Coquitlam strata corporation seeks dissolution under Bill 40
By Glen Korstrom
14 February 2017
Owners in a 58-unit condominium development are petitioning the British
Columbia Supreme Court (BCSC) to dissolve their Coquitlam strata
corporation so it can be sold to Anthem Properties Group Ltd. for $32
million even though nine owners oppose the sale.
This is the second time that a strata corporation has petitioned BCSC
to allow it to dissolve since Bill 40 became law on July 29, 2016.
The law reduces to 80% from 100% the threshold needed for a strata
corporation to vote to dissolve. Courts still need to approve any vote
that is not unanimous.
Courts historically could agree to consider winding up a strata
corporation when a vote of owners was not unanimous, but it has been
extremely rare for a court to agree to such a windup.
Business in Vancouver last month reported on the first strata
corporation to make a court application under Bill 40. That case, which
involves the Twelve Oaks property at the corner of West 12th Avenue and
Oak Street, has yet to be heard in court. Its tentative court date has
been set for February 20.
At both Twelve Oaks and the Brandywine property at 585 Austin Road in
Coquitlam, owners in the strata corporations are faced with significant
maintenance and repair costs. Twelve Oaks was built in 1973; Brandywine
was built in phases starting in 1976.
In both cases, an owners' vote was overwhelming but not unanimous in favour of dissolving the strata corporation.
At Twelve Oaks, 93.33% of the owners of 30 strata units voted for the
wind-up; at Brandywine, 84.5% of the owners of 58 strata lots voted to
wind up the strata corporation.
The Brandywine petition stressed that realtors at CBRE shopped around
the development to ensure that the complex attracted the highest bid
possible – something that the courts are expected to consider important
when deciding whether the sale is in the best interest of the owners
who do not want to sell.
“Following an extensive marketing campaign by its real estate broker
and a competitive bidding process that resulted four initial offers and
two further offers, the owners received an offer to purchase their
strata lots that significantly exceeds the market value,” noted the
Brandywine petition, which was filed on February 10.
Anthem first made an offer in December, 2015, and then revised its offer in several agreements in 2016.
Anthem’s final offer allows owners to stay in their homes for six
months rent free so they have time to consider their next move. That is
another thing that the courts are expected to find important when
determining whether the sale is not “significantly unfair” to owners
who do not want to sell.
The petition noted that repairing and maintaining the common property
of a condominium complex is an “essential and fundamental” statutory
obligation of strata corporations under B.C.’s Strata Property Act.
That means that no strata corporation can legally vote against
repairing something essential in a condominium complex, such as an
“A decision not to confirm the 80% vote resolution to wind up the
strata corporation and cancel the strata plan would leave the owners
obligated to incur significant costs to repair and maintain the
Brandywine complex, and it is uncertain as to where the funds to pay
for these significant costs will come from, given the limited funds
currently held in the strata corporation’s bank accounts and the
imminent nature of many of the repairs,” the petition noted.
It added that if the strata corporation were to impose high special
levies against all of the owners to pay for the repairs, some owners
might not be able to pay for those levies and could be forced, via
foreclosure, to sell their homes.