In some circumstances, a strata corporation may make the decision to dissolve itself. Half a year ago, the government passed a new law allowing strata corporations to terminate with less than a unanimous vote. Although no longer new, the law is still relatively unknown, but its importance cannot be discounted for strata corporations that wish to terminate.
New approval threshold
The new law, which came into effect on July 28, 2016, has lessened the number of votes required by a strata corporation in order to terminate. Instead of needing to successfully obtain unanimous approval by registered owners, a corporation may now terminate with a favourable vote by only 80 per cent of owners.
Why the change?
The new rule was made after the British Columbia Law Institute recommended changing the Strata Property Act to reduce the number of votes needed for dissolution. This follows other jurisdictions, such as Ontario and Alberta, which don’t require a unanimous vote.
The change was designed to help older strata corporations that require continuous renovations and repairs. Some corporations are no longer able to carry the expense and may decide to terminate in the best interests of strata lot owners. The new law allows the corporation to dissolve itself and sell the land for redevelopment, even if registered owners are against dissolution.
The new law also stipulates that registered charge holders and minority dissenting owners must be treated fairly during the process. Otherwise, the dissolution may not be valid.
To start a dissolution process, the corporation is required to provide all registered owners with four weeks’ notice of a general meeting. If the general meeting is called by petition, then the notice requirement increases to eight weeks.
As dissolving a strata corporation involves complex legal matters, strata corporations contemplating a wind up do well to consult with a lawyer experienced in strata issues.