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Author Archives / Scott Smythe

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B.C. Government Shines a Light on Shadow-Flippers with New Regulations

Posted in Policy

Shadow-flipping has been the subject of intense media attention over the past few months, and there has been increasing pressure on the B.C. government to address the issue.  The government responded on May 9, 2016 by unveiling new regulations aimed at combatting the practice.  The regulations, issued pursuant to the Real Estate Services Act, come into effect today.

What is shadow-flipping?

Shadow-flipping a property involves the assignment of a purchase contract by a purchaser to a third party for a fee, often on multiple occasions and for increasingly higher fees.  There is, of course, nothing wrong with entering into … Continue Reading

Developers: are you meeting your FINTRAC Obligations?

Posted in Commercial, Residential

In recent weeks, news headlines revealed that the Vancouver real estate sector is currently the focus of a Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) anti-money laundering audit that has already been underway for several months. According to reports, the increased scrutiny is justified by FINTRAC risk analyses indicating that the real estate sector has a relatively high risk of money laundering when compared to other sectors that are subject to the federal government’s anti-money laundering legislation. This has raised compliance concerns and questions from real estate developers.… Continue Reading

Can a Developer Limit its Liability for Construction Defects?

Posted in Construction, Litigation

Lawyers representing strata lot purchasers in British Columbia have, to date, made considerable hay by emphasizing that the Real Estate Development Marketing Act (British Columbia) is “consumer protection” legislation to be interpreted in favour of purchasers. The bias in favour of the consumer has arguably lost some of its lustre in the past year or so (see, for example, the decision in Woo v. Onni, discussed here), but there is still concern that, when in doubt, the courts will invoke the consumer protection nature of the legislation to justify a decision in favour of the proverbial “little guy”, … Continue Reading

Waste Coast: Vancouver’s New Organics Disposal Ban

Posted in Residential

On January 1, 2015, the City of Vancouver (the “City”) enacted a series of amendments to the Solid Waste By-law (No. 8417), which are intended to divert organic, biodegradable waste from the City’s landfills. The City’s approach mirrors that taken by a number of other Canadian municipalities (including Victoria, Nanaimo, Toronto, and Hamilton), as well as the provinces of Nova Scotia and Prince Edward Island.

The amended bylaw requires all food waste to be disposed of via its own waste removal stream, separate from those for garbage and recyclable materials. While the collection services for single-unit residences and duplexes will … Continue Reading

BC Court of Appeal Affirms Distressing Decision

Posted in Municipal

On December 30, 2013, we wrote about the BC Supreme Court’s decision in Delane Industry Co. Ltd. v. PCI Properties Corp., 2013 BCSC 1397, where the Court held that a landlord’s termination of a commercial lease was ineffective because the landlord, having issued a demand letter while the distress process was underway, subsequently purported to terminate the lease after the distress failed to yield sufficient proceeds to cover the rent in arrears.  To validly terminate the lease following distress, the landlord needed to issue a fresh demand letter (specifying the amount of rent still in arrears) and allow the … Continue Reading

What a Relief! BC Court of Appeal decides that equitable relief from forfeiture not available to residential tenants

Posted in Municipal

A commercial tenant may apply to court for relief from forfeiture when faced with the termination of its lease by a landlord, but can a residential tenant also seek such relief?  That question was recently answered by a 5 member panel of the British Columbia Court of Appeal in Ganitano v. Metro Vancouver Housing Corporation, 2014 BCCA 10.

In Ganitano, a residential tenant had leased the same townhome for 28 years but had repeatedly failed to pay rent when due.  The landlord eventually terminated the tenancy by following the procedure set out in the Residential Tenancy ActContinue Reading

REDMA Revisited

Posted in Municipal

For at least 10 years prior to the market correction in 2008, strata lot prices in British Columbia were on a decidedly upward trend and, not surprisingly, the market attracted not just homebuyers, but also speculators who signed purchase agreements with a view to making a profit by either assigning their contracts or selling their strata lots.  In the wake of the correction, litigation under the Real Estate Development Marketing Act (British Columbia) (REDMA) proliferated as homebuyers and speculators alike, faced with the realization that they had agreed to pay more than current market value, sought to avoid … Continue Reading

Distressing Decision for Landlords

Posted in Commercial, Litigation

Landlords that exercise the remedy of distress rarely recover sufficient funds to satisfy the arrears of rent owing by the tenant.  A recent decision of the BC Supreme Court held that, in such a case, a landlord cannot immediately terminate the lease without first giving the tenant any required written notice of default and allowing the applicable cure period to expire.

In Delane Industry Co. Ltd. v. PCI Properties Corp., 2013 BCSC 1397, the tenant fell into arrears and, after giving a written demand letter specifying the amount owing and providing a five day cure period as required by … Continue Reading

Managing Management Fees

Posted in Commercial

Landlords hold their management fees dear, and need to ensure they are fully recoverable.  Offers to lease routinely provide that the tenant will pay a management fee equal to a fixed percentage (say 5%) of the “Basic Rent” payable by the tenant.  Despite this clear contractual arrangement, landlords occasionally (and inadvertently) shortchange themselves when preparing the final form of lease.

Consider an offer to lease for a multi-tenant building.  The offer says that the lease will be a “net” lease and that the tenant will pay its “Proportionate Share” of “Operating Costs”.  The offer also says that the tenant will … Continue Reading