What happens when a majority of strata owners in a multi-unit complex decide they want to sell their units and wind up the strata, but not all property owners support the decision?

This happened earlier this year in Richmond’s Ascott Wynd complex when six of 102 owners disputed the winding up of the strata. They reasoned the sale wouldn’t be in the best interests of the owners and would cause significant confusion and uncertainty in their affairs.

However, BC Supreme Court Justice Milman disagreed, saying the sale was in the best interests of the owners and ruled the complex could be sold.

Why would strata owners decide to sell their complex?

The reasons vary and include:

  • their aging strata complex requires so much repair work, it makes more sense to demolish the building and build a new one in its place;
  • a low-rise strata building is in an area rezoned for higher density developments, and property owners will make a profit selling to a developer who’ll demolish the low-rise building and construct a higher-rise property in its place; and
  • their strata is located within a larger area (a few blocks) undergoing redevelopment as part of a broader urban renewal project.

New strata rules make winding up a strata easier

In 2016, new strata property rules came into force allowing strata owners to terminate a strata corporation with an 80 per cent vote. This was a change from the previous unanimous voting requirement.

Although a resolution to cancel a strata plan can be passed by an 80 per cent vote, there’s court oversight intended to address unfairness alleged by an owner or creditor.

The strata corporation is required to apply to BC Supreme Court for an order confirming a wind-up resolution. The court must consider:

  • the best interests of the owners;
  • the probability and extent of significant unfairness to one or more owners; and
  • the probability and extent of significant confusion and uncertainty.

Recent court cases

  • In 2017, six condominium owners in the Hampstead, a Vancouver West End strata complex, went to court to stop their 33-unit strata building from being sold by a majority of owners for redevelopment. They lost their case. The judge agreed the wind-up resolution had been conducted fairly, in the best interests of all strata owners.
  • In 2018, two owners in the 36-unit Barclay Terrace in Vancouver’s West End refused to sell. The judge allowed the sale stating it was in the best interests of the owners and wouldn’t give rise to significant uncertainty.

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