Why you should never hire the strata company to manage your strata lot!.
Why you should never hire the strata company to manage your strata lot!.
We are not lawyers and one should always seek proper legal advice if they are unsure of the laws involved in their situation.
Many property management companies in BC offer both rental and strata management services. The strata companies are often selling the benefits of we manage the strata and if we are managing your rental in this property then we can manage your rental property better than anyone else. The reality is, that is not true?
What they are not telling you until it is time to sign the management contract is that when the strata company manages a rental in the same building, one of the two parties needs to be the primary client. What does being the primary client mean? It means when there is a dispute between the two parties, the strata and the tenant or the landlord, the management company is only able to represent the “primary” client. If you are not the primary client it means during the dispute when you ask your management company for advice they should advise you that they are unable to answer that question. We often hear them provide advice that is not correct because in many cases what is a benefit to the strata may not be a benefit to the landlord. This is called a conflict of interest.
When does a landlord need independent advice from the strata corporation?.
There are many situations where a landlord should have independent advice from the strata though the two most important areas are bylaw enforcement and insurance claims.
We see many strata corporations enforcing bylaw infractions on tenants without proper notice, or trying to enforce a bylaw that doesn’t exist. One of the most common ones is a move in or move out fee. Many strata have building managers who are collecting move in and more out fees they think are part of the building even when they do not have a move out bylaw. Many tenants just pay it or when a tenant fails to pay it the strata advise the owner it needs to be paid and they try to take it from the tenants deposit. This creates a dispute between the landlord and the tenant which did not need to occur.
Strata Corporations have a requirement to inform tenants not just the owners of any bylaw infractions they incur while residing at the property. We still see this as an ongoing issue where a management company is not sending the documents to the tenant saying they only communicate with the owners of the property. This is in contravention of the strata property act as tenants are residents in the building and have the right to the information on when they have breached the bylaws. There continues to be cases in front of the CRT where strata bylaw fines are being reversed due to the lack of providing a tenant with the information of the infraction or denying them the right to respond.
The other major area of concern for independent advice is when there is an insurance claim against your unit or when work has been performed in your unit by the strata corpaoation.
Strata corporations have insurance that covers the common prperty of the building. Inside the unit is not considered common property and is the responsibility of the owner.
For example If there is a water leak from another unit that affects your unit the strata may come and investigate to see if damage has occurred in your strata lot. This work is often performed by a restoration company and they may cut holes in the drywall in “your” strata lot. Often misunderstood is that the strata need’s your permission to cut the holes to investigate. If they do not have your permission then you could argue you did not authorize the work and they should repair it. Even if they do have your permission they are responsible to return it to paint ready condition. This gives you the opportunity to use their contractor or to choose to use your own contractor to repair the damage instead.
Another misunderstood issue with many strata corporations is the deductible. Every building has deductibles, and in the event of the water leak if the cost to repair exceeds the deductible then the strata insurance would be engaged to repair the damage. If you read your insurance documents you will see where your deductible amounts are for different occurences. In the past we would see some stratas choosing not to open a claim and repair the damage when the amount is just above the deductible amount. In turn they then send the owner an invoice to pay the deductible even though there was no claim.
Every home owner in the building has the right to contact the insurance provider directly and request a claim be opened to complete required repairs if the damage exceeds the deductible. This can also be done to investigate to verify it is above or below the deductible. Another factor relating to this is the strata must have a bylaw permitting them to charge the deductible back to the owner of the property. We see in brand new buildings the bylaws haven’t been updated to include this charge back bylaw. When the repairs are below the deductible amount the strata will sometimes charge owners for the repairs to your unit. If they had your pemrission this would be an acceptable charge back, if they did not have your permission then it could be considered unenforceable.
The difference between the costs of the deductible amount being charged and general repair costs below the deductible is important as well. The deductible amount is a charge the Strata Property Act permits if not paid, a strata could apply a lien on your property. For charges below deductibles this is not a leinable charge and a strata is required to start legal action, a CRT case is sufficient, against the owner within two years to collect unpaid funds. This applies to charges that you approved.
Both of these situations require independent advice and it is easy to see where if your rental property is not the primary client then you may not be receiving the proper information to make an informed decision about what you should do in these instances. BCFSA, the BC licensing body for property managers states in their training materials that this is a conflict of interest and should be avoided. We still see many landlords choosing this option over independent advice. The comparison we like to make is would you like to end up in court if the person suing you was using the same lawyer? It is not permitted for a law firm to represent both sides in a transaction for the reason they need independent advice.
For the above reasons Cartref Properties only manages rental properties, we do specialize in properties within strata corporations as we have experience in the strata market place.
Need help managing your investment properties. Cartref Properties can assist you, call today to discuss your needs. You can find more information about us at: www.cartrefproperties.com
Rental Management Services and the PST
Rental Management Services and the PST
The BC Provincial government in February presented its budget for the coming year. One of the major concerns for business in the budget is the PST ( Provincial Sales Tax). In the budget the government has removed PST exemptions from many sectors and services in the economy including, accounting, book keeping and commercial real estate services.
Currently rental management services are exempt from charging PST on their services. Effective October 1, 2026 the exemptions including commercial real estate services begin. It appears they are continuing the exemption on residential real estate services including our rental management services.
Another area they are changing is the speculation tax rate for foreign owners up from 3% to 4% for the 2027 year. The speculation tax is owed on properties that are vacant for six or more months in the calendar year. The current rental market has more supply than renters which is leading to longer times to locate new tenants for vacant properties. We anticipate many owners may be subject to the speculation tax in the next few years unless the market changes.
Need help managing your investment properties. Cartref Properties can assist you, call today to discuss your needs. You can find more information about us at: www.cartrefproperties.com
Reference Checks
Reference Checks
As a rental agent I am surprised at one aspect of the industry. Performing a reference check with the previous landlord. When we are performing the screening process of applicants we always contact the current landlord. This is to confirm details of the rental as much as it is to verify if the previous landlord identifies them as a good tenant.
I hear many landlords say it is not worth calling the current landlord as they will always say good things just to ensure the tenant leaves their property. With this attitude it is not surprising that more than half the tenants who leave our properties, their new landlords don’t call us for a reference. Failing to call the landlords is the first step in not performing your due diligence on the new tenants.
A tenant recently moved out of one of our rentals and described the condition of the property when they showed up to move in. Apparently the tenants had not cleaned the unit and then damaged the main bathtub. It meant they were unable to move in on that day. They then told me about the selection process by the landlord saying they were offered the unit on the spot when they were looking at the unit. No calling the landlord, no due diligence performed before offering them the unit to rent. These people are very good tenants but you must still do your due dillegenace before renting.
Calling the current landlord is very important just to confirm that tenants are telling you accurate information about their tenancy. The address, the amount of rent they were paying and when the landlord was last onsite inspecting the unit. For landlords, it is also important to be honest with your references. If they are not good tenants, tell the truth. It helps no one to pass bad tenants on to new landlords.
Need help managing your investment properties. Cartref Properties can assist you, call today to discuss your needs. You can find more information about us at: www.cartrefproperties.com
My unit has great amenities, we will get the higher price.
My unit has great amenities, we will get the higher price.
When we take on a new client we review the different features of the rental property to see what amenities are available. Many buildings in the lower mainland have similar or comparable amenities today. Most have a fitness room, amenity room. Storage locker parking stalls and other features.
How much do the added features increase the rental price?. The reality is not very much. When people are buying a place to live they look at the parking stalls, storage lockers, and building amenities more closely than when renting a property. Why is it different when renting?. Renting in general is a temporary situation. Most tenants don’t live in the place they rent for long periods of time. Our tenant average 28 months staying at a rental property. This is just below three years. When you are moving every three years you are not so concerned about the amenities long term.
Most tenants want the property to be clean, well maintained, in a good location for them. Have the basic items that meet their needs of space, parking storage. The other building amenities are add ons in the process. People who like to work out will look at the units with the better fitness facilities. People with two cars will appreciate the extra parking spots, people with electric cars are looking for the buildings with chargers and people with kids will like the playgrounds and pools.
In most cases and especially in the time we are in now the tenants are searching for the right fit to their lifestyle. The amenities are an after thought and we are not experiencing people choosing to rent a property over another just because the gym is bigger. With the ability now to take their time to look and see what is really out in the market, tenants are reviewing all the factors of the properties before making a decision. Most tenants today are not in a situation where they must move meaning they can wait and they are waiting to see if something better comes to the market.
All this translates into more showings more pre qualifying to ensure you are only showing to people who may have the right fit to the property. If someone does have two cars and your property only has one parking stall and there is no other parking nearby they are unlikely to rent the unit regardless of the price.
Need help managing your investment properties. Cartref Properties can assist you, call today to discuss your needs. You can find more information about us at: www.cartrefproperties.com
Stay in your Lane?
Stay in your Lane?
As a licensed rental property manager I am allowed to provide our client information on the rental market. What we are not allowed to do is provide clients information on selling their property. If you are licensed as a Sales Agent you are able to provide information and advice on the selling of a property, but they are not supposed to provide information on renting a property if they are not licensed as a rental agent.
This begs the question, why do I often run into Sales Agents referring their clients to me about renting their property with preconceived notions of what the rental rates they can achieve are. When a client contacts us about managing the property we review the current market conditions to see what the advertised rates are. The current market is changing monthly. Many times we make suggestions of $3000 is the estimated price the potential client’s property could rent for. On many occasions the prospect will respond, our sales agent suggested we could rent it for $3500.
BCFSA licenses both Sales Agents and Rental Agents and both are trained regularly to not provide advice outside our level of expertise. This is why Cartref Propeties who is not licensed to sell properties never provides market expectations for our clients who elect to sell their properties. We refer them to people who are experts in the selling of properties.
I would like to see more sales agents not provide their clients with unrealistic expectations of what they may be able to rent their property for. This creates distrust in the rental market for potential landlords wanting to rent their property. We have taken on these properties and when we advertise them for the rate suggested by the Sales agent and we are not receiving any inquiries the new landlord begins to understand where the advice was incorrect.
I am asking sales Agents to please stay in their lane and not provide client with in accurate information about renting their property.
Need help managing your investment properties. Cartref Properties can assist you, call today to discuss your needs. You can find more information about us at: www.cartrefproperties.com