The British Columbia government recently introduced a bill that will, if passed, make it easier to cancel a strata plan and wind up a strata corporation under the Strata Property Act (Act). Currently, a unanimous resolution is required for the owners to cancel a strata plan and collectively become tenants in common of the strata lands or to appoint a liquidator to wind up the strata corporation and dispose of its assets. If passed, the bill will lower that threshold to a resolution passed by an 80 per cent vote.
For strata plans with five or more strata lots, the proposed amendments will require the strata to obtain an order from the Supreme Court of British Columbia confirming the owners’ resolution. In deciding whether to make such an order, the court will be required to consider, amongst other things, the best interests of the owners and the probability and extent of significant unfairness to one or more owners or holders of registered charges. These considerations expand upon the factors the court is currently required by the Act to consider when deciding whether to make an order overriding a requirement for a unanimous vote generally.
The bill does not otherwise make any significant changes to the existing cancellation and wind up procedures. The result of passing a resolution either cancelling the strata plan or appointing a liquidator to wind up the strata corporation will continue to be that the owners will either collectively own the strata lands as tenants in common or will share in the proceeds of a sale of the lands and assets of the strata.
The proposed changes to the Act will undoubtedly be of great interest to strata owners and developers. For owners, the amendments will provide an alternative to making substantial and costly repairs to strata buildings approaching their end of life by making it easier to terminate the strata and sell the lands as a potential redevelopment site. The proposed changes will also provide strata owners with an opportunity to realize a significant gain on their investments, depending on the value of the underlying land and its redevelopment potential. For developers, these changes will create a potential new supply of land for redevelopment.
The full text of Bill 40 – 2015: Natural Gas Development Statutes Amendment Act, 2015 is available on the Legislative Assembly of British Columbia’s website.