How to Apply for a Rental Restriction Hardship Exemption

 

Rental restrictions are a hot topic and a great source of conflict between owners and strata corporations. Every week I receive calls and emails from owners who have been denied exemptions or who are locked in a bitter dispute with their strata corporation. To help shed light on this subject and prevent future hardship, I have prepared the following guide for you, my dear reader.

Understanding Rental Restriction Hardship Exemption Scheme

Section 144 of the Strata Property Act, SBC 1998, c.43 sets out the rights and obligations of owners when applying for a rental restriction hardship exemption.

Applications for hardship exemptions:

  • must be in writing;
  • must set out the reason(s) the owner believes the exemption should be granted;
  • must state if the owner requests a hearing on the matter;
  • if a hearing is requested, the strata corporation must hear the application of the owner or the owner’s agent within 4 weeks and provide a written decision to the owner within 1 week of the hearing; and
  • if no hearing is requested, the strata corporation must provide a written decision to the owner within 2 weeks.

A rental restriction hardship exemption will be granted automatically if the strata corporation:

  • fails to hold a hearing within 4 weeks (if requested);
  • fails to deliver a written decision to the owner within 1 week of a hearing; or
  • fails to deliver a written decision to the owner within 2 weeks if no hearing is requested.

A strata corporation may not unreasonably deny an application, but it may grant an exemption for a limited period of time.

What to Include in your Hardship Exemption Application

While strata corporations cannot unreasonably refuse to grant a hardship exemption, you have a duty to provide sufficient evidence to show personal hardship. You must include in your application all of the information that the strata corporation will need to establish that you will suffer hardship if you are not allowed to rent.

It isn’t enough to show that selling your property will result in a loss or that you cannot reside in the property due to a change in employment or family circumstance. What is hardship to one person may not be hardship to another. For example, carrying two mortgages can be devastating to a person of modest means and an inconvenience to a person of wealth. You must show why the rental restriction will cause hardship to you.

The leading case on hardship exemptions is Als v. Strata Corporation NW 1067, 2002 BCSC 134. In this case, the owner petitioned the court for a rental restriction exemption after being denied by his strata corporation multiple times. The owner’s employer had required him to work overseas, resulting in a duplication of living expenses. He did not want to sell the strata lot as it had declined in value by $50,000 and the mortgage was greater than the assessed value.

When the strata corporation requested copies of his financial records and evidence showing that selling the strata lot or not being able to rent caused him personal hardship, the owner refused. He believed that providing such information was invasive. The court disagreed.

Without the ability to review the question of whether there is actual financial hardship present and without the information available about other grounds of hardship alleged, the Strata Council was correct in concluding that Mr. Als had not shown that the bylaw limiting rentals caused him hardship.

The court relied on the definition of “hardship” in the Oxford English Dictionary, being “hardness of fate or circumstance; severe toil or suffering; extreme privation.” Since the owner did not provide evidence that the circumstances caused hardship to him personally, the court upheld the strata corporation’s decision to deny the exemption.

Put simply, if you are applying for a hardship exemption, you must show how the inability to rent your strata lot causes you specific hardship. Personal information that you may be required to provide includes:

  • tax returns
  • bank statements
  • mortgage documentation
  • proof of employment income

Although every case is different, I generally advise my clients to provide a compelling personal statement about why the rental restriction bylaw causes them hardship, a simple budget, copies of recent bank or mortgage statements and information on current market conditions (if selling in a good market would be a reasonable option).

A strata corporation may deny an application for failure to provide sufficient information, but once sufficient information is provided, an application cannot be unreasonably denied. The goal is to make it easy for the strata council to say “yes” to the application.

Privacy Concerns

Many owners are concerned that by providing detailed personal information to their strata corporation, this information will become public. Although there is always a risk that a strata council member or other agent or employee of the strata corporation may disclose confidential information, personal information provided in support of hardship exemptions must remain confidential. This is supported by case law and the Personal Information Protection Act, SBC 2003, c.63 (see for example the Privacy Guidelines for Strata Corporations and Strata Agents published by the Office of the Information & Privacy Commissioner).

Automatic Exemptions

When delivering a rental restriction hardship exemption application to the strata corporation, timing and strategy are key. Once your application has been delivered to your strata corporation, the clock starts ticking. If you request a hearing in front of the strata council, that hearing must take place within four weeks and a decision must be provided to you within one week of the hearing. If no hearing is requested, the strata corporation must provide you with a written decision within two weeks.

What happens if the strata corporation fails to meet these deadlines?

The hardship exemption is automatically granted.

In order for you to take advantage of the the strict time limits and automatic exemptions under section 144 of the Strata Property Act, it is critical to create accurate records about how and when your hardship exemption application is delivered to the strata corporation.

How to “Deliver” Your Application

Section 63 of the Strata Property Act sets out how a “notice or other record or document” may be given by an owner to their strata corporation. An application may be delivered by:

  • leaving it with a council member,
  • mailing it to the strata corporation at its most recent mailing address on file in the land title office,
  • by faxing it or emailing it to
    • the strata corporation using the strata corporation’s fax number or email address, or
    • a fax number or email address provided by a council member for the purpose of receiving the notice, record or document, or
  • by putting it through the mail slot, or in the mail box, used by the strata corporation for receiving notices, records and documents.

An application will be considered delivered if given to a strata council member in person, and “conclusively deemed to be given 4 days after it is mailed, faxed, emailed or put through the mail slot or in the mail box.”

Since the clock doesn’t start ticking on the strata corporation’s obligations until your application has been delivered in accordance with the Strata Property Act, you need to factor in when the application is legally considered to be delivered. Savvy owners will be strategic in their choice of when, and how, they choose to deliver their exemption application.

How to Calculate Time

Section 25 of the Interpretation Act, RSBC 1996, c.238 sets out how time is calculated. This applies to deadlines in the Strata Property Act.

When calculating delivery and response times, you must exclude the first day and include the last day. Also note that if the last day falls on a holiday, it must be extended to the following day that is not a holiday.

Conclusion

If your rental restriction hardship exemption is denied, the penalties can be severe. You should consult with a lawyer and take immediate steps to resolve the matter. A lawyer can help you review the enforceability of the rental restriction bylaw, assess the strength of your claim or defence and represent you in the matter. Fines can add up quickly. Strata corporations may fine an owner up to $500 every seven days for the breach of a rental restriction bylaw. The exact amount will be set out in your own bylaws.

Always remember that StrataLaw.ca provides general reference information. You should always obtain independent legal advice from a lawyer that can review your strata bylaws and other important information that will impact your legal rights.