The issue of whether a strata lot is residential can have significant impact on how the strata corporation operates. Of significant concern (in many cases) is whether there are both residential and non-residential strata lots which means that any bylaw change requires 3/4 vote approval from the residential units and 3/4 vote approval from the non-residential units. But how does a strata corporation know whether some of the units are residential or not?
The Court of Appeal of BC in the case of East Barrier Resort Limited v The Owners Strata Plan KAS 1819, 2017 BCCA 183, dealt with the issue of whether the strata corporation has purely residential strata lots or was mixed use with both residential and non-residential strata lots. The lower level Court had decided that, based upon the use of the strata lots, that all strata lots were residential, regardless of what the strata plan stated or what was in the disclosure statements. The Court of Appeal disagreed and overturned that decision.
East Barrier had argued that a portion of the strata lots were non-residential. If correct, several of the bylaws approved by the strata corporation (not approved by the supposedly non-residential strata lots) would be of no force and effect because they didn’t have the support of both the residential and non-residential strata lots.
To determine whether a strata lot is residential or not, the Court of Appeal noted that section 1 of the Strata Property Act defines a “residential strata lot” as “a strata lot designed or intended to be used primarily as a residence”. The Court further noted that:
“‘design’ and ‘intention’ must be determined by the documents prepared and filed at and around the inception of the development. Otherwise, there would be uncertainty concerning the proper voting procedures, filing requirements, and the applicability of numerous other provisions of the [Act] that rely on the definition of ‘residential strata lot’.”
In that case, the disclosure statements clearly noted that the design and intention was for there to be both residential and non-residential strata lots and the zoning of the strata corporation also provided for mixed use. Therefore, even though the notes on the filed strata plan for phases 1 and 2 of a 4 phase strata plan conflicted with the disclosure statement, this could not change the disclosure statements nor the zoning.
As a result, several of the bylaws were invalid because they didn’t have the required approval of the non-residential strata lots. As can be seen from this case, the issue of whether the strata corporation has both residential and non-residential units can require careful legal review of the documents creating the strata corporation and the strata plan may not have the entire answer.
In some cases, people are using their strata lots for residential purposes, but they are actually non-residential. This obviously becomes an issue when determining if bylaws have been correctly approved but some strata corporations may be operating incorrectly without knowing because they haven’t looked at the correct documents.