evidently left open to follow their municipality's interpretation of this type of short-term use, or alternatively adopt their own bylaw definition to reflect the unique needs of their community. Time will tell how the Civil Resolution Tribunal and Courts interpret a strata corporation's short-term accommodation bylaw in the wake of Bill 44...

ON THE BOOKS

The hastened arrival of Bill 44 did not give strata corporations much time to consider what to do with their registered rental bylaws. Were long-registered rental bylaws still enforceable? Were strata corporations now required to repeal them? Technically, Bill 44's arrival immediately dissolved all rental bylaws across the province. Regardless of whether these bylaws remain "on the books" in the Land Title Office, they are no longer in force or effect. Although communities are not required to formally repeal these bylaws from their Land Title Office registrations, it is good housekeeping to review and update a community's bylaws every year to ensure they meet current legislative requirements, and to eliminate those bylaws that are no longer enforceable.

SAY WHAT?

Now that a strata corporation has no say in restricting or prohibiting rentals, does that mean that owners are no longer required to speak up when they rent their properties? No. Owners who rent all or part of their strata lots are still required to notify their strata corporation when they will be renting, and who they will be renting to. This notification is done by way of submitting a fully signed Form K "Notice of Tenant's Responsibilities" in the prescribed form to the strata corporation within two weeks of renting. Strata Corporations are also still required to maintain a current tenant list as part of their community's records, although there is no longer any requirement to disclose the number of rentals on a Form B Information Certificate.

THE ABC'S OF A FORM K

Landlords and Strata Councils must mind their p's and q's when it comes to the Form K. This is a critical record for managing rentals in strata corporations. It identifies the names of all tenants who will be renting a strata lot, the name of their landlord, and the time that their tenancy is scheduled to start. The Form K also reminds landlords and tenants of the tenant's responsibility to comply with a strata corporation's bylaws and rules as amended from time to time, not just the version they received before moving in. The Form K additionally reminds tenants that they are responsible for ensuring that their co-occupants and visitors comply with the community's bylaws and rules, failure of which could result in fines, denial of access to recreational facilities, or costs of remedying a contravention.

STEPPING IT UP

An owner's failure to deliver a signed Form K to their strata corporation has significant consequences under the Strata Property Act. For starters, it enables their tenant to end their tenancy agreement without penalty within 90 days of learning of their landlord's misstep (see: section 146, Strata Property Act). If a tenant wishes to exercise this right of early termination, then they are also entitled to reimbursement from their landlord for their "reasonable" moving expenses up to a maximum of one month's rent.

Following the arrival of Bill 44, strata corporations may also wish to step up their community's Form K requirements. Although strata corporations can no longer pass bylaws restricting rentals, communities are still able to pass bylaws reiterating an owner's requirement to submit a signed Form K to the strata on time. Depending on how that bylaw is drafted, owners in breach of this recordkeeping requirement could find themselves on the receiving end of fines of up to $200.00 for each day that a Form K remains outstanding, or other remedies including but not limited to cause for a strata corporation to end a tenancy early under section 138 of the Strata Property Act.

END OF THE LINE

The end of rental bylaws in BC does not mean the end of a landlord or strata corporation's ability to evict a problem tenant. Section 137 of the Strata Property Act allows an owner to evict their tenant on one month's notice under the Residential Tenancy Act if their tenant has repeatedly or continually contravened a "reasonable and significant bylaw or rule." Similarly, a strata corporation is able to step into the shoes of a landlord and evict a tenant when there has been a "repeated or continuing contravention of a reasonable and significant bylaw or rule... that seriously interferes with another person's use and enjoyment of a strata lot, the common property, or the common assets." Following Bill 44's arrival, the BC Residential Tenancy Branch policy guidelines were modified to pave the way for strata corporations to enforce this right of eviction at the Branch. At the time of writing, however, it is questionable whether this policy will be enough to expand the Residential Tenancy Branch's historically limited jurisdiction to preside over these kinds of strata disputes. Tick tock....

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.