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CONDOMINIUMS - Description - Essential elements - Description of units and common elements - Habitable area

Friday, December 22, 2017 @ 8:29 AM  


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Appeal by the strata corporation from a trial judgment holding that the actual habitable area of the strata lots in question had not been accurately reflected in the schedule of unit entitlement and amending a resolution approving a special levy for roof repairs. The habitable area, which governed an owner’s proportionate share of the common expenses and liabilities of a strata corporation, excluded unfinished basements, lofts and other spaces in the strata lot. Over time, many, but not all, of the unfinished basements and lofts were finished. However, the original schedule of unit entitlement was not amended to reflect corresponding changes in habitable areas of units, which led to some owners of strata lots without basements and lofts feeling that they were bearing a disproportionately high share of common expenses and liabilities relative to those with basements and lofts. After the strata owners passed a resolution approving a special roof replacement levy and allocating the cost in accordance with the existing schedule, the respondent owners of strata lots without basements and lofts sought an order amending the schedule and varying the resolution. The chambers judge held that the finished and unfinished basements and lofts were habitable areas which should have been included in the schedule of unit entitlement. She determined that the failure to include the unfinished basements resulted in an inaccuracy to which s. 14.13(a) of the Strata Property Regulation (Regulation), which prohibited applications to amend inaccuracies in the habitable area contained in an original schedule of unit entitlement, applied. The chambers judge held that the finishing of basements and lofts after the schedule was filed created a separate inaccuracy to which s. 14.13 did not apply. She then amended the schedule. She varied the special roof levy resolution pursuant to s. 164 of the Strata Property Act (Act) because the appellant’s decision to pass the resolution based on the existing schedule was significantly unfair.

HELD: Appeal allowed. A “habitable area” meant that area within a residential strata lot which can, could or was capable of being lived in free of serious defects that might harm health and safety. The judge erred in her interpretation of the Act and the Regulation. Given that the judge correctly found that the use, finishing and development of an area within a strata lot did not determine its habitability, it was unclear why she also found that different levels of finishing created separate inaccuracies in the habitable area reflected in the schedule. Section 14.13(a) of the Regulation applied in respect of both finished and unfinished basement and loft areas. For the purposes of s. 14.13(a) of the Regulation and s. 246(7) of the Act, the inaccuracy of significance could only relate to the actual habitable area of the strata lots. The relevant inaccuracy could only be the exclusion of basements and lofts from the calculation of habitable area, whether finished or not. There was thus only one possible inaccuracy for consideration, the exclusion of basement and loft areas, and that inaccuracy was contained in the schedule when it was deposited with the strata plan. In these circumstances, s. 14.13(a) applied. Physical changes or improvements to an area within a strata lot that could be lived in did not affect its habitability because habitable area was determined without regard to its use, finishing or development. The judge also erred in finding the appellant’s decision to pass the special levy resolution was significantly unfair within the meaning of s. 164 of the Act, as s. 14.13(a) of the Regulation applied in respect of both finished and unfinished basement and loft areas.

Barrett v. Strata Plan LMS3265, [2017] B.C.J. No. 2393, British Columbia Court of Appeal, M.V. Newbury, P.D. Lowry and G. Dickson JJ.A., November 29, 2017. Digest No. TLD-December182017009