Indemnification Agreements, or User Fee bylaws?

Stratas are not relieved of their responsibilities under the SPA by Indemnification Agreements, however, assumptions of liability can seriously interfere with sales when prudent purchasers look elsewhere. 

Indemnification bylaws are unenforceable to the extent that they contravene the SPA. This is particularly true in regard to the strata's responsibilities for common property and insurance coverage. 

This strata's past history has also proven that when it comes to major expenses such agreements are not worth the paper they're written on due to loss, confused responsibilities, and enforcement, administration, or litigation issues. 

Provisions to fund alterations effectively without confusing responsibilities are made in s.6.9 of the Strata Property Regulation. That section prescribes the terms for User Fee bylaws. Unlike Indemnification Agreements, User Fee bylaws are a statutory provision of the governing enactment.

User fees can be imposed to reasonably cover expenses for improvements, repairs, and altered use or appearance of common property, as well as contingency funds for removal and restoration. They can take the form of a lump sum, monthly payments, or a combination of both.

User fees are legally sound and easy to administer, so they are less likely to churn up litigation or charges for add-on management fees. Unfortunately that does not make them popular with strata lawyers or property managers acting for profit. 

Council members taking common property for decades without paying a dime for it also quietly ignore the existence of user fees while continually contravening the short term exclusive use provisions in s.76 of the SPA. When selling, they also advertise common property as if it were their own. Without ever paying a dime extra for it. 

This is big money. The land in this 5.5 acre site is worth more than 5 times the value of the buildings, and it is owned and paid for, as well as maintained and taxed in proportion to unit entitlement. Council members take it at the expense of others for their own exclusive use and employ Indemnification Agreements as a distraction to avoid paying user fees, contrary to the best interests of the strata.  For decades. 

At the same time they unlawfully diverted surplus special levy funds from building envelope repairs to build extra decks and panormatic views for themselves, and then they issued new special levies to make up the funding that user fees would have properly provided.

Indemnification agreements are a mirage for the unjust enrichment of a minority at the expense of others. The true costs are paid by special levies.

 

In my opinion User Fee bylaws are in the best interests of stratas. They shouldn't be such a secret, but contrary to s.35 disclosure requirents, the minutes are scrubbed to omit all the decisions to ignore requests that I made for decades, while everything carries on as usual.