Spotlight on sections: Should sections have authority over common property?
September 21, 2016
BY Kevin Zakreski
BCLI is running a public consultation on complex stratas. It is asking for public input into proposed changes to the law governing sections, types, and phases. For information on how to participate in the consultation please visit the Strata Property Law Project—Phase Two webpage.
This post is part of a series that spotlights issues on sections, types, and phases discussed in the Consultation Paper on Complex Stratas. To read other posts in the series please click here.
Brief description of the issue
The Strata Property Act enables strata corporations to adopt “resolutions to designate limited common property . . . for the exclusive use of all the strata lots in a section” [emphasis added]. In contrast, a strata corporation has authority over common property, common assets, and strata lots. The limitations on sections’ authority has led to some operational confusion, particularly in connection with the duty to repair and maintain common property. Should sections’ authority be expanded?
Discussion of options for reform
One option would be to amend the Strata Property Act and give sections authority that corresponds to that of a strata corporation. Legislation in force elsewhere takes this more-liberal approach in granting section equivalents authority over common property. For example, section 47.1 of Saskatchewan’s act allows a bylaw respecting sectors (Saskatchewan’s equivalent to sections) to
- provide for the management, control, administration, use and enjoyment of the units, common property and common facilities in the sector;
- provide for the maintenance of the common property, common facilities and services units in the sector.
Tasmania’s legislation provides an example of another approach. Under the Tasmania act, a body corporate (the equivalent of a strata corporation) “may be divided into 2 or more separate bodies corporate” and, when this division occurs, the constituent documents for the bodies corporate “must define the functions and responsibilities of each body corporate and, in doing so, may create an administrative hierarchy with one or more bodies corporate at each level of the hierarchy.”
The potential problem with British Columbia’s comparatively narrow approach comes to light when it’s recalled that many of the operational conflicts involving sections arise from, as one judge put it, “the division of powers between the strata corporation and the section.” This division of powers has proved to be particularly contentious in relation to responsibility for repairs and maintenance of common property. In many cases, sections are created “in recognition of architectural differences between strata lots, calling for, for example, different sections for townhouses and apartment buildings. If the roofs, hallways, elevators, and other common areas of these buildings aren’t designated as limited common property for the use of the section then they don’t fall within the relevant provision of the act.
A recent case has considered the authority of a section to carry out repairs to common property. The court concluded that the “Act does not refer to the obligation of a section to repair and maintain common property as distinct from limited common property,” so “it appears that common property of the strata corporation remains the responsibility of the strata corporation to maintain.” The court went on to speculate that “[s]ections may take on responsibility for common property repair and maintenance of common property appurtenant to or adjoining the strata units in section if the bylaws permit it,” but since the bylaws at issue in the case did not take this step, it wasn’t necessary to form any conclusions on this issue. The issue does remain very much a live one, as many strata corporations have apparently created bylaws assigning to sections “responsibility for common property repair and maintenance of common property appurtenant to or adjoining the strata units in section.” But the act doesn’t provide explicit support for this practice. So the question arises whether it should, like the acts in other jurisdictions, expressly recognize that sections may have authority over common property.
There are several reasons for amending the act to allow for sections to be given authority over common property. Such an amendment would support the legislative goal of sections, which is to provide flexible governance models for complex stratas. There are many reasons for a strata corporation to want to adopt sections. In some cases, designating limited common property in favour of a section may be enough to meet the needs of the strata corporation. But in other cases this might not go far enough. Strata corporations appear to be filling in the gaps by adopting bylaws that, in one way or another, assign responsibility for repair and maintenance of common property to sections. Amending the act to make it clear that sections can have authority over common property would put these arrangements on firmer ground. It may also reduce operational conflicts and disputes between sections and strata corporations, by allowing a strata to work out a clearer division of powers between the strata corporation and its sections.
But there are also reasons to oppose allowing sections to have authority over common property. Such an amendment would further entrench sections in the legislation. It would also enhance their power within a strata development, while it chips away at the broader authority of the strata corporation. At least one commentator has wondered whether the existing list of corporate powers expressly assigned to sections goes too far and ends up being undermining the rationale of sections as representatives of different interests within the strata corporation. This proposed reform would be another large step in what could be seen as the balkanization of strata corporations that have sections. It also may be telling that, although many critics have identified this issue as a problem, no one has come out and directly said that the Strata Property Act should be amended to give sections authority over common property.
The committee’s tentative recommendation for reform
The committee had many concerns about extending the authority of sections to common property. There was a sense that such a reform could lead to confusion. For example, if a strata property suffered building-envelope failures and it was subject to four or five sections, then it could be difficult to determine which section is responsible for which portion of the needed repairs. Such confusion could end up breeding litigation.
The proposal could also have a detrimental aspect on the communal nature of strata-property living and cost sharing. It could serve to further entrench the tendency to use sections promiscuously, as a means to sever certain uses from the broader strata corporation. Finally, the committee took notice of the fact that there didn’t appear to be any vocal public support for reforming the law in this way.
The committee tentatively recommends:
The Strata Property Act should provide that bylaws respecting sections cannot provide for the control, management, maintenance, use, and enjoyment of common property.