Short Term Exclusive Use Agreements: When and Why?
Common property belongs to all the owners in a strata corporation in proportion to the owner’s unit entitlement. A general presumption in strata law is that owners are not allowed to use common property except as authorized by bylaw or agreement. This article reviews how owners can enter agreements with strata corporations for the exclusive use of common property.
Methods for granting exclusive use of common property to owners
There are mechanisms in the Strata Property Act that can be used to grant an owner the right to exclusive use of common property. If an owner is granted exclusive use, they can use the common property, subject to the conditions of the grant. The primary methods by which an owner can gain the right to exclusively use common property are:
- Designation of common property as a limited common property for the exclusive use of an owner, and
- A short term exclusive use agreement between an owner and the strata corporation.
This article deals with short term exclusive use agreements (an “Exclusive Use Agreement”).
What is a short term exclusive use agreement?
An Exclusive Use Agreement grants an owner permission to exclusively use a common asset or common property (that has not been designated as limited common property).
An Exclusive Use Agreement is a personal agreement between an owner and the strata corporation in its capacity as a natural person. An Exclusive Use Agreement is not between the strata corporation and the strata lot. This means that if an owner sells their lot the Exclusive Use Agreement comes to an end. An Exclusive Use Agreement does not continue between the new owner of the strata lot and the strata corporation.
Limitations on a short term exclusive use agreement
An Exclusive Use Agreement may not be made for a period longer than 1 year. However, an Exclusive Use Agreement can be renewed for additional terms, provided those additional terms are not longer than 1 year.
An Exclusive Use Agreement exists at the sole discretion of the strata corporation. It may be canceled by the strata corporation at any point in time, provided reasonable notice is provided to the owner of the cancellation. The strata corporation is not required to provide reasons for its cancellation of an Exclusive Use Agreement.
An Exclusive Use Agreement may include conditions on the exclusive use of the common property. These conditions may include restrictions on the activities which may be performed on the common property or require the owner to pay money in exchange for exclusive use. If an Exclusive Use Agreement expires and a new one is created, new conditions may be put on the grant of exclusive use if the strata corporation so chooses.
The Power to Create Exclusive Use Agreements
The Strata Property Act empowers the strata corporation to enter into Exclusive Use Agreements. It is the strata council that exercises this power. Therefore, it is generally the strata council which approves Exclusive Use Agreements. However, if the Exclusive Use Agreement involves a significant change to the use or appearance of the common property, the strata corporation does not have the power to enter into an agreement without approval of the owners.
Short term exclusive use agreements and the alteration of common property
If the Exclusive Use Agreement involves or requires a significant change in the use or appearance of the common property, the Exclusive Use Agreement must be approved by a ¾ vote resolution at a general meeting in accordance with the Act. Despite requiring owner approval, the Exclusive Use Agreement is between the strata corporation and the owner who is granted exclusive use.
The strata bylaws may also impose additional obligations on owners seeking to alter the use or appearance of the common property that is the subject of the Exclusive Use Agreement. For example, the Standard Bylaws, which apply to a strata corporation unless amended, require an owner to obtain written approval from the strata corporation before making an alteration to common property or common assets over which they have exclusive use.
Strata corporation access to the exclusive use property
Under the Strata Property Act, an owner must provide a strata corporation reasonable access to the common property or common assets over which they have exclusive use. The Civil Resolution Tribunal has said that as a component of reasonable access, a strata corporation was required to provide an owner with reasonable notice of its intention to access common property, in non-emergency situations.
Common Uses of Short Term Exclusive Use Agreements
Parking spaces and storage lockers
One way in which parking spaces and storage lockers may be assigned to owners is through an Exclusive Use Agreement. An Exclusive Use Agreement is used where the parking lot or storage locker area is common property and has not been designated as limited common property to the benefit of specified owners.
It is useful to remember that an Exclusive Use Agreement for use of a parking space or storage locker is only for the benefit of a specified owner and not the strata lot. This means that if an owner sells their strata lot, the new purchaser will not get the benefit of the parking space or storage locker. Instead, a purchaser would enter into a new Exclusive Use Agreement with the strata corporation for the exclusive use of a parking space or storage locker.
Yards and patios outside townhouses or ground-floor apartments
Unless the yard or patio outside a ground level unit is a part of the strata lot or designated as limited common property, it is generally common property. This can come as a surprise to some owners who do not realize that the yard behind their home is actually the common property of the strata corporation.
If the yard or patio area is common property, owners are not entitled to the exclusive use of the area unless an Exclusive Use Agreement is entered into and approved or the area is designated as limited common property. An Exclusive Use Agreement for exclusive use of outdoor space must still comply with the normal restrictions on such an Exclusive Use Agreement: the Exclusive Use Agreement cannot be for longer than 1 year and if the owner is going to significantly change the use or appearance of the common property, the Exclusive Use Agreement must be approved by ¾ vote resolution at a general meeting.
Continuation of exclusive use agreements entered into under the Condominium Act
The Strata Property Regulations provide that an exclusive use agreement entered into pursuant to the Condominium Act continues to be enforceable according to the terms of the agreement. However, if the Condominium Act exclusive use agreement is to be renewed, it must be renewed in accordance with the relevant provisions of the Strata Property Act.
Exclusive use agreements under the Condominium Act were not subject to the same 1-year time limitation as Exclusive Use Agreements under the Strata Property Act. Under the Condominium Act, exclusive use agreements were solely at the discretion of the strata corporation and could be ended with reasonable notice. If the strata corporation did not end the exclusive use agreement and the owner continues to own the strata lot, the grant of exclusive use could continue without the requirement for annual renewal. Thus, if an exclusive use agreement was validly made under the Condominium Act, there is the potential that it is still in effect. An example of this can be found in Previer v. The Owners, Strata Plan NW 651, where the CRT enforced an exclusive use agreement entered by a strata corporation in 1994.
Best practices for granting short term exclusive use
The Exclusive Use Agreement should be put into writing. While putting the Exclusive Use Agreement into writing is not required by the Strata Property Act, cases before the CRT have indicated that Exclusive Use Agreements must be in writing for an Exclusive Use Agreement to be validly made.
The decision to enter into an Exclusive Use Agreement should be recorded in the strata council minutes. If the Exclusive Use Agreement needs to be approved by ¾ vote resolution because it involves a significant change in the use of common property, the vote must be recorded in the minutes of the general meeting where the Exclusive Use Agreement is approved.
If a strata corporation needs access to the common property that is the subject of an Agreement in non-emergency situations, it should provide the owner with notice of its intention to access the common property.
Exclusive Use Agreements are an effective way to grant owners the benefit of exclusive use of common property without having to go through the onerous process of designating limited common property.