BC Supreme Court finds strata corporation responsible for installing railings needed to bring rooftop balcony up to code

BC Supreme Court finds strata corporation responsible for installing railings needed to bring rooftop balcony up to code

July 5, 2016

BY Kevin Zakreski

In Frank v The Owners Strata Plan LMS 355, 2016 BCSC 1206, the Supreme Court of British Columbia considered whether a strata corporation or a strata-lot owner who has the benefit of a limited-common-property rooftop balcony should be held responsible for bringing the balcony up to the standard required by the BC Building Code. The case contains some interesting observations on (1) designations of limited common property, (2) significant changes in the use or appearance of common property, (3) a strata corporation’s duty to maintain and repair common property, (4) preventing or remedying significantly unfair actions against an owner.

Facts and issues

The case involved a 26-storey strata property located in Vancouver. The seeds of this dispute were sown early in the strata property’s development.

The “original development permit issued by the City to the developer on February 27, 1990 did not contemplate the use of the roof as a roof deck for the three penthouse units.” The project’s original disclosure statement also simply “designated all of the area on the roof as common property.”

The disclosure statement was amended after the development permit was issued, “on December 23, 1991, when specified areas on the roof were designated as limited common property for each of the penthouse units.” The court heard evidence from the building’s architect that “the developer created areas of limited common property after the plans were prepared ‘to allow the owners of the top floor units . . . to install and maintain their own custom HVAC systems.’ ”

The building’s construction was consistent with these documents. Its “exterior parapet walls framing the roof deck were 9 1/2 inches lower than the 42 inch height required under the BC Building Code (which is adopted in the Vancouver Building Bylaw No. 10908).”

But the strata plan told a different story:

Despite this, the Strata Plan, which was filed in the Land Title office on April 9, 1992, designated the limited common property areas on the roof as “roofdeck”. . . .

From the start, it appears that the Strata Corporation was unaware of any restrictions on the use of the roof and the penthouse owners used their limited common property as they wished.

The owner purchased his strata lot in 2004 and “used his roof deck for recreational purposes, as did the other top floor owners.” But in 2005 or 2006, the owner noticed the deficiency in the height of the roof’s exterior walls and notified the strata corporation, which “gave him permission to obtain the necessary permits from the City of Vancouver to install railings that complied with the Building Bylaw.”

In 2009, minutes of a strata-council meeting disclosed that “there may be restrictions on the use of the roof deck.” Nevertheless, the strata corporation continued to “support” the owner’s application with the city.

In 2012, this support was withdrawn when the owner “requested the Strata Corporation to provide written consent for the application as required by the City.” This began a period of negotiation over the structural details of the owner’s plans.

By 2015, the owner appeared to have addressed the structural concerns. But the strata corporation now “took the position that [the owner’s plans] constituted a significant change in the use and appearance of the exterior common property which required approval by a vote of a 3/4 majority of members.” This resolution was defeated and the owner began to pursue an alternative plan that appeared to have the strata corporation’s blessing. Eventually, this alternative raised concerns with the strata corporation and, in their view, also constituted a significant change in the use and appearance of exterior common property.

The owner ultimately commenced this proceeding by way of petition. In the court’s analysis:

The primary issue is whether the proposed installation of railings constitutes a “significant change in the use or appearance of common property” within the meaning of s. 71(a) of the SPA or a necessary repair under s. 72 or alternatively s. 71(b). If it is the former, [the owner] is required to obtain the approval of a special majority of the members of the Strata Corporation and may be required to pay all the costs for the design and installation. If it is the latter, no membership vote is required and it has been conceded that the Strata Corporation is required to pay the costs under its duty to repair.

The petition also asked for “a declaration that the Strata Corporation’s actions are significantly unfair to him within the meaning of s. 164 of the SPA.”

The court examined its primary issue by discussing, in turn, the following facets of it:

• Common property and limited common property;
• Significant change in the use or appearance of common property;
• The duty to repair;
• Significantly unfair.

Common property and limited common property

The court emphasized the significance that the roof was designated as limited common property in the strata plan:

This case involves not just common property, but limited common property, important, in my view, to the analysis required here. . . . Such a designation confers on the owner a substantial degree of control and something approaching a beneficial or equitable interest. . . . This is particularly so where the designation was made in the original strata plan, as under s. 75(1) of the SPA, such a designation can only be removed by a unanimous vote of the members of the strata corporation under s. 257 (subject only to a limited relaxation of unanimity in s. 52). This is clearly a higher threshold than the 3/4 vote required for significant changes to common property, as it gives the owner of limited common property an effective veto over any change to it.

These considerations led the court to reject the strata corporation’s argument that “in the circumstances here, the original intention of the developer, which is implicit in the development permit, should inform the use of the limited common property, not the strata plan.” In the court’s view, “[t]he strata plan is the only document that affords reliable information on its face about the strata lots and their adjoining common property and limited common property.”

Significant change in the use or appearance of common property

The court examined two precedents—Chan v The Owners, Strata Plan VR677, (2 February 2012) Vancouver Registry No. S115516, and Foley v The Owners, Strata Plan VR 387, 2014 BCSC 1333—which “developed a non-exhaustive list of objective and subjective factors to be considered”:

• A change would be more significant based on its visibility or non-visibility to residents and its visibility or non-visibility towards the general public;
• Whether the change to the common property affects the use or enjoyment of a unit or a number of units or an existing benefit of a unit or units;
• Is there a direct interference or disruption as a result of the changed use?
• Does the change impact on the marketability or value of the unit?
• The number of units in the building may be significant along with the general use, such as whether it is commercial, residential or mixed use.
• Consideration should be given as to how the strata corporation has governed itself in the past and what it has allowed. For example, has it permitted similar changes in the past? Has it operated on a consensus basis or has it followed the rules regarding meetings, minutes and notices as provided in the Strata Property Act[?]

In applying these factors, the court was of the view that “all relevant factors must be assessed in the context of the more particular interest conferred by a designation of limited common property.”

The fact that the owner was proposing “corrective measures” to “bring his roof deck into compliance, not only with the BC Building Code but also with the Strata Plan” and to restore “the value of the recreational use he formerly enjoyed for many years and reasonably understood was permitted” was determinative to the court. It concluded:

In all of these circumstances, it is my view that the installation of railings does not constitute a significant change in the use of [the owner’s] limited common property. Nor does it constitute a significant change in the appearance of the limited common property, as the railings will be consistent with all other balcony railings on the building and in any event, they will visible only to the penthouse owners who access their own roof areas.

The duty to repair

The court began its analysis here by noting “a strata corporation’s duty to repair has been interpreted broadly.” It rejected the strata corporation’s argument that the installation of railings was less a necessary repair and more a change designed to benefit the owner.

Significantly unfair

The court observed that its power under section 164 “is remedial and similar to the oppression remedy in company law. Its intent is to allow the court to interfere where the conduct of the strata corporation through its majority decision-making process becomes oppressive or significantly unfair to a minority.” Drawing on leading strata-property and corporate-law cases, the court adopted this test:

1. Examined objectively, does the evidence support the asserted reasonable expectations of the petitioner?
2. Does the evidence establish that the reasonable expectation of the petitioner was violated by action that was significantly unfair?

On the first limb of the test, the court concluded that the owner “had a reasonable expectation that he had the right to use and enjoy his limited common property as a roof deck”:

I do not agree with the Strata Corporation’s submission that [the owner’s] expectations must be assessed in the context of the “actual legal realities” of the roof area and the original intentions of the City, the architect and the developer. Those realities were not evident to [the owner], or to other top floor owners, or even to the Strata Corporation for many years, nor were the intentions ever clearly identified. Even now, the original intentions have only been discerned by inference from the documents. Whether or not one characterizes this situation as an error, it is my view that [the owner’s] expectations must be assessed on the basis of the concrete information available to him and the conduct of the Strata Corporation in relation to his use of his roof deck over the years in question. Per BCE, these “business realities,” rather that the “narrow legalities,” should be the proper focus.

On the second limb, the court found the strata corporation’s delays and multiple meetings to consider doomed 3/4-vote resolutions to be “obstructive to [the owner] in his pursuit of an application to the City to bring the roof deck into compliance with safety requirements and the Strata Plan, and was a violation of his reasonable expectation that he had the right to use and enjoy his limited common property as a roof deck.”

Result

In the result, the court made the following orders:

There will be a declaration that:

• the Strata Corporation’s actions as described herein are significantly unfair to [the owner]; and
• the addition of railings and related safety measures on the roof deck fall within the Strata Corporation’s duty to repair and do not require the approval of 3/4 of the members of the Strata Corporation under s. 71(a) of the SPA.

There will be an order that the Strata Corporation perform its duty to repair in relation to the work which has been authorized by the development/ building permit issued by the City of Vancouver on March 9, 2016.

I also expect the Strata Corporation to provide [the owner] access to the roof area so that he can facilitate the implementation of the installations.

The issues of damages and special costs as sought in paragraphs 10–12 of the petition may be spoken to.