Spotlight on types: Should the Strata Property Act require a strata corporation that wishes to create types of strata lots to obtain approval of this decision at a general meeting by adoption of resolutions passed by 3/4 votes of both eligible voters in the type and all eligible voters in the strata corporation?
October 21, 2016
BY Kevin Zakreski
BCLI is running a public consultation on complex stratas. It is asking for public input into proposed changes to the law governing sections, types, and phases. For information on how to participate in the consultation please visit the Strata Property Law Project—Phase Two webpage.
This post is part of a series that spotlights issues on sections, types, and phases discussed in the Consultation Paper on Complex Stratas. To read other posts in the series please click here.
Brief description of the issue
The only rules that appear to bind a strata corporation in creating types are the general rules for creating or amending bylaws. This means that types may be created without the express consent of owners of strata lots within the type. Should the act contain a mechanism that would allow them to vote independently on the creation of a type?
Discussion of options for reform
There are a number of ways to structure rules that would give types owners a greater say in the creation of types. The committee focussed on proposals that would draw on the existing provisions governing creation of sections.
The advantage of this proposal is that it would set out a clear procedure for the creation of types. The proposal draws on a familiar procedure for creating sections. Finally, it would add a measure of protection for the strata-lot owners in the proposed type.
But the proposal may come at the cost of increased time and administrative complexity. An additional vote, among the eligible voters in the type, would have to be organized. Conflicts could result, for example, if the broader strata corporation favoured creating types but the type owners resisted. This could be seen to undermine one of the identified purposes of types, which is to protect owners generally from expenses that only benefit the owners of a certain type of strata lot.
The committee’s tentative recommendations for reform
The committee decided that the legislation should clearly spell out the procedure for a strata corporation that wants to create types. The committee favours harmonizing that procedure with the existing procedure for a strata corporation creating sections.
The committee tentatively recommends:
The Strata Property Act should require, for a strata corporation to create a type of strata lot: (a) the strata corporation must hold an annual or special general meeting to consider the creation of the type; (b) the notice of meeting must include a resolution to amend the bylaws to provide for the creation of each type; and (c) the resolution referred to in (b) must be passed (i) by a 3/4 vote by the eligible voters of the strata lots comprising the type identified in the bylaw, and (ii) by a 3/4 vote by all the eligible voters in the strata corporation.
The committee also favours adopting a rule requiring resolutions to be passed by a 3/4 vote in all cases, to parallel its similar proposal for sections.
The committee tentatively recommends:
The vote authorizing the creation, amendment, or cancellation of a type should require a resolution passed by a 3/4 vote in all cases, despite the provisions of section 128 (1) (b) and (c), which allow amendments to a bylaw to be approved by a resolution passed by a voting threshold other than a 3/4 vote in the case of a strata plan composed entirely of nonresidential strata lots or in the case of a strata plan composed of both residential and nonresidential strata lots.
Finally, the committee favours ensuring that amendments to bylaws creating types must also be passed by 3/4 votes of the broader strata corporation and the eligible voters of strata lots in the type.
The committee tentatively recommends:
If a strata corporation allocates expenses by types, then amendments to the strata corporation’s bylaws concerning the allocation of an expense to a type must be approved at an annual general meeting or a special general meeting by both a resolution passed by a 3/4 vote of the strata corporation and a resolution passed by a 3/4 vote of the type.
