BC Court Questions Bulk Cable Contracts for Stratas

The Owners, Strata Plan LMS 2223 v. Tsubota et al, unreported

This is an unreported decision from last spring that questions the ability of strata corporations to enter into bulk contracts for the provision of utilities such as a cable or internet services to strata lots. The strata filed a petition against the registered owners of a residential strata lot seeking a declaration that the owners defaulted on their share of the common expenses in the amount of $3,500. The common expenses related to television and internet cable services.

In 2000, the strata entered into a contract with a cable service provider on behalf of all owners. The strata paid for bulk television and internet cable services which, in turn, were provided to all of the individual strata lots in the building and charged out as a common expense. Each strata owner was charged for cable services whether the services were used or not.

In 2008, the strata negotiated a new contract with a different provider for cable services. Subsequently, the owners voted to ratify the new contract by a ¾ vote at a special general meeting.

After only 8 months, the owners in question refused to pay for their share of the cable expenses, which eventually resulted in the strata’s petition.

The issue for the judge was whether the strata had the jurisdiction to enter into a contract for cable services on behalf of the individual strata lots.

The strata argued that section 38 of the Strata Property Act gave it the authority to enter into the contract. The strata argued that, without the power given to it under section 38, it would be overly difficult for it to enter into any maintenance or utility contracts without the approval of all owners.

The owners argued that neither the Strata Property Act nor the strata’s bylaws gave the strata authority to contract for non-essential services and that the owners should not be forced to accept and pay for cable services they did not want.

After a review of the definition of common property in the Strata Property Act, the court concluded that the cable within the individual strata lots could only be considered common property if it was capable of being and intended to be used in connection with the enjoyment of another strata lot or the common property (see section (1) “Common Property” subsection (b) (ii) of the Strata Property Act). The court concluded that cable within the individual strata lots was not included within the definition of common property.

As such, the court confirmed that section 38 of the Strata Property Act did not provide the strata with the authority to enter into a contract to provide cable services for each strata lot without the consent of each owner and dismissed the petition with costs.

The case highlights two points. Firstly, it may be prudent seek legal advice before entering into long-term contracts for non-essential services on behalf of all owners. Secondly, it is noteworthy that the court could not find any provisions in the bylaws that would provide the strata with the jurisdiction to enter into contracts for cable services on behalf of all owners.

This suggests that bylaws may give a strata corporation the appropriate authority to act on behalf of all owners, even in situations where the Strata Property Act does not. This emphasizes the need for careful drafting of strata bylaws and periodic review and amendments as required to ensure that a strata council has the proper authority to act on behalf of all owners in certain circumstances.

This is not a published decision, so please contact Paul Mendes for a copy of this case.

What we do: Lesperance Mendes advises strata corporations and owners on matters such as construction defects, warranty claims, bylaw enforcement and collections. We have also successfully represented our clients before the Human Rights Tribunal. For more information about our strata law practice, contact Paul G. Mendes at 604-685-4894 or by email at pgm@lmlaw.ca.

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