CRT Says Retroactive Fines Improper
In a recent Civil Resolution Tribunal ("CRT") strata decision, a strata owner disputed fines levied against her for renting her strata lot out: Shen v The Owners, Strata Plan LMS 970, 2020 BCCRT 953. The strata was seeking to collect $19,500 in fines against the owner.
In this case, the strata had a rental restriction bylaw wherein an owner required strata permission before renting their strata lot. In November of 2019, the owner was renting her strata lot, but never sought prior permission. November 29, 2019, the strata notified the owner of her breach of the bylaws. The owner didn't seek permission and the strata followed up on the bylaw breach issue, and invited the owner to respond. The second letter warned the owner that council intended to impose retroactive fines to June 1, 2019 - this second letter was sent to the owner December 20, 2019.
By the end of January 2020, the strata decided to fine the owner. Further discussions ensued and by April 21, 2020, the strata advised the owner that fines were imposed in the sum of $19,500, which was a fine of $500 every week back to June 1, 2019 to March 1, 2020.
The CRT referred to the BC Court of Appeal case, Terry v The Owners, Strata Plan NW 309, 2016 BCCA 449 as the leading case on bylaw enforcement and fines. The CRT noted that the Strata Property Act and the Terry case do not address the issue of retroactive fines, but the Court of Appeal was very clear in the Terry case that, if section 135 of the Strata Property Act is not strictly followed, that is sufficient reason to set aside all fines that were imposed before the owner was given the particulars of the complaint and a reasonable opportunity to be heard including a hearing.
"53. . . Here, [the owner] was not given the particulars of the complaint until the strata wrote to her on November 29, 2019. The November 29, 2019 letter did not advise [the owner] that retroactive fines would be imposed. It was not until later correspondence in December 2019 that the strata stated retroactive fines to June 1, 2019 would be considered. I find that section 135 of the SPA does not permit retroactive fines. I find the strata's retroactive fine charges are akin to it charging fines before the strata had notified [the owner] of the particulars of the complaint. This is especially true given the November 29, 2019 letter did not address that bylaw fines might be charged retroactively.
54. I am satisfied the strata received a complaint about [the owner] renting SL 21. Based on Terry, I find the earliest date the strata could impose fines was November 29, 2019 as I find the strata's letter of that date complied with section 135 of the SPA. Subsequent letters were exchanged and a hearing was held on February 10, 2020, also in accordance with section 135. I find the strata advised [the owner] of its decision to impose fines, albeit for an incorrect amount as discussed below, on April 21, 2020, which I find was reasonable under section 135(2) of the SPA.
. . .
56. Strata bylaws 30(7) and (13) respectively allow for a find of $500 if an owner does not obtain permission of the strata council before renting their strata lot, and a continuing fine of $500 every 7 days for as long as the breach continues. Given this, I find [the owner] is responsible for an initial fine of $500 on November 29, 2019, and a continuing fine of $500 every week for 11 weeks until February 20, 2020, the date the Dispute Notice was issued in this dispute. This amounts to $6,000 and I find [the owner] is liable to the strata for this amount. I order the fines for [the owner's] breach of bylaw 30 are reduced to $6,000."
While CRT decisions are not binding, they are persuasive to another CRT adjudicator and this case gives owners and stratas guidance on how the issue of retroactive strata fees will be resolved in future claims. This also shows that, when an owner is breaching the bylaws, the strata should quickly take bylaw enforcement steps or they will lose potential enforcement power by having fines waived.
Taeya Fitzpatrick has specialized in strata law for the start of her practice, has won cases for her clients in the BC Supreme Court, the BC Court of Appeal, and assisted with a client succeeding in defending a Civil Resolution Tribunal claim. Taeya offers full services to a strata corporation or a strata owner from redrafting the strata’s bylaws, collection of outstanding strata fees or other charges, issues with bylaw enforcement, to amending the strata plan. For more information on the services provided, you can reach Taeya by email, phone: 250-762-6111, or at her Web Page.