With the passage of Bill 40, the Strata Property Act was amended to allow strata owners to windup a strata corporation with an 80% vote and court approval. This is a significant change from prior legislation, which required a unanimous vote of all registered strata owners before the strata could be would up.
The amendments to the Strata Property Act are welcome relief for older strata corporations facing significant repair bills. It is also a welcome opportunity for commercial realtors and developers who have been eyeing older condominium developments for years. Through densification these older condo projects can be redeveloped at a substantial profit.
As a result, many owners and strata managers at older strata developments find themselves fielding inquiries commercial realtors and real estate developers. The suitors come to council meetings or owner information meetings armed with detailed presentations on market potential. It all sounds very enticing and, if the price is right, few strata councils can resist the temptation to test the waters with a solicitation to real estate developers.
But the devil is in the details and there are many ways in which a qualified strata lawyer can help.
Every strata corporation considering a windup should obtain independent legal advice on the transactions before signing on with a commercial realtor, or signing a letter of intent or contract of purchase and sale with a developer. A qualified strata lawyer can also advise the strata on the best options for obtaining an 80% vote and ultimately securing a court approval of the windup.
Every strata lot owner should also obtain independent legal advice on the transaction. After all, it is the owners’ property that is being sold off through the windup process. A strata lot owner will have many questions about the strata windup process. A qualified strata lawyer can bring peace of mind to owners navigating what is likely to be the most complex legal transaction an strata lot owner will ever be involved in.
Qualified independent legal advice is especially important for owners who oppose the windup. Even if the windup is supported by 80% of the voters, the court must still confirm the vote. A qualified strata lawyer can help you assess your options, strategy and chances for opposing the order.
The lawyers at Lesperance Mendes have been advising and representing strata owners and strata corporations in dealings with developers since 1997. When it comes to strata law, we act for owners and strata corporations only. We do not represent or act for developers. We have made our reputation using the Strata Property Act for what it is: consumer protection legislation. And our focus is on protecting the interests of our clients.
If your strata is looking at a possible windup and you are in need of qualified legal advice concerning the windup process, contact Paul G. Mendes, partner at 604-685-4894 or email him at pgm@lmlaw.ca.