Strata Rental Restrictions -A Cautionary Word


Blog by Arnold Shuchat | April 8th, 2013


It would be safe to say that the average tenure of a condo or townhouse owner is less than that of a homeowner.  People buy condos often as a first move and gradually tend to move up to larger quarters.  Strata ownership accounts for a larger proportion of early and late life phase property ownership than home ownership.  At the early phase, it is often not too long before a job transfer, relationship or other such development acts as a catalyst for a move.
Lately I have witnessed strata owners trapped in their developments and encumbered with high strata fees and mortgage costs without the ability to rent out their units due to rental restrictions contained in the strata bylaws. While there are often hardship provisions contained in these bylaws, there is a great deal of discretion and power politics in strata council administration and extricating oneself from the toxic outbound cashflows during this period is neither garanteed nor even simple. I recently observed a strata prepared to have an out of town owner continue to have to financially support a high ratio mortgage in a situation where they refused to continue to allow a peaceful tenant continue to occupay the premises.  The inevitable result will be foreclosure and severe credit damage.
As a consequence, I recommend that buyers not tread lightly through the strata rules when forming an opinion as to whether to buy a particular unit.  The property should not only be appealing to live in, but should be well run and through its rules, provide owners with an ability to rent their property out without an array of legal and political roadblocks. Make sure to check out the number of rentals allowed in the strata and whether there is any history of refusing rentals.  This might protect you should a job transfer occur down the road.  A soft real estate market may make selling difficult and the ability to rent the unit may provide the only financial backstop against financial disaster. 

a detailed purchasing or marketing plan which could save thousands of dollars.
To arrange a viewing of this or any property you are interested in or to obtain a 
 professional opinion as to the value of a property, please email me at:
ashuchat@shuchatgroup.com or call me at: 778-227-7325
If you or any of your friends are thinking of buying or selling a property, pleaseemail me at: ashuchat@shuchatgroup.com or call me at: 778-227-7325 to discuss a detailed purchasing or marketing plan which could save thousands of dollars.

To arrange a viewing of this or any property you are interested in or to obtain a  professional opinion as to the value of a property, please email me at:ashuchat@shuchatgroup.com or call me at: 778-227-7325