FAQ – “I have an investor client looking at buying a strata unit to rent it out. The seller originally bought the unit from the developer and the listing agent is telling me that it is “grandfathered” so my client can always rent it out even if the strata enacts rental restrictions in the future. Is this correct?”
In this video Steve Jamieson, Managing Broker of RE/MAX Crest Realty Westside, discusses the impact of the Strata Property Amendment Act, 2009 to rental restriction bylaws.
Here’s a brief summary:
Strata Property Amendment Act, 2009
On 1st January 2010, Strata Property Amendment Act, 2009 came into force. From that date onwards, every purchaser (not just the first purchaser from the owner developer) may benefit from a new Rental Disclosure Statement.
Rental Disclosure Statement – Know your dates!
Whether you are representing the buyer or the seller, take a good look at the Rental Disclosure Statement (Form “J”) which should be attached to the Form “B”. Ask yourself:
- When was the Rental Disclosure Statement filed?
- When does the rental period expire?
If the Rental Disclosure Statement was filed on or before 31 December 2009 only the original purchaser would be exempt from the rental restrictions subsequently passed by the Strata Corporation until the end of the defined rental period.
If the Rental Disclosure Statement was filed on or after 1 January, 2010 the original purchaser and all subsequent purchasers are protected from any rental restrictions passed by the Strata Corporation until the end of the defined rental period.
Prior to the Strata Property Amendment Act, 2009, the rental period expiry date on the Rental Disclosure Statement was sometimes unclear. Many developers would state a rental period in a descriptive form. e.g. “100 years”.
The revised Form “J” requires a specific expiry date to the rental period, which makes it less open for interpretation.
Note though, these days we have found that some developers make the rental period shorter, thereby limiting the potential for an investment property.
Additionally, the Strata Corporation has the power to define a minimum rental period e.g. 6 months, or 1 year thereby limiting short-term rentals.
Where do I find the Rental Disclosure Statement?
The Rental Disclosure Statement (Form “J”) is normally provided by the strata management company when you order the strata documents. It will be attached to the Form “B”.
For a detailed explanation of the changes that took effect on 1 January, 2010 please refer to the Superintendent of Real Estate’s Information Bulletin.
Please note: The Frequently Asked Question video series is used for training purposes within our group of RE/MAX offices. If you are licensed at a different brokerage, you must refer to your own Managing Broker for advice.