B.C. government amendment could soon make it easier to dissolve strata corporations
The executive director of the Condominium Home Owners’ Association of B.C. tells the story of a bunch of people who bought into an apartment building in Metro Vancouver six months ago.
They paid $375,000 per condo unit, and now, according to Tony Gioventu, a developer has come along, wanting to purchase the entire building, tear it down, and construct a bigger one. The offer to each owner, Gioventu related, is $525,000. For the new buyers, it’s a quick $150,000 profit. It’s likely more for older owners.
The building is more than 35 years old, and has over 75 units. According to Gioventu, the owners are now talking about taking the money, and liquidating the strata corporation.
Gioventu said that there are other potential deals and actual negotiations going on across the Lower Mainland, in which owners are looking at getting between 50 percent and 100 percent more than their assessed values.
“It’s not like they’re cashing out dollar for dollar,” Gioventu told the Georgia Straight in a phone interview. “The strata owners are actually looking at substantially higher rates of return.”
The CHOABC executive told this story when asked about the context of legislation introduced on October 8 by the B.C. Liberal government to change the Strata Property Act.
An amendment proposed in Bill 40 seeks to make it easier to dissolve strata corporations through the lower threshold of an 80-percent vote by owners. At present, unanimous approval is required to terminate a strata corporation.
According to Gioventu, it is virtually impossible for many strata corporations to liquidate themselves, because of a “very small minority who could hold out” either by voting against or by just not showing up.
The proposed legislation also provides that strata corporations with at least five units must apply to the B.C. Supreme Court for an order confirming a resolution to terminate the corporation. The court has to consider whether the dissolution is in the “best interests of owners” and does not cause “significant unfairness to one or more owners”.