B.C. strata ordered to pay condo owner $19K in damages after dispute over exemption to rental rules

Condos and apartment buildings are seen in downtown Vancouver, B.C., on Thursday February 2, 2017. THE CANADIAN PRESS/Darryl Dyck

A Vancouver strata that denied a condo owner's request for an exemption to rental rules has been ordered to pay over $19,000 in damages, in a decision that describes the council's conduct as "insensitive, stubborn and high-handed."

B.C.'s Civil Resolution Tribunal ruled on the dispute Tuesday. The decision notes that the conflict between Rachel Klingler, the unit's owner, and the strata council predated changes to provincial legislation that prohibit strata councils from imposing most restrictions on rentals, a move the government announced as part of a plan to tackle the housing and affordability crises.

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When Klingler sought permission to rent out her condo, B.C.'s Strata Property Act allowed people to apply for an exemption to rental prohibitions, tribunal member Eric Regher noted, adding that "the strata corporation could not unreasonably deny a hardship application."

Klingler applied for and was granted such an exemption in January of 2021 after she told the strata her income dropped by 90 per cent due to the COVID-19 pandemic. At that time, she said she was moving out of the unit and into a place with a partner and planned to use the condo as a source of rental income. She leased it to a tenant for one year for $2,495 per month.

When the exemption expired a year later, Klingler found herself in an even more difficult situation, the tribunal's decision said. In addition to an ongoing loss of income and the imminent ending of her CERB payments, she was pregnant with twins. The tribunal quoted from a letter from her doctor describing the pregnancy as "high risk" and saying that the babies were likely to be born prematurely and require hospitalization in the neonatal intensive care unit.

Her application for a hardship exemption at that time was denied, and Regher said the strata council did not provide an explanation for why it made its decision, but did say it could be reconsidered if additional documentation was provided.

Soon after, Klingler was hospitalized and provided additional letters from medical professionals saying that her stay was likely to be "indefinite" and that she and her twins required "intensive monitoring," according to the tribunal. She also provided documentation showing she had qualified for a subsidy to assist her with paying for food and shelter while waiting for her twins to be born.

In April of 2022, after asking for three years' worth of tax returns, the strata once again denied Klingler's request for an exemption. Its reasons, according to the tribunal decision, were that they thought she had understated or otherwise misrepresented her income and that the reasons for the initial exemption were no longer in play.

However, Regher noted that Klingler's "financial situation had not improved, and was about to get worse."

Further, the strata said Klingler had the option of selling the unit at a substantial profit, which would have mitigated her hardship. The tribunal rejected that argument, saying the strata council's key mistake – and the reason its decision was unreasonable – was its failure to consider the totality of Klingler's personal and medical circumstances.

"There is no evidence that the strata considered the nature of her pregnancy or the challenging situation she faced when she made her application," Regher wrote.

"Ms. Klingler was hospitalized and facing a medical situation that the strata should have known would monopolize her attention. Her doctors had warned her to expect a difficult birth of high-needs twins, followed by a potentially lengthy stay in hospital for both her and her twins. It is difficult to understand how the strata could have reasonably expected Ms. Klingler to navigate selling (the unit) at the same time. I find that the strata effectively ignored Ms. Klingler’s personal and medical situation."

The tribunal awarded Klingler $16,217.50 in lost rent and $2,500 in aggravated damages.

Aggravated damages, Regher said, are relatively rare and are awarded as compensation for "particularly poor" conduct that causes "intangible injuries, such as mental distress and anxiety." His decision found that the denial of the exemption and the ensuing stress and uncertainty were likely to have caused this type of injury, particularly given Klingler's situation as a new mother who was recovering from surgery herself while her newborns were in the NICU.

"It should have been obvious that denying the application would cause both financial harm and intangible injuries," he wrote, noting that the strata also denied several requests for reconsideration of their decision, which amounted to a "refusal to acknowledge or account for Ms. Klingler’s personal situation."

Klingler also claimed punitive damages but Regher rejected that claim saying those awards "are intended to punish respondents for malicious and outrageous conduct" and that the strata's conduct did not meet that bar in this case.