New Limitation Act Will Have Repercussions for Strata Corporations

New Limitation Act will have repercussions for strata corporations

Bill 34, the new Limitation Act, will be in force on June 1, 2013. The new Act fundamentally changes limitation periods in BC.

Subject to limited exceptions, the new Act creates a basic limitation period of 2 years. The basic limitation period starts running the day after a claim is discovered. Generally speaking, a claim is discovered on the first day on which the plaintiff knew or reasonably ought to have known all of the following:

1. that injury, loss or damage had occurred;

2. that the injury, loss or damage was caused by or contributed to by an act or omission;

3. that the act or omission was that of the person against whom the claim is or may be made; and

4. that, having regard to the nature of the injury, loss or damage, a court proceeding would be an appropriate means to seek to remedy the injury, loss or damage.

As noted above, there are exceptions and special discovery rules that exempt certain claims from the basic limitation period and may extend or override the limitation period.

The new Act will also reduce the “ultimate limitation period” for commencing a court proceeding from the current 30 years to 15 years after the day on which the act or omission giving rise to the claim took place. The combined effect of the basic limitation period and ultimate limitation period is that a person may not file a lawsuit after the earlier of the date that is:

· 2 years after the claim is discovered; and

· 15 years after the date on which the event giving rise to the claim occurred.

The new Limitation Act will have important repercussions for strata corporations, strata corporation sections, and strata lot owners. For example, building defect claims that were formerly governed by a 6 year limitation period will now be governed by the 2 years basic limitation period. Claims for the overpayment of common expenses by sections and strata lot owners, which were formerly governed by a 6 year limitation period, will now be governed by the shorter 2 years basic limitation period.

Perhaps most importantly, the new 2 years basic limitation period will also apply to strata lot collections including bylaw enforcement and forced sale proceedings. An action to enforce bylaws will have to be commenced within 2 years from the date the bylaw infraction occurred, subject to the “discovery rules” outlined above. This will severely limit the ability of strata to deal with unauthorized alterations that were made more than 2 years ago. Similarly, forced sale proceedings to enforce strata lot liens will have to be commenced within 2 years of the date on which the lien is filed and it is arguable that the 2 year limitation period will also apply to the amount of unpaid strata fees that can be claimed on a lien. This will be of special concern to strata corporations with liens and arrears on strata lots for more than 2 years.

Strata corporations that have been considering legal action to enforce their bylaws and strata lot liens should obtain legal advice on those claims before the new Limitation Act comes into effect on June 1, 2013.

WHAT WE DO: Lesperance Mendes advises strata corporations, strata corporation sections, owners and property managers on a wide range of strata governance and litigation matters. To find out more about our strata law practice, please contact Paul G. Mendes at pgm@lmlaw.ca or by phone at 604-685-4894. Don’t forget to visit our website for more information about our firm and our team of lawyers: WWW.LMLAW.CA.

Lesperance Mendes Lawyers
900 Howe St #550, Vancouver, BC V6Z 2M4
(604) 685-3567