Veteran property manager Gerry Fanaken likes to refer to strata councils as a “fourth order of government”.
That’s because condo owners elect a group of residents to serve on the board of the strata corporation. These politicians end up overseeing their neighbours’ strata fees. And like other elected officials, they sometimes act in a high-handed manner toward their constituents.
“To be clear, many strata-council members give a lot of their time and do a very good job,” Fanaken tells the Georgia Straight over the phone from Pender Island. “I’m not dumping on everybody. But there are lots of bullies out there—lots of people that completely violate the law and run the buildings the way they want to and not the way the Strata Property Act says. And there’s no recourse against them, no recourse of any substance.”
For over 30 years, Fanaken was CEO of Vancouver Condominium Services Ltd., which managed the affairs of about 165 strata corporations. When the Strata Property Act was introduced in 2000, he wrote a 230-page book explaining how it would change the way multifamily buildings were managed in B.C.
Now a consultant, he has followed that up with a recently released self-published book, Understanding the Condominium Concept: An Insightful Guide to the Strata Property Act. It reviews how the law has been interpreted since its introduction by the last NDP government.
“One of the aspects that has changed significantly in the last 10 years is strata-management companies are required to be licensed through the Real Estate Council [of B.C.],” Fanaken says. “That has changed the way property-management companies conduct their affairs…so this is a good aspect for condo owners. Their monies are far more protected than they ever were before.”
It has also contributed to greater consolidation in the industry. Last year, a Texas-based property-management company, Associa, bought one of the local giants, Baywest Management Corp. And Fanaken says that Florida-based FirstService Residential Management bought his company and Crosby Property Management.
“Those two companies probably account for the largest number of stratas that are managed in the Lower Mainland,” he notes.
However, Fanaken says there has not been a corresponding increase in accountability for the homeowners and tenants elected to serve on strata councils. Residents who feel they’ve been treated unfairly by a strata council usually only have one option: going to court to get a judge to overturn a decision. And that can get very expensive.
“I see so many violations of the act by some council members,” Fanaken says.
He maintains that some councils spend money that’s not authorized in their budgets. Others levy unwarranted penalties on residents in the absence of any due process.
When asked for a solution, he suggests that the Strata Property Act be amended so fines can be levied against council members. “Once somebody gets elected—it doesn’t matter how they got there or what their eligibility is—if they step out of line of what’s required by the act, they should be held to account,” Fanaken declares.
According to Understanding the Condominium Concept, the Strata Property Agents of B.C. estimates that more than $1.5 billion is overseen by strata corporations in the province, including $500 million in contingency reserve funds. Fanaken reports in the book that strata-corporation annual budgets range from $200,000 to $1.5 million, with the average being around $600,000.
“If a management company has 100 clients, that means some $60 million passes through its hands each year,” he writes. “And that is for a mid-size firm.”
In the vast majority of cases, residents serve on strata councils without compensation. That is “truly admirable”, according to Fanaken.
However, he points out in his book that Strata Property Act provisions requiring the disclosure of conflicts of interest are “routinely ignored”.
“On occasion, a good property manager will raise the yellow flag at a council meeting to alert all council members of the requirements; however, their efforts are often met with indifference or even hostility,” he writes.