Are Your User Fees Reasonable?
Under the Strata Property Act, a bylaw or rule may impose a user fee for the use of common property, but only if the fee is reasonable. How do we determine if a user fee is reasonable? In Strata Plan LMS 3883 v. De Vuyst, the Supreme Court of British Columbia effectively confirmed that a user fee is reasonable if it is objectively reasonable, meaning reasonable on objective grounds. In De Vuyst, the strata corporation’s bylaw provided for a $200 move-in / move-out fee. An owner commenced an arbitration to challenge the bylaw, arguing that the $200 fee was unreasonable. The evidence revealed that when strata council set the move-in / move-out fee, it did not identify the actual cost to the strata corporation of a move in or out. Nor did council assign a value for wear and tear on the building. At the arbitration hearing, the owner compared the $200 fee against the strata corporation’s actual costs when someone moved in or out. The owner also testified about a number of comparable buildings that charged less. Given the evidence, there were not objective grounds to justify the strata corporation’s $200 fee. The user fee was unreasonable and the strata corporation could not enforce it against the owner. When establishing a user fee, a strata corporation must be able to justify the fee on the basis of one or more grounds, each of which must itself be reasonable. For example, it is not sufficient for strata council to set a user fee on the basis that council members feel the amount is fair. Instead, strata council must be able to point to one or more independently verifiable reasons that justify the fee, and each reason given should itself be a reasonable consideration. The strata council might, for instance, base the user fee on the cost to the strata corporation to provide the service in question.
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