acobucci v. Strata Plan BCS 1299
A recent decision of the BC Supreme Court has important implications for condominium buyers and owners whose parking facilities are governed by a long-term lease.
The owners purchased their strata lot and a second parking spot from the developer. Their two parking stalls were a significant distance from each other so, in 2007, the owners exchanged one of their stalls for a “disabled parking stall” that belonged to the strata corporation. Council unanimously approved the exchange which was described in the council minutes as a “permanent swap”.
The owners had use of the disabled parking stall for over three years even though they themselves were not disabled. In 2011, a new strata council demanded the return of the disabled parking stall, arguing that the 2007 exchange was unenforceable because it contravened section 76 of the Strata Property Act, dealing with “Short-Term Exclusive Use”. This section would enable the strata corporation to cancel permission to use the parking stall.
The owners argued that s. 76 was not applicable because the parking facilities were subject to a long-term lease agreement, which is commonly used by developers to allocate parking stalls. The developer granted the lease to a numbered company, which then sub-leased or “assigned” parking spaces to individual owners and the strata corporation. The owners argued that the strata corporation, as an assignee, had the legal authority to assign one of its parking stalls to them.
The Court held that the lease and sublease were valid and that the issues surrounding parking were governed by and subject to the assignment agreements, even though parking stall was designated as common property and a disabled parking space. The Court held that the council was acting within its authority to permanently exchange parking stalls with the owners.
The Court also held that the 2011 strata council, in revoking the previous council’s decision to permanently trade stalls, was acting in a manner that was significantly unfair to the owners, pursuant to s. 164 of the Act.
This case contains lessons for both strata corporations and potential owners. An owner who exchanges or buys additional parking spaces from anyone other than the owner developer should obtain legal advice before doing so. If the parking stalls are governed by a long-term lease, the exchange agreement should comply with the requirements of the lease and be properly documented. If the facts of this case been different, the agreement to exchange parking stalls may not have been enforceable.
Strata councils should also be wary of tearing up agreements or reversing decisions by previous councils. The Court will not endorse such reversals if the consequences of the decision would be significantly unfair to an owner. Strata Corporations must also assert their rights in a timely manner if they wish to enforce bylaws, rules or the Act.
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