BC Supreme Approves Strata Wind Up Despite Owner Opposition

For the first time since Strata Property Act changes took effect in 2016, the BC Supreme Court approved the termination of a strata by a majority vote.
Categories: Business Insurance
Jan 24th, 2018 | By: CapriCMW

Changes to the Strata Property Act (SPA) that took effect in 2016 now allow strata corporations to be terminated with an 80% majority vote by its owners. Previously, stratas required a unanimous vote. The process for winding up and canceling the strata plan still includes a number of approvals and strict adherence to the requirements of the legislation. If any owners are opposed to the termination, the matter goes to court. Recently, the BC Supreme Court approved the wind-up of a strata for the first time under the new SPA provisions, despite strong resistance and court challenges from some owners.

The building in this case had undergone some major repairs in recent years requiring special levies and more were anticipated. The strata council began looking at the prospect of selling the building to a developer, in lieu of continuing to pay these mounting repair and maintenance costs. There were multiple offers and the council entered into an agreement to sell for $45.25 million, 2.5 times the assessed value. The council called a Special General Meeting and a vote ensued resulting in just over 80% of the owners in favour of  winding up the strata and selling the building. 

The strata council filed a petition for court approval. In court, opposing owners attempted to make a number of arguments against the sale. They argued that they felt intimidated by owners looking to sell, that they purchased their units prior to SPA changes with the expectation they could live in their homes as long as they wanted, that the strata council had breached their "duty of good faith" and that the law firm hired by the council acted in a conflict of interest. 

The strata council, on the other hand, provided evidence of similar properties in the neighbourhood for sale at either comparable or below the sale price in their agreement. This helped show that with the proceeds from the sale, owners could still afford to purchase another home in the community and would not be forced out of the neighbourhood. The court approved the sale largely based on this evidence. 

The various hurdles in the details of this case how that despite the amendments to the SPA, winding up a strata corporation is still a long and complicated process. There are a number of ways where a sale could be delayed. It is important that qualified legal counsel is retained early on to avoid the complications and prepare for opposition.

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