The BC Legislature Takes a Crack at Solving the Problem of Aging Strata Properties

On October 8, 2015, the BC Legislative Assembly introduced a Bill that could significantly expedite the redevelopment of aging strata properties in the Province. Bill-40 includes proposed amendments to a variety of statutes, including the Residential Tenancy Act, the Petroleum and Natural Gas Act, and the Oil and Gas Activities Act.  For developers, strata lot owners and strata corporations, however, the most significant aspect of the Bill concerns the Strata Property Act, and the voting threshold that must be met in in order to dissolve a strata corporation.

As the law stands now, terminating a strata corporation is difficult, requiring either a unanimous vote or a court order. The unanimity requirement allows individual owners to prevent a sale of the building and land even when a majority of the strata lot owners wish to sell the strata development to a developer or redevelop the land.pic

As background, Bill-40 was developed in response to a report published by the BC Law Institute, which recommended changing the procedure for terminating a strata corporation. The report noted that habitable land in the Lower Mainland is becoming scarce, and public policies are increasingly favouring densification.  As such, the report urged the government to make amendments that would facilitate the dissolution of strata corporations, in order to give way to more efficient uses of land that have the potential to be rezoned and redeveloped.

If passed, Bill-40 would make dissolving a strata corporation easier by eliminating the requirement for a unanimous vote and replacing it with an 80% voting threshold.

As much as the Bill facilitates the dissolution of strata corporations, it also introduces various safeguards for owners and other interested parties. Firstly, if a strata corporation decides to call a meeting to vote on winding up, the corporation must give all owners at least 8 weeks’ notice of the meeting.  Secondly, owners who have assigned their voting rights to mortgagees retain their right to vote on a dissolution resolution. Lastly, after having passed a dissolution resolution, the strata corporation must apply to the BC Supreme Court to have the resolution confirmed.  At this point, the strata corporation must deliver notice to all interested parties, who are then entitled to be heard by the Court.  If the Court determines that the order is not in the collective best interests of the owners, or that it would be unfair to a minority of owners or charge holders, it can refuse to confirm the resolution.

As of October 8, 2015, Bill-40 underwent first reading and, as such, has yet to be scrutinized by any committees. We will be keeping a close eye on Bill-40 as the amendments to the Strata Property Act could have a significant impact on strata lot owners and strata corporations, and make residential land available for redevelopment by developers. Developers should take note of aging strata developments, stratas with a damaged building or a building that requires extensive repairs, or stratas sitting atop land that has appreciated greatly in value.  Developers may even now be able to persuade stratas located in key redevelopment zones to sell their building.

BC Legislative Assembly Bill-40 legislative Oil and Gas Activities Act Petroleum and Natural Gas Act Residential Tenancy Act strata corporation strata properties Strata Property Act



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