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Professional Standards Manual

Notice of Change: Information in this manual will be changing when new rules about disclosures and dual agency take effect on June 15, 2018. Please check back for up-to-date information about agency and disclosure obligations. Learn more about the new rules.

Strata Management Services

2. Practice Standards

(g) Management of Rental Property Owned by a Strata Corporation

[06/15/2010 The following information added to Professional Standards Manual]

A strata corporation may own common property, or one or more strata lots which the corporation allows people to use, for a fee, in a variety of ways. These strata lots are typically used in one of the following ways:

  1. Short term vacation rentals – strata lots are available to the general public for vacation rental;

  2. Guest suites – the strata lot is available for the use of family and/or friends of strata lot owners for short term stays while they visit people who reside in the complex;

  3. Rental real estate – the strata lot is rented in the open market by way of a tenancy agreement; and

  4. Resident manager suites – the strata lot is rented to an employee of the strata corporation. The value of the rent is often deducted from the employee’s pay.

Whether, and if so how, the Real Estate Services Act (RESA) applies to the management of these rentals is dependent on the nature of the use.

Short term vacation rentals

The short term rental of accommodation (often called vacation accommodation or vacation rentals) is covered under the Business Practices & Consumer Protection Act administered by Consumer Protection BC. Businesses, including people who are licensed under RESA, may be required to be licensed as either a travel agent or travel wholesaler through Consumer Protection BC if they rent accommodation or short term vacation properties they do not own. More information with respect to these requirements may be found on Consumer Protection BC’s website at www.consumerprotectionbc.ca.

Guest suites

The management of the use of a guest suite, as described above, does not require rental licensing under RESA or a licence under the Business Practices & Consumer Protection Act. A brokerage providing strata management services to a strata corporation may assist in managing the use of a guest suite as a part of the services it provides.

Rental real estate

A strata lot that is used for market rental is considered rental real estate under RESA, and the strata corporation is the landlord in relation to its rental. A strata corporation landlord may:

  1. manage its own rental unit,

  2. have an unlicensed employee of the strata corporation, acting either under the ‘Exemption for employees of principals’ in section 2.1 of the Real Estate Services Regulation (the ‘Regulation’) or under the ‘Exemption for caretakers providing services to different owners’ in section 2.13 of the Regulation, manage the unit, or

  3. contract with a brokerage licensed to provide rental property management services to manage the unit on behalf of the strata corporation.

The definition of “rental property management services” under section 1 of RESA includes showing rental real estate to prospective tenants, negotiating the terms of the tenancy, and collecting rent. Therefore, a brokerage engaged to provide strata management services by a strata corporation client that wishes to rent a strata lot as rental real estate requires a licence to provide rental property management services in order to assist the client in this way. A brokerage licensed to provide strata management services and/or trading services only is not licensed to assist with these rental property management activities.

Any individual who provides rental property management services to a strata corporation client on behalf of a brokerage must also either be licensed to provide rental property management services or be an unlicensed employee of a brokerage that is licensed to provide rental property management services, where the employee is acting under the ‘Exemption for caretakers employed by brokerages’ in section 2.14 of the Regulation. Section 2 of RESA does not allow a licensee to also act under one of the exemptions; therefore, a person licensed to provide strata management services and/or trading services only may not also act under this exemption.

A brokerage providing only strata management services to a strata corporation client should not be directly involved in collecting rents, security deposits or pet damage deposits for the use of that client’s rental real estate.

A brokerage that is providing strata management and rental property management services to the same strata corporation must ensure that the requirements of section 5-1 of the Real Estate Rules with respect to a written strata management service agreement, as well as a written rental property management service agreement, have been satisfied. Section 5-1 may be satisfied through one service agreement which addresses both the strata management services and the rental management services, or it may be satisfied by way of two separate service agreements – one for the strata management services and one for the rental property management services.

Resident manager suites

Where a strata lot owned by a strata corporation is rented to an employee of the strata corporation, the Real Estate Council would not require a brokerage that provides strata management services to the strata corporation to also be licensed to provide rental property management services with respect to the management of this strata lot so long as the brokerage does not:

  1. negotiate or enter into a contract with the employee (tenant) on behalf of the strata corporation (landlord) with respect to the use of the strata lot (e.g. tenancy agreement);

  2. collect rent or security/pet damage deposits for the use of the strata lot (i.e. either the rent and/or security/pet damage deposit are collected by the strata corporation or the value of the rent is deducted from the employee’s pay); and

  3. manage landlord and tenant matters between the strata corporation (landlord) and the employee (tenant).

* A strata corporation may want to use rent it has collected for the use of a strata lot it owns to offset common expenses. To this end, a strata corporation may forward some or all of this rent to its strata management brokerage with instructions to use the money to offset common expenses. Based on the instructions of the strata corporation client, typically included in the written service agreement, the funds should be deposited into the appropriate trust account maintained in the name of the strata corporation.