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CONDOMINIUMS - Developers - Obligations of - Disclosure statement

Monday, June 19, 2017 @ 11:45 AM  

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Appeal by the petitioners from a decision dismissing their application for declarations that certain lots in a phased strata development were not residential lots within the meaning of s. 128(1) of the Strata Property Act (Act). The lots at issue were part of a resort. The appellant East Barriere Resort (EBR) had obtained Phase 4 lands in 2005 in foreclosure proceedings before Phase 4 was completed. Phases 1, 2 and 4 had been zoned “Recreational Commercial Zone”. Principal uses in that zone included a resort that excluded single family residential dwellings. Phase 3 was zoned as “Country Residential Zone”, which permitted, among other uses, one single family dwelling. Certain declarations were made on the plans filed for Phases 1, 2 and 3 in the Land Title Office, but no declaration was found on the plan covering Phase 4. The record suggested that the resort was comprised of both residential and nonresidential strata lots. Owners had constructed detached single-family homes used as vacation residences since 1996. Since 1996, the strata corporation had considered the strata plan to be composed entirely of residential strata lots and owners had voted collectively on bylaws. EBR took issue with a number of amendments to the bylaws enacted by the strata corporation over the years which prompted the filing of the petition. The appellants argued that since the advent of Phase 3 in 2001, the resort had consisted of both residential and nonresidential strata lots so that voting on bylaws and bylaw amendments should be conducted accordingly. The chambers judge held that all of the strata lots were residential based on the actual use of the lots over an extended period of time.

HELD: Appeal allowed. The appropriate approach to determine whether the strata lots were residential was to assess the design and intention at and around the time of the inception of the development. Otherwise, there would be uncertainty concerning the proper voting procedures, filing requirements, and the applicability of numerous other provisions in the Act that relied on the definition of “residential strata lot”. The Disclosure Statements and the Re-Stated Disclosure Statements made it clear that the design and intention was for Phases 1, 2, 3 and 4 to be comprised of both residential and nonresidential strata lots. The zoning regulations reflected this as well. This development had, since the advent of Phase 3, been comprised of both residential and nonresidential strata lots. The fact that the owners from time to time mistakenly proceeded on a different basis did not alter their legal position.

East Barriere Resort Ltd. v. Strata Plan KAS1819, [2017] B.C.J. No. 912, British Columbia Court of Appeal, R.J. Bauman C.J.B.C., D.F. Tysoe and J.E.D. Savage JJ.A., May 16, 2017. Digest No. TLD-June192017003