Assignment of Rights to Tenants
Many Owners are unaware that when leasing out their suite on a long term basis (3+ years), they automatically assign most of their rights to their tenant.
From the Strata Property Act, Section 148:
Long term lease
148 (1) In this section, “long term lease” means a lease to the same person for a set term of 3 years or more.
(2) If a residential strata lot is leased under a long term lease, the tenant is assigned the powers and duties of the landlord under this Act, the bylaws and the rules for the term of the lease.
(3) Before exercising any powers of the landlord, the tenant must have given to the strata corporation written notice of the assignment referred to in subsection (2), stating the name of the tenant and the time period during which the lease is effective.
(4) The strata corporation must give a copy of the notice referred to in subsection (3) to the landlord and to the owner.
(5) The assignment does not include an assignment of the landlord’s responsibility under section 131 for fines or the costs of remedying a contravention of the bylaws or rules.
(6) The tenant must not, without the owner’s consent, exercise any power or right of an owner
(a) to acquire or dispose of land,
(b) to cancel or amend the strata plan, or
(c) to do anything that would affect the owner’s interest in the strata lot, common property or land that is a common asset.
(7) The landlord must not deal with his or her interest in the strata lot, common property or land that is a common asset in a way that unreasonably interferes with the rights of the tenant under the lease or assignment.
This assignment is automatic if the tenant has a 3+ year set term lease at the outset, but can’t be utilized until a copy of the lease (which also states the time period of the lease) is filed with the Strata Corporation, and then sent to the Owner (presumably for confirmation of authenticity). Note the requirement that the lease be for a set term of 3+ years, in other words this doesn’t necessarily apply to tenants who have been in the suite for a lengthy period under a lease that rolls over on a year to year basis, but rather it only applies to those tenants who were specifically allotted a term of 3+ years at the outset of their lease.
The tenant cannot deal with matters that affect the owner’s interest in the strata lot, common property or land that is a common asset – i.e. vote on resolutions that would change/remove a LCP designation for the unit, unless the Owner has consented. In addition, they will never assume the owner’s responsibilities for fines levied against the unit, or other costs such as chargebacks (because of Clause 5).
The obligation lies with the Tenant and Owner to advise the Property Manager of the long-term tenancy, if the Tenant wishes to assume the powers and duties of the Landlord. At a minimum, the Tenant would be allowed to attend and vote at General Meetings in the Owner’s stead. Section 36, which we’ve written about previously, also specifically authorizes a long-term tenant to access Strata Corporation records. Other powers and duties that a Tenant could assume which are worth noting would include eligibility to stand for Council and petitioning for a General Meeting.
It is likely that many Owners are unaware of this provision in the Act, as it is rarely disclosed at the outset to the Property Manager when a long-term lease is entered into (there is no requirement in the Act to file a copy of the lease with the Strata Corporation). We encourage non-resident Owners to ensure they are aware of this provision before they enter into a long-term lease and to seek legal advice on the implications of Section 148.