Lawson Lundell's Real Estate Law Blog

Vancouver Introduces Empty Homes Tax

Posted in Condominium (strata) law, Development, Property Law, Strata managers, Strata wind up
Comment

NOTE: The below article is a shortened version summarizing material information regarding the Empty Homes Tax. Click here for the full version including additional commentary and examples.

1.                  Vancouver’s new Empty Homes Tax became effective January 1, 2017.

Targeting the approximately 10,000 year-round empty and 10,000 under-occupied homes in Vancouver, homes which are unoccupied for six full months of the year or more will be subject to the new 1%  Empty Homes Tax (the “EHT”) imposed by Vancouver’s new Vacancy Tax By-law No. 11674 (the “By-law”).  Homes that are determined or deemed to be vacant will be subject to an EHT equal to 1% of the property’s taxable assessed value in addition to the existing property tax. The EHT will be applied annually, with the first taxation year beginning January 1, 2017. The tax for 2017 would be payable by April 2018.

2.                  Who won’t be subject to the tax?

Most Vancouver homes will not be subject to the EHT.  Residences being used as a principal residence by the owner, a family member or a friend for at least six months of the tax year will not be charged the EHT, nor will properties that are rented long-term (with a written tenancy agreement), for at least 30 days in a row for a minimum of six months in aggregate over the course of a year.

3.                  What is a vacant home?

A home is not a vacant home and thus not subject to the EHT when it is being used as a principal residence by the owner or the owner’s family or a friend for at least six months of the year. The By-law has its own definition of what is a principal residence, which is not necessarily the same as other laws. The By-law provides that a principal residence is defined as:

The usual place where an individual lives, makes his or her home and conducts his or her daily affairs, including without limitation, paying bills and receiving mail, and is generally the residential address used on documentation related to billing, identification, taxation and insurance purposes, including without limitation, income tax returns, Medical Services Plan documentation, driver’s licenses, personal identification, vehicle registration and utility bills.”

A residential property is considered to be unoccupied in the following circumstances:

(a)  the residential property is not the principal residence of an occupier; or

(b)  the residential property is not occupied by a tenant or subtenant for a term of at least 30 consecutive days.

A residential property is considered to be a vacant property if:

(a)  it has been unoccupied for more than 180 days during a calendar year period; or

(b)  it is deemed to be vacant property in accordance with the By-law.

4.                  Pied-de-terres and snowbirds.

Many people maintain second homes in Vancouver some distance away from their primary residence.  It may be a vacation home used for a few weeks a year, or purchased as a future retirement home. If the Vancouver home is their principal residence, it is not subject to the EHT. If their other home is their principal residence and the owner does not rent out their Vancouver home for at least six months of the year (or another exemption applies), their Vancouver home will be subject to the EHT.

5.                  Vacant residential land will also be subject to the EHT.

Any property, including vacant property, is potentially subject to the EHT if the property is classified as Class 1, Residential by BC Assessment.  The City has decided to impose the EHT on vacant property to avoid owners “prematurely” demolishing homes and not promptly rebuilding a home on the property so as to avoid the EHT.  This may catch a homeowner whose home consist of two 2 adjacent lots, with all of the improvements located on 1 of the 2 lots.

6.                  Apartment buildings.

If a building is not stratified and is one legal parcel and one unit is occupied, the whole building is exempt.

7.                  Annual declaration.

In December of each year, all owners of residential properties in Vancouver will receive instructions to complete a Property Status Declaration (a “PSD”) from the City that must be completed and returned to the City on or before the 2nd business day of the following February. If the owner fails to submit the PSD, the property will be deemed to be vacant and subject to the EHT. The City may also pursue fines.

8.                  Tax notice.

The City will review the completed PSD and determine whether or not the property is subject to the EHT. Where a residential property is determined or deemed to be vacant, it will be subject to the EHT. The City will mail an EHT notice to each registered owner of a property that is subject to EHT by the end of the 2nd week of March each year. An owner who disputes the EHT notice may submit a complaint to the Vacancy Tax Review Officer regarding the City’s decision to impose the EHT on the basis that an error or omission was made by the City, or by the owner in completing the PSD. The decision of the Vacancy Tax Review Officer can be further appealed to the Vacancy Tax Review Panel.

9.                  Deemed to be vacant.

A parcel of residential property is deemed to be vacant property and is subject to the EHT where the owner:

a)  fails to file a PSD as required by the By-law;

b)  makes a false PSD;

c)  fails to provide the information or to submit required evidence to the Collector of Taxes in accordance with the By-law; or

d)  provides false information or submits false evidence to the Collector of Taxes.

10.              EHT due date and penalty.

The EHT is due and payable by the owner on or before the 10th business day of April of the year that the EHT Notice is issued. So the EHT for a property that was vacant in 2017 will be due in April of 2018.  The EHT which is unpaid as of the 10th business day of April incurs a penalty of 5% and interest in the same amount as unpaid property taxes. The EHT together with any penalties will be added to the property tax roll.

11.              EHT exemptions.

The By-law provides for 8 exemptions:

(a)                Major renovations.

If the home is vacant because the property is undergoing major renovations, or is under construction or redevelopment (with permits), the EHT is not payable. The EHT is not payable if the residential property:

  •  was unoccupied for more than 180 days during the year in order to redevelop the property or safely carry out major renovations; and
  •  was undergoing redevelopment or major renovations,
    •  for which permits have been issued by the City, and
    •  which, in the opinion of the City’s Building Official, are being carried out diligently and without unnecessary delay.

Any period when the home is empty but the permit has not yet been issued will not be considered for the exemption. The fact that an owner has applied for a permit and the City has not yet processed it or issued it, currently does not qualify for the exemption for the period prior to the permit being issued. The period while the home is empty, or the land remains unimproved, and does not have a valid permit, will be counted towards the 180 day vacancy period and it will be considered a vacant home and subject to the EHT if the 180 day period is exceeded.

(b)               Illness.

The EHT is not payable if the residential property was unoccupied for more than 180 days during the year because the occupier, tenant or subtenant is undergoing medical care or is residing in a hospital, long term or supportive care.  This exemption will not be allowed for more than two consecutive years.

(c)                The owner is deceased.

The EHT is not payable if the residential property is unoccupied for more than 180 days during the year because the registered owner is deceased and neither a grant of probate of the will of the deceased, nor a grant of administration of the estate of the deceased has been issued.

(d)               Ownership of the property changed during the previous year.

The EHT is not payable if the title of the property was transferred during the previous year. See Ed’s complete article here for examples showing the mechanics of this exemption and additional commentary.

(e)                Strata Rental Restrictions.

The EHT is not payable if the residential property was unoccupied for more than 180 days during the year because:

a) the residential property is a strata unit;

b) prior to the Vacancy Tax By-law being adopted (November 16, 2016), the Strata Corporation’s bylaws restricted the number of strata units that could be rented; and

c) rental of the residential property is not permitted because the maximum allowable number of permitted strata rentals for the strata development has already been reached.

(f)                Homes used for work purposes.

The EHT is not payable if the residential property is not the principal residence of a registered owner during the year, but it was occupied by a registered owner for a minimum of 180 days during the year because the registered owner works in the City of Vancouver. (Note: The By-law provides the workplace must be located in the City of Vancouver, not Metro Vancouver.) This exemption will be applicable in situations such as where the owner declares their home outside of Vancouver as their principal residence, but work in Vancouver and live in their home during certain work weeks.

(g)               Court order.

The EHT is not payable if the residential property was unoccupied for more than 180 days during the year solely because a court order prohibits its occupancy.

(h)               Restricted property.

The EHT is not payable if the residential property was unoccupied for more than 180 days during the year because the lawful use of the property is limited to vehicle parking, or as a result of the size, shape or other inherent limitation of the parcel, a residential building cannot be constructed on the property.

12.              EHT applied. What now?

If a property is subject to the EHT and the owner wishes to avoid the tax, the owner may:

  • Become a landlord by renting the property for a minimum of six months of the year, in periods of at least 30 consecutive days (ie. a month to month or fixed tenancy agreement);
  • Enlist a property management firm to rent the property for the required duration, or consider a lease with a company (e.g. a business who has employees who work periodically on Vancouver, or a film company) who can sublease or license to individuals who will occupy the home for at least 6 months of the year for periods over 30 days;
  • Invite a family member or friend to occupy the property as their principal residence for at least 6 months of the year.  If the owner has a family member or friend occupy the unit, they do not have to pay rent but a rental agreement should be entered into confirming the terms of the tenancy and the occupier must occupy the property as their principal residence for at last 6 months of the year;
  • Keep the property as-is and pay the EHT; or
  • Sell the property.

13.              Impact on Realtors.

Realtors acting for buyers and sellers will want to make inquiries of the seller as to the vacancy status of the property during the current and previous year. REALTORS acting for buyers will also want to consider inserting into the Contract of Purchase and Sale terms providing:

  • that the seller must provide the buyer with a copy of the completed and filed PSD;
  • that the seller will provide a statutory declaration at closing confirming the filed PSD is true and correct;
  • an express representation and warranty confirming that property has not been vacant (as defined by the By-law) for more than 180 days during the current or prior year;
  • providing that where the City has not yet determined if a property is subject if the EHT is applicable or not, provide for a holdback of the potential tax pending the City’s determination;
  • where the property is clearly subject to the EHT, provide that an adjustment to be carried out by the Buyer’s conveyancer and the EHT will be borne solely by the seller; and
  • Realtors who are licensed as strata managers must be aware of the way rental restriction bylaws impact the strata lots and EHT. This may over time result in changes to rental restriction bylaws and result in more administrative work on their part.

Negotiating a Tenant’s Restoration Obligations: A Reminder on Reasonable Wear and Tear Exceptions in B.C.

Posted in Commercial leasing
Comment

One of the many issues commonly negotiated between landlords and tenants is the condition of the state of repair that the premises must be in at the expiry of the lease. Typically, a standard form lease will require that the tenant return the premises to the landlord in the same condition as that which it is required to maintain during the term of the lease, and to remove certain tenant improvements. While these restoration clauses can be more or less complex or onerous depending on the nature of the property (i.e. industrial, retail or office), one common thread is that tenants will try to negotiate that their restoration obligations be subject to a “reasonable wear and tear” exception.

This language is regularly agreed to by the parties based on a mutual understanding that the tenant should not be required to deliver the premises in perfect condition at the end of the term or to eliminate all signs of aging to the premises. But this begs the question: how broadly will a court interpret a reasonable wear and tear exception in the event of a dispute?

The decision of the British Columbia Supreme Court (BCSC) in Griffin Holding Corporation v. Raydon Rentals Ltd., 2016 BCSC 2013 serves as a reminder of the legal interpretation given to the words “reasonable wear and tear” when considering a tenant’s restoration obligations in a commercial lease.

The Legal Test for “Reasonable Wear and Tear”

The common law defines reasonable wear and tear as “the reasonable use of the premises by the tenant and the ordinary operation of natural forces”. In Griffin, the BCSC confirmed that the following legal test applied when considering reasonable wear and tear in the context of a tenant covenant to restore leased premises:

(a) the landlord must prove that the premises were not in as good repair and condition at the end of the lease compared to the repair and condition at its commencement, and once proven, the burden shifts to the tenant to prove that the deterioration in condition falls within any “reasonable wear and tear” exception in the lease;

(b) what will amount to reasonable wear and tear is to be considered in light of the purpose for which the premises were leased, the nature of the business carried out thereon, the age of the building, and the length of the lease; and

(c) if a court accepts that the premises have been damaged beyond reasonable wear and tear, the landlord is entitled to the cost to restore the premises to the same state of repair as they were in at the commencement of the lease, regardless of whether the landlord ever intends to incur the cost of those repairs.

In Griffin, the salient facts were as follows:

in 2006 (prior to the lease being entered into), Griffin retained a commercial concrete polishing company to restore and resurface the concrete slab of the leased premises;

  • Griffin Holding Corporation (“Griffin”) leased commercial premises in North Vancouver to Raydon Rentals Ltd. (“Raydon”) for a term commencing in October, 2008 for the purposes of selling, renting and servicing new or used equipment for industrial, residential or farming operations;
  • the lease contained various clauses relating to Raydon’s maintenance and repair obligations, including a covenant from Raydon to restore the premises to the same condition as existed at the commencement of the lease, except for reasonable wear and tear;
  • in 2015, the lease was terminated in accordance with its terms, and at the end of the tenancy, Griffin found that the floors were damaged with paint, oil and rust stains and were embedded with holes and bolts; and
  • Raydon took certain measures to remedy the condition of the floor, but eventually took the position that the condition of the floor reflected “reasonable wear and tear” (which Griffin disagreed with).

The BCSC ruled in Griffin’s favour, primarily on the basis of the evidence provided by each party. Griffin provided first-hand accounts of the 2006 concrete polishing, which convinced the BCSC that the premises were in good condition at the commencement of the term. Accordingly, the burden shifted to Raydon to convince the BCSC that the reasonable wear and tear exception applied, but Raydon was unable to provide satisfactory evidence to the court.

Takeaways

Landlords and tenants should pay close attention to the tenant’s restoration obligations upon termination or expiry of the term (particularly with heavy users) to ensure that their expectations are aligned. Landlords and tenants are also well advised to conduct joint inspections at the commencement and expiry of the lease (and to record such inspections with notes, videos, photographs and other records which confirm the state of repair of the leased space) to ensure that there is adequate evidence in the event of any dispute.

BC Government Enacts New Exemption and Refunds For Foreign Entity Tax

Posted in Tax
Comment

On March 15, 2017, the BC Government issued Order In Council 152/17 (the “OIC”), which creates a retroactive exemption from the 15 percent Foreign Entity Tax (the “Tax“) for foreign nationals applying for permanent residency under BC’s Provincial Nominee Program, and provides refunds for certain purchasers who have previously paid or are required to pay the Tax and later become Canadian citizens or permanent residents. The OIC enacts these changes by way of amendments to the Property Transfer Tax Regulation. For additional information on the Tax, see our previous posts here and here.

Inclusion in BC’s Provincial Nominee Program (BC PNP) places a foreign national into a “fast track” stream with respect to its permanent residency application. The Program is divided into two categories: entrepreneurial nominees (i.e. foreign nationals with high net-worth and business or management experience) and skilled nominees (i.e. foreign nationals filling in-demand occupations). Current foreign national provincial nominees who purchased a principal residence on or after August 2, 2016 (the effective date of the Tax), and paid the Tax, have 18 months following the date of their purchase to claim a refund for the additional tax. The new exemption is available for provincial nominees who are foreign nationals purchasing principal residences in the Greater Vancouver Regional District. The exemption applies to the purchase of an improved residential dwelling, provided the provincial nominee intends to inhabit the dwelling as their principal residence. The exemption can only be used by provincial nominees once, and is not available for companies or taxable trustees.

The number of nominations under the BC PNP is based on annual nomination allocations from the Canadian federal government, and processing times at the BC Government. For 2017, the allocation is 6,000. In 2016, it was 5,800. Given that many nominees relocate to markets affected by the Foreign Entity Tax, the OIC may provide relief for a significant number of home buyers.

Starting August 2, 2017, a refund will be available for Canadian citizens or permanent residents who have previously paid the Tax and have obtained citizenship or permanent residency status in the period following the effective date of the Tax. Going forward, refunds will also be available for foreign national purchasers who become Canadian citizens or permanent residents within one year after purchasing their property, and is not available for companies or taxable trustees. In order to be eligible for the refund, the Tax must have been paid in respect of a residential property purchase which, on that date of registration of the applicable conveyance, included a permanently affixed improvement that was intended to be a dwelling; and the purchaser must continuously occupy that dwelling as his or her principal residence for at least a year beginning on a date that is at least 92 days after the acquisition date. As with the provincial nominee exemption above, each purchaser is only eligible to receive a refund of the Tax once, and must claim it within 18 months of purchasing the property.

Anecdotally, it appears that certain foreign buyers already in the process of applying for permanent residency have entered the market by way of purchasing presale condos and townhouses, with the plan that they would obtain permanent residency by the time of completion. This availability of a refund will provide another option for relief from the Foreign Entity Tax for foreign buyers who anticipate becoming permanent residents.

Insolvent Commercial Tenants – What Happens Now?

Posted in Commercial leasing
Comment

Recently, a number of retail enterprises have availed themselves of the protection of the Bankruptcy and Insolvency Act (BIA) and the Companies’ Creditors Arrangement Act (CCAA), Canada’s insolvency statutesThe BIA and CCAA, as federal statutes, have various provisions that allow a debtor to deal with their leases in a manner which may be inconsistent with the terms of the written lease agreement or BC’s Commercial Tenancy Act (CTA) and wishes of the landlord.

A necessary component of any insolvency proceeding is an evaluation of each business location, and any lease agreements pertaining to it, to determine which, if any, should be retained, disclaimed, or assigned, those being the three ways that a commercial property lease can be dealt with under the provisions of the BIA and CCAA.  This article is intended to provide a brief overview of how these options are implemented and what recourse, if any, a landlord has upon receiving notice from an insolvent tenant, or the court’s officer, of such steps being taken.

Retaining Leases: A debtor restructuring under the CCAA or BIA, or a trustee under the BIA, may wish to retain a real property lease, and continue to occupy the premises accordingly.  Landlords are in fact stayed from terminating leases after an insolvency event, solely because of that insolvency event (s. 65.1 BIA) notwithstanding that the lease may provide that such an act is a default (s. 65.5 BIA).  Absent a post filing default, a landlord can find themselves stayed for a considerable period of time while the insolvency proceedings take shape, as long as the current rent obligations are met. A restructuring business will generally wish to retain leases for two reasons, to maintain ones that are necessary for its restructured business to continue or to enable the debtor to assign it to a third party as part of its restructuring effort. In a bankruptcy scenario, a trustee may retain a lease (s. 30(1)(k) BIA), which it will generally do if there is value to the estate in its assignment (as described below).

Disclaiming Leases:  Both the BIA and CCAA provide for the disclaimer of a lease, whereby the landlord’s rights under the lease can be extinguished in the insolvency proceedings, leaving the landlord with only a provable claim against the estate assets which may be limited (as described below).  Where the debtor is restructuring its business under a BIA Proposal there are strict timelines for the disclaimer.  The debtor can only do so between its initial filing and the filing of the Proposal/Plan itself, on 30 days’ notice.  In a CCAA proceeding, a debtor has no specific time limits, although it would practically occur before the Plan is filed.  A landlord may object to any disclaimer, but must do so within 15 days of receiving the notice (s. 65.2 BIA; s. 32 of CCAA).  The onus then shifts on the debtor to establish that the disclaimer is necessary for a successful restructuring.

Assignment of Lease: In a bankruptcy, after electing to retain a lease a trustee may assign the lease to a third party (s. 29 of the CTA, and s. 30(1)(k) and 146 of BIA), notwithstanding that the lease contains a prohibition of such assignment.  Similarly, the CCAA allows for a debtor company to seek a court order assigning such rights, but all monetary defaults must be remedied before such an assignment can occur (s. 11.3).  A landlord can oppose such an assignment, but it will generally be granted when the assignee is able to establish that they are capable of performing the obligations and it is not otherwise inappropriate, upon depositing up to 3 months’ rent or guarantee bond to secure it. The lease is assigned on its existing terms, including any terms as to base and additional rent terms, or use clauses.  The landlord must consent to any amendments being sought by an assignee.

Proof of Claims against the Estate: In a bankruptcy, a landlord is entitled to a “preferred” claim (i.e. to be paid prior to other unsecured creditors, under a specific priority scheme) for the arrears of rent owing for a 3 month period immediately preceding the insolvency event, and accelerated rent, if provided for under the lease, for 3 months thereafter, up to the realizable value of the assets left on the premises.  To the extent that the realizable value of the assets in the premises is insufficient to pay the landlord’s claim in full, the landlord can claim as a general unsecured creditor for the shortfall arising from that. However, it is prohibited from claiming rent for the unexpired term of the lease over and above those amounts (s. 29(7) CTA).  If there has been a disclaimer of the lease in a proposal proceeding, the proposal must provide for the manner that the claim will be dealt with, the options for which are prescribed in the BIA, but can include full damages owing under the lease (s. 29(5)(6) CTA; s. 65.2(4)(5) of the BIA).

As the above illustrates, there are various remedies a commercial tenant has in an insolvency proceeding which can be imposed upon a landlord.  A landlord’s options in response are generally limited both in time and scope. As such, it is important that if any notice is received as to insolvency proceedings being commenced by or against a tenant as against the lease rights, legal advice is immediately sought to preserve and maximize all available rights and remedies arising therefrom.

BC Government Pushes Towards Foreign Ownership Restrictions on Agricultural Reserve Land With Bill M-205

Posted in Property Law
Comment

On February 16, 2017, Bill M-205 (Property Law and Land Title Amendment Act, 2017) passed first reading which, amongst other things, proposes to make amendments to the Property Law Act (British Columbia). Notably, Bill M-205 would restrict ownership of land within the Agricultural Land Reserve (the “ALR”) by foreign nationals or foreign corporations to a maximum of five acres. The ALR is a collection of approximately 11 million acres of land in British Columbia that has been designated for farming purposes. The proposed amendments would permit foreign nationals and foreign corporations to hold land within the ALR in excess of this amount with the permission of the Lieutenant Governor in Council. For a concise discussion of what constitutes a “foreign national” or a “foreign corporation”, see Ed Wilson, Peter Tolensky, and Stephanie Redding’s blog post here.

Although Bill M-205 has not yet become law, this Bill will be one to watch as it moves through the legislature.

Managing the Relationship between Landlord, Tenant and Tenant’s Lender

Posted in Commercial leasing
Comment

Landlords who enter into commercial leases with tenants accept, and expect in return, some degree of liability as spelled out in leases and commercial tenancy legislation. After all, leases are intended to be two-way streets: the landlord provides the tenant with a leasehold interest in real property, and the tenant pays rent in return. Understandably, landlords are in no rush to assume additional liability to any third-party lender of the tenant.

For many commercial tenants, however, business viability is dependent on obtaining financing. Tenants often require financing to fund the initial fit-out of their leased premises, and without financing they may be unable to open for business. In such situations, a tenant’s lender may require a security interest in the tenant’s trade fixtures and personal property located within the leased premises as a condition of advancing funds. Consequently, the lender often also requires the landlord to enter into a separate agreement with the tenant’s lender.

Such agreements typically set out a number of standard consent provisions, such as:

  1. the landlord waives any right to seize the tenant’s property for which the lender has a security interest;
  2. the landlord allows the lender to enter the leased premises to seize the tenant’s property; and
  3. the landlord provides the lender with notice when the tenant has defaulted under the terms of the lease.

Financing may be unavailable without this separate agreement between the landlord and tenant’s lender, and while it is ultimately a business decision whether or not the landlord agrees to enter into such an agreement, the landlord’s refusal could result in a deal going south.

While entering into agreements with third-party lenders may be a necessary burden for landlords in the business of commercial leasing, landlords should ensure that they engage legal counsel to review the agreement and make any revisions necessary to ensure lenders do not obtain rights that are unnecessarily detrimental to their interests, for example:

  1. The lender may ask that the landlord provide them with written notice if there is any amendment to the terms of the lease, or if the tenant is in default under the terms of the lease. A landlord should proceed with caution when presented with such a provision, and instead may consider agreeing only to use commercially reasonable efforts to provide the lender with notice of any amendment or default. The landlord should also ensure that this provision unequivocally specifies that the landlord will have no liability to the lender should the landlord fail to provide notice.
  2. The lender may require entry onto and possibly possession of the leased premises in connection with removing any tenant property over which they have taken security. In this case, the landlord should require that the lender:

a.  promptly repair, or, at the landlord’s option, reimburse the landlord for any damage caused by the lender to the leased premises (or any adjacent premises owned by the landlord);

b.  follow all reasonable directions of the landlord to minimize disruption and maximize safety during the removal;

c.  pay all arrears of rent and continuing rent obligations on taking possession of the property; and

d.  not conduct any public auction or private sale on the landlord’s premises.

3.  The agreement with the lender should also specify that the landlord is not the lender’s agent and owes no duty of care to the lender with respect to protecting the lender’s interest in the tenant’s property located in the leased premises. Additionally, the landlord should insist that the lender indemnify the landlord against all claims arising from such interest.

City of Vancouver Issues Standard Form Letter of Credit Policy

Posted in Development, Lenders, Municipal law
Comment

The City of Vancouver (the “City”) has issued a new corporate policy on Letters of Credit that sets out the requirements that must be met where applicants for City approvals are required to provide security to the City for development or non-development projects.

The policy provides that the City will not accept any form of cheque (whether certified or not) or bank draft as an alternative form of security and that the City will only accept letters of credit from the following financial institutions:

  • Bank of Montreal
  • The Bank of Nova Scotia
  • Canadian Imperial Bank of Commerce
  • Canadian Western Bank
  • National Bank of Canada
  • Royal Bank of Canada
  • The Toronto Dominion Bank
  • HSBC Bank Canada
  • BlueShore Financial Credit Union
  • Coast Capital Savings Credit Union
  • Vancouver City Savings Credit Union

The policy also includes a copy of the only form of letter of credit that will be accepted by the City going forward. A copy of this form of letter of credit can be found at the link here: City of Vancouver – Letter of Credit Template.  The City has advised that the form of letter of credit has been vetted by the major national banks on the above list.  The application of the City’s new policy along with the approved form of letter of credit should streamline the process of settling security with the City when required as part of the City’s approval process.

 

British Columbia Law Institute Publishes Consultation Paper on Complex Stratas

Posted in Condominium (strata) law
Comment

The British Columbia Law Institute published on September 1, 2016 its Consultation Paper on Complex Stratas seeking public comments on proposed reforms to the Strata Property Act and its regulations concerning sections, types, and phases.

The BCLI carries out scholarly research, writing and analysis for law reform, collaborating with government and other entities, and providing materials and support for outreach and public information.

Sections and types allow a strata corporation to manage cost sharing between owners, while phases permit the development of a strata property in segments over tended time. These tools are important in creating and sustaining sophisticated, architecturally varied, or mixed-use stratas. With the publication of the consultation paper, the public has an opportunity to consider and comment on a comprehensive list of needed reforms to sections, types, and phases.

The consultation paper has 68 tentative recommendations for reform, including:

  • 29 tentative recommendations on sections, which propose clarifying the process for creating and cancelling sections, spelling out section powers and duties strengthening section governance, budgets, and finances;
  • 14 tentative recommendations on types, which propose clarifying the process for creating and cancelling types and fine-tuning the operation of types; and
  • 25 tentative recommendations on phases, which propose enhancing the phasing process, simplifying governance in a phased strata corporation and providing additional protections for the financial interests of owners in a phased strata.

Ed Wilson, senior partner of our Real Estate Group is a member of the BCLI’s Strata Property Law Project Committee, which commenced its review of the Strata Property Act in October of 2013 and will continue its review of other important issues into 2017.  Lisa A. Peters, head of Lawson Lundell’s Research and Opinion Group is the incoming Chair of the BCLI.

The full consultation paper, a summary consultation, a response booklet, a background and a link to BCLI’s survey are all available at http://www.bcli.org. The consultation period ends January 15 2017.

 

New Real Estate Tax Leads to Collapsed Deals

Posted in Tax
Comment

The provincial government’s new 15 per cent tax on foreign purchasers of residential property is the talk of the town in Metro Vancouver.  While many local residents have spent the last several days debating about the likely effect of the tax, others are already facing the consequences as buyers respond to the tax by failing to complete on binding agreements of purchase and sale.

To read more, click the original post from our Western Canada Business Litigation Blog here.

Strata Wind Up Amendments Come into Effect

Posted in Condominium (strata) law, Strata wind up
Comment

On July 28, 2016 highly anticipated changes to the British Columbia Strata Property Act came into effect by regulation. The following news release from the government provides more information about these amendments.

Of key importance to strata corporations, developers and owners alike is the reduction in the voting threshold required to terminate a strata corporation. Prior to these amendments, the Strata Property Act required a unanimous vote of all strata lot owners to terminate a strata corporation. With the coming into effect of the regulations, this voting threshold has been lowered to 80% with a court order. For more information regarding this amendment please see our previous blog post that examined a proposed amendment to the Strata Property Act.

Although these amendments to the Strata Property Act make it easier for owners to vote to wind up a strata corporation, a strata wind up is a technical, complicated process. Legal advice should be sought early on in the process to help ensure a successful wind up. Lawson Lundell’s Strata Wind Up Group assists strata corporations, developers, strata management firms, appraisers and real estate agents in all aspects of strata corporation wind ups. We have valuable experience dealing with strata wind ups, including the first court-approved wind up in British Columbia, and can assist strata corporations, developers and real estate agents in navigating this process.

For more information, please contact a member of the Strata Wind Up Group: