Contact Us Licensee Login

Professional Standards Manual

IV. Strata Management Services

Overview

The Real Estate Services Act (RESA) requires that all individuals or companies who provide ‘‘real estate services’’ in expectation of remuneration, unless specifically exempted, obtain licensing. In addition to rental property management services and trading services, ‘‘real estate services’’ includes the provision of strata management services.

‘‘strata management services’’ means any of the following services provided to or on behalf of a strata corporation:

(a) collecting or holding strata fees, contributions, levies or other amounts levied by, or due to, the strata corporation under the Strata Property Act;

(b) exercising delegated powers and duties of a strata corporation or strata council, including

(i) making payments to third parties on behalf of the strata corporation,

(ii) negotiating or entering into contracts on behalf of the strata corporation, or

(iii) supervising employees or contractors hired or engaged by the strata corporation but does not include an activity excluded by regulation;

The Council has established educational requirements for those wishing to obtain a licence or to amend an existing licence in order to provide strata management services. The education requirements depend on whether an individual currently holds a real estate licence and whether the individual has carried out strata management in the past.

Information about the educational requirements applicable to the various groups is available from the Council’s website at www.recbc.ca. Information about the Strata Management Licensing Course can be obtained from the Real Estate Division at the Sauder School of Business, University of British Columbia at www.realestate.ubc.ca.

(a) Exemptions from Licensing

(i) Strata Council Members

Since licensing is required of those providing real estate services ‘‘to or on behalf of another, for or in expectation of remuneration’’, licensing and the other requirements of RESA do not apply to strata council members who are not licensees and who volunteer their time. In addition, the following exemption applies to strata council members who are strata lot owners and who are not licensees.

(ii) Exemptions for Strata Lot Owners

a) Exemption for an owner not licensed under RESA (Section 2.17 of the Real Estate Services Regulation)

(1) Subject to subsection (2), an individual is exempt from the requirement to be licensed under Part 2 of the Act in respect of strata management services if the individual

(a) is the owner, as defined in the Strata Property Act, of a strata lot,

(b) provides the strata management services to or on behalf of the strata corporation of which the person is a member by reason of being the owner of the strata lot, and

(c) provides strata management services under the exemption provided by this section to no more than 2 strata corporations.

(2) On receipt of any strata fees, contributions, levies or other amounts levied by, or due to, the strata corporation under the Strata Property Act, the exempt individual must promptly deliver the money to the strata corporation.

b) Exemption for an owner who is a licensee (Section 9-3 of the Rules)

(2) … subject to the Rules, this Act [RESA] applies to every licensee who provides real estate services, even if the licensee

(a) provides real estate services on the licensee’s own behalf,

(b) provides real estate services to or on behalf of another but not for or in expectation of remuneration, or

(c) would other wise be exempted by this Act or the Regulations from the requirement to be licensed in relation to the provision of those real estate services. (Section 2(2) of RESA)

Insofar as strata management is concerned, this section of RESA means licensees can only rely on the following exemption. Aside from this exemption, a person licensed to provide only trading or rental property management services must generally become licensed to provide strata management services.

(1) Subject to this section, the Act and these Rules do not apply to a managing broker, associate broker or representative who is a strata lot owner in relation to strata management services provided to or on behalf of the strata corporation of which the licensee is a member by reason of being a strata lot owner, if all the following conditions are met:

(a) the licensee provides strata management services under this section to no more than 2 strata corporations;

(b) the licensee discloses in writing to the strata corporation, before providing the services, that

(i) even though they are licensed under the Real Estate Services Act, they are not acting as a licensee in this case,

(ii) the licensee is not regulated under the Real Estate Services Act in relation to the strata management services, and

(iii) the strata corporation is not entitled to the same protections applicable under the Real Estate Services Act to persons who deal with licensees who are not acting under this section of the Rules;

(c) the licensee provides a copy of the written disclosure under paragraph (b) to the managing broker of the related brokerage;

(d) the licensee does not have sole signing authority for withdrawals of any funds of the strata corporation and does not other wise have sole authority for expenditures of any funds of the strata corporation;

(e) the strata management services are not provided for or in expectation of remuneration.

(2) On receipt of any strata fees, contributions, levies or other amounts levied by, or due to, the strata corporation under the Strata Property Act, the licensee must promptly deliver the money to the strata corporation.

(3) Part 4 [Discipline Proceedings and Other Regulatory Enforcement] of the Act applies in relation to a contravention of subsection (2).

Note that, under this exemption, the strata management services may not be ‘‘provided for or in expectation of remuneration’’ and that the manager may not hold money on the strata’s behalf.

(iii) Exemption for caretakers, resident managers and other employees

a) An employee of one strata corporation (Section 2.1 of the Real Estate Services Regulation)

An individual is exempt from the requirement to be licensed in respect of real estate services, including strata management, if all the following apply:

(a) the real estate services are provided to or on behalf of a principal in relation to those services;

(b) the individual is the employee of the principal referred to in paragraph (a);

(c) the individual is not providing real estate services to or on behalf of any person other than the principal referred to in paragraph (a).

In the case of strata management services, ‘‘principal’’ is defined as ‘‘the strata corporation to whom or on behalf of whom the services are provided’’. (Section 1 of RESA)

As a result, a caretaker or other employee of the strata corporation to whom or on behalf of whom the services are provided, resident on the premises or other wise, may provide strata management services if he or she is an employee in accordance with the criteria of the Canada Revenue Agency. The strata corporation, as employer, is free to decide the extent to which its employee may act on its behalf and may, for example, give him or her complete control of the strata corporation’s money, authority to enter into contracts on behalf of the strata corporation, and so on.

Note that this exemption applies only to an individual, not to a limited company, sole proprietorship, or partnership, and that it applies exclusively to employees of only one strata corporation.

b) An employee of more than one strata corporation (Section 2.18 of the Real Estate Services Regulation)

An individual employed as a caretaker or manager by more than one strata corporation ‘‘is exempt from the requirement to be licensed under Part 2 of the Act in respect of collecting strata fees, contributions, levies or other amounts levied by, or due to, the strata corporation under the Strata Property Act’’. He or she may receive, but not hold, strata money. Any money collected under this exemption must be promptly delivered for deposit to the strata corporation on whose behalf it was collected. As opposed to a caretaker employed by only one strata corporation, he or she may not provide the following strata management services according to Section 1 of RESA:

(a) … holding strata fees, contributions, levies or other amounts levied by, or due to, the strata corporation under the Strata Property Act;

(b) exercising delegated powers and duties of a strata corporation or strata council, including

(i) making payments to third parties on behalf of the strata corporation,

(ii) negotiating or entering into contracts on behalf of the strata corporation, or

(iii) supervising employees or contractors hired or engaged by the strata corporation but does not include an activity excluded by regulation; (Section 1 of RESA)

c) An employee of a brokerage (Section 2.18 of the Real Estate Services Regulation)

Since a caretaker or unlicensed manager employed by a brokerage is not employed by a strata corporation, the exemption in Section 2.1 of the Real Estate Services Regulation does not apply. Accordingly, the only strata management service such an individual may provide is collecting money on behalf of the strata.

(1) Subject to subsection (2), an individual who is employed as a caretaker or manager by a strata corporation, or by a brokerage that provides strata management services to or on behalf of a strata corporation, is exempt from the requirement to be licensed under Part 2 of the Act in respect of collecting strata fees, contributions, levies or other amounts levied by, or due to, the strata corporation under the Strata Property Act.

(2) On receipt of money referred to in subsection (1), the exempt caretaker or manager must promptly deliver the money to the strata corporation or brokerage, as applicable.

As in the case of a caretaker employed by several strata corporations, a caretaker or unlicensed manager employed by a brokerage cannot provide the other strata management services listed in Section 1 of RESA.

The Council has developed further information on this issue that is available here.

(iv) Exemption for owner-developers (Section 2.19 of the Real Estate Services Regulation)

2.19. In relation to a strata corporation, the owner-developer, as defined in the Strata Property Act, is exempt from the requirement to be licensed under Part 2 of the Act in respect of strata management services provided to or on behalf of the strata corporation, but only until control of the strata corporation’s money is required to be transferred under section 22 of the Strata Property Act.

Note: Within one week after the first annual general meeting, the owner-developer must (a) transfer control of the strata corporation’s money to the newly elected council, and (b) deliver to the newly elected council any keys, garage door openers or other means of access that the owner-developer possesses for the purposes of exercising the powers and performing the duties of the council. (Section 22 of the Strata Property Act.)

(v) Exemption for collection agents (Section 2.2 of the Real Estate Services Regulation)

A person who is a collection agent licensed under the Business Practices and Consumer Protection Act is exempt from the requirement to be licensed under Part 2 of the Act in relation to real estate services provided in the course of the person’s business as a collection agent within the meaning of the Business Practices and Consumer Protection Act.

(vi) Various other exemptions (Section 3 of RESA)

In addition to any exemption provided by Regulation, the following are exempt from the requirement to be licensed under this Part:

(a) a person acting under the authority of a court;

(b) a trustee in bankruptcy, custodian, receiver, receiver manager or liquidator who is appointed under a provincial or federal enactment, in respect of real estate services undertaken by the person in that capacity;

(c) an executor or administrator of an estate, in respect of real estate services provided in relation to real estate owned or held by the estate;

(d) a trustee, in respect of real estate services provided under the terms of a will, marriage settlement or deed of trust;

(e) a financial institution that has a trust business authorization under the Financial Institutions Act, in respect of real estate services provided in relation to real estate that it owns, holds or administers;

(f) a practising lawyer as defined in section 1 of the Legal Profession Act, in respect of real estate services provided in the course of the person’s practice.

(b) Common Licensing Scenarios - Strata

Scenario #1

Joan Pennywise, wanting a bit of extra income in her retirement, has offered to provide accounting services for several small strata corporations.

Does Joan have to be licensed?

Joan can provide accounting services to strata corporations without licensing provided she neither ‘‘collects nor holds’’ money on their behalf.

As ‘‘collecting money’’ includes the receipt of cheques, albeit cheques made out to that strata corporation and deposited by Joan directly into its accounts, the strata council must take responsibility for receiving and depositing all cash and cheques. Joan may help the strata corporation set up pre-authorized, direct deposit payments for owners, but may not handle (i.e., receive, deposit or expend) money in any form.

There is nothing to prevent Joan from recommending payment of invoices and preparing cheques for signing by the strata council, as long they are issued from accounts over which she has no signing authority.

Scenario #2

NW9999, a self managed strata, is facing a building envelope remediation project and wants either a project manager acting as agent for the strata corporation, or an accountant to receive and hold in trust the funds levied for the project, negotiate and enter into contracts on behalf of the strata corporation, and supervise and make payment to employees and contractors hired or engaged by the strata corporation to do the work.

Is a licence required?

All of the above services require licensing under RESA. Unless the project manager or accountant hired by the strata corporation is a real estate licensee, they will not be able to provide the services required by NW9999.

Scenario #3

VR9999 is about to begin an expensive building envelope remediation project which its current management company feels unqualified to manage. The strata council of VR9999 is obtaining quotes from other strata management licensees for management of the remediation project, but intends to keep its current management company, from whom it feels it is getting good service.

Can two licensees be engaged by the same strata corporation?

There is nothing in RESA that would prevent VR9999 from engaging two strata management licensees, one to do the regular management of the complex, and one to manage the envelope remediation under separate service agreements. VR9999 should, however, review its current strata management service agreement to ensure it is not an exclusive service agreement in this respect.

Scenario #4

Strata management services are provided to LMS0000 by its resident caretaker. While he is on holiday, the strata council of LMS0000 hires a temporary replacement for him.

Is licensing required?

Since the caretaker is managing the strata corporation under the exemption for employees, his or her replacement must be put on the payroll and satisfy the criteria for employees set by the Canada Revenue Agency.

Scenario #5

BCS0000 wants to become self managed.

Are there any regulatory requirements for this?

There are no regulatory requirements to meet before BCS0000 begins management of its own affairs. The conduct of its council will be governed by the Strata Property Act, a self-administered statute with no enforcement provisions for the Real Estate Council or any other regulatory body.

The Strata Property Act, Regulation and helpful pamphlets designed for strata councils can be found on the website of the Superintendent of Real Estate at www.fic.gov.bc.ca.

Further useful information about self-management is available on the following websites: www.choa.bc.ca and www.visoa.bc.ca

Scenario #6

VIS9999 pays strata agent, John J. John (JJJ), who is an owner in the complex, to provide strata management services. JJJ is a real estate licensee licensed only to provide trading services and rental property management.

Does JJJ require further licensing?

If he were not a licensee, JJJ could be paid for providing strata management services to VIS9999 under the exemption found in Section 2.17 of the Real Estate Services Regulation (see Exemption #1(a) above). Licensees, however, cannot rely on this exemption.

(2) … subject to the Rules, this Act [RESA] applies to every licensee who provides real estate services, even if the licensee

* * *

(c) would other wise be exempted by this Act or the regulations from the requirement to be licensed in relation to the provision of those real estate services. (Section 2(2) of RESA)

With regard to strata management services, the only exemption from the licensing and other requirements of RESA made available to a licensee in the Rules is found in Section 9-3 (Exemption #1(b) above). Under that exemption, JJJ may not provide strata management services ‘‘for or in expectation of remuneration’’.

If he wishes to be paid, JJJ must acquire the appropriate licensing. Then he may provide remunerated strata management services in the name of and on behalf of his related brokerage (presuming the brokerage is licensed to provide strata management services).

Furthermore, until he is licensed properly, JJJ runs the risk of disciplinary action by the Real Estate Council and, in the event of a dispute with VIS9999, of losing his management fees since he is prohibited by RESA from bringing or continuing an action for remuneration in relation to his unlicensed real estate services.

Scenario #7

The strata council of LMS9999 deals mostly with Percy, the unlicensed assistant of their strata agent Penelope.

Must Percy be licensed?

Percy may not act, or appear to act, as an agent of the strata corporation. This means he may not provide any services which require licensing by exercising

… delegated powers and duties of a strata corporation or strata council, including

(i) making payments to third parties on behalf of the strata corporation,

(ii) negotiating or entering into contracts on behalf of the strata corporation, or

(iii) supervising employees or contractors hired or engaged by the strata corporation, or

(iv) enforcing bylaws or rules of the strata corporation, 

but does not include an activity excluded by regulation;

Operating within these restrictions still leaves Percy several ways to assist Penelope in managing LMS9999. He can, for example,

  • answer calls from residents of the complex;
  • take dictation;
  • attend council meetings with Penelope;
  • assist at general meetings of the strata corporation;
  • prepare and edit or proofread minutes on Penelope’s behalf;
  • draft letters and prepare information certificates for her to review and sign;
  • perform bookkeeping services under her direction;
  • ask tradespersons to send her quotes; and
  • provide any other service that does not fall within the definition of ‘‘strata management services’’.

Scenario #8

C. George, a licensee, is elected to sit on the strata council of a strata corporation where he is an owner. The strata has a management company and C. George is not a member of any other strata corporation’s council.

What is required of Mr. George?

The licensing and other requirements of RESA must be met by ‘‘every licensee who provides real estate services’’ (Section 2(2) of RESA). Since what strata council members do falls within the definition of real estate services (strata management services) any licensee who is a member of a strata council must meet the requirements of the licensee exemption above (Exemption #1(b) above).

Mr. George must therefore

  • disclose in writing to the strata corporation, before sitting on the strata council that:
    • even though licensed under the Real Estate Services Act, he is not acting as a licensee in this case,
    • he is not regulated under the Real Estate Services Act in relation to his activities on the strata council, and
    • the strata corporation is not entitled to the same protections applicable under the Real Estate Services Act to persons who deal with licensees who are not acting under this section of the Rules;
  • provide a copy of the written disclosure to the managing broker of his related brokerage;
  • not have sole signing authority for withdrawals of any funds of the strata corporation and not other wise have sole authority for expenditures of any funds of the strata corporation; and
  • accept no remuneration for being on the strata council.

Scenario #9

Grosspar Holdings owns six units in BCS9999 and offers to provide strata management services.

Can Grosspar Holdings manage BCS9999?

The exemption in Section 2.17 of the Real Estate Services Regulation that enables a strata lot owner to provide strata management services is limited to individuals who are owners. It does not apply to a sole proprietorship, a partnership or a corporation. Grosspar Holdings cannot provide strata management services without licensing and meeting the other requirements of RESA.

 

 

 

(c) Application of the Real Estate Services Act

All provisions of RESA, including the Regulations and Rules, apply to individuals or companies providing strata management services.

Section 2 of RESA stipulates that, once an individual is licensed under RESA, RESA, the Regulations, and Rules apply to all real estate services that the licensee may provide, even if the real estate services are provided on the licensee’s own behalf, are provided for free, or would otherwise be exempt. In addition to strata management services, ‘‘real estate services’’ includes rental property management services and trading services. This section of RESA means that an individual licensed to provide strata management services may not provide any real estate services, unless the services are provided in compliance with all the provisions of RESA, the Real Estate Services Regulation and the Rules, or are provided under an exemption.

The Rules contain an exemption which permits a licensee to manage rental property that the licensee or the licensee’s spouse, family partner, son, daughter, or parent owns, or that is owned by certain partnerships or corporations without the need to comply with RESA, as long as certain conditions are met.

In the following section, entitled ‘‘Practice Standards’’, the most significant requirements that are imposed by licensing on strata managers are set out. However, licensees engaged in strata management must be aware that, unless a specific exemption exists for strata managers, all licensing requirements will apply.

For example, a licensee engaged in strata management must comply with all business practice requirements as set out in the Rules, such as the need to display licences, the limitations that are placed on home offices, the requirements relating to the name that a licensee may use, and the provisions relating to advertising.

The Special Compensation Fund (Fund) applies to trust funds held by a licensee engaged in strata management. As a result, all licensees engaged in strata management must contribute to the Fund. Additionally, licensees engaged in strata management participate in the errors and omissions insurance program administered by the Real Estate Errors and Omissions Insurance Corporation.

All licensees, including those licensed to provide strata management services, are subject to the disciplinary authority of the Council. The Council is authorized under RESA to issue administrative penalties in the case of a breach of specified Rules, such as the rules relating to the display of licences, the annual reporting requirements and rules relating to the retention of records. Additionally, a disciplinary committee of the Council, if it finds that a licensee has committed professional misconduct, may make various disciplinary orders, including reprimanding or suspending licensees, or imposing a disciplinary penalty of not more than $250,000 in the case of a representative, associate broker, or managing broker and not more than $500,000 in the case of a brokerage or former brokerage.

RESA provides that a licensee commits professional misconduct if the licensee:

  • contravenes RESA, the Regulations or Rules;
  • breaches a restriction or condition of their licence;
  • does anything that constitutes wrongful taking or deceptive dealing;
  • demonstrates incompetence in performing any activity for which a licence is required;
  • fails or refuses to cooperate with an investigation;
  • fails to comply with an order of the Council, a discipline committee or the Superintendent; and
  • makes or allows to be made any false or misleading statement in a document that is required or authorized to be produced or submitted under RESA.

Licensees engaged in strata management should be familiar with all of the requirements of RESA, the Real Estate Services Regulation and the Rules in order to ensure that they do not inadvertently fail to comply or contravene what is required of them as a result of licensing.