Listing Your Strata Complex For Sale: Do You Need 80% Approval?

On February 28, 2016, the BC government changed the Strata Property Act to remove the requirement for a UNANIMOUS vote of the strata members to dissolve a strata corporation.

That threshold was reduced to 80% of all of the strata owners.

This was done ostensibly, to allow the majority of owners to dissolve their strata when repair or upgrade costs became prohibitive due to the age of the building.

Since then, a number of cases have gone to the BC Supreme Court dealing with the procedure of winding up a strata corporation.

In almost all of the cases, once an 80% majority vote was reached, the court upheld the dissolution process and the building was sold over the objections of the 20% minority.

In the recent case of Dubas v. The Owners of Strata Plan VR 92 (2019 BCCA 196), the appellant, being one of a group of dissenting strata owners opposed having their strata complex sold or dissolved, raised a number of legal and procedural arguments to have the strata listing cancelled -including the argument that 80% of the owners should have to agree to list a strata complex for sale.

In this case, a majority of the owners wanted to list the complex for sale, but not the 80% “super majority” referred to in s.272 of the Strata Property Act.

The BC Supreme Court held against Dubas, so he appealed to the BC Court of Appeal who dismissed his appeal with costs, confirming that:

• Only a simple majority resolution of the owners is required to list the strata complex for sale, provided that the sale is ultimately subject to the approval of 80% of the owners.

The appellant raised a number of legal and procedural arguments, but the appeal court rejected them all, coming to the conclusion that:

“[34] On the other hand, the solicitation of offers pursuant to a listing would place the owners in a better position to judge the benefits of any winding up that might later be proposed. It would thus be both counterproductive and “overly interventionist,” to borrow a phrase from the chambers judge, to impose a heightened voting requirement at this preliminary stage of the winding-up process.”

The marketing older 3-4 story wood frame buildings in high density areas such as Vancouver’s West End has noticeably decreased due to the general, government-precipitated slow-down of the real estate market. That, however, is likely a short term phenomenon, as the Lower Mainland continues to have high net migration and remains a desirable final destination for many people in Canada and the rest of the world.

THE MORAL OF THE STORY

As we suggested in a previous blog, strata owners in buildings that are potential candidates for dissolution should discuss the matter and form a plan BEFORE a realtor or developer comes knocking (and starts picking off the units one at a time).

If you have questions about winding up your strata complex, call us anytime.

©Pazder Law Corporation (2020)

1410 – 800 W. Pender St. Vancouver, BC, V6C 2V6 Tel: 604 682-1509 Fax: 604-682-3196 plc@pazderlaw.com www.pazderlaw.com

Questions? Call Kenneth Pazder or Melissa Valana (604-682-1509) at Pazder Law Corporation anytime for a free consultation.

Disclaimer: The foregoing is NOT legal advice and is presented for information purposes only. Statutory and case law can change over time, so before acting, always obtain experienced legal, tax or other relevant professional advice.