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