Bill 40 receives royal assent

18 November 2015

By Elizabeth Pinsent

Yesterday, Bill 40 received royal assent from the Legislative Assembly of British Columbia, completing its journey through the legislative process.

Bill 40—or, to use its legislative title, the Natural Gas Development Statutes Amendment Act, 2015, SBC 2015, c 40—is a multifaceted statute that amends a range of natural-resource and housing acts. Its significance for BCLI is that it implements the recommendations made in our 2015 Report on Terminating a Strata (PDF), the first report published in the Strata Property Law Project—Phase Two.

The Strata Property Act amendments are found in sections 37 to 55 of the new act. These amendments achieve two important reforms to the law: (1) they lower the voting threshold required to terminate a strata from unanimity to 80 percent of the strata’s eligible voters and (2) they require a strata to apply to court for an order confirming a resolution to terminate—a requirement that is intended to afford some protection to dissenting owners and registered chargeholders.

The amendments begin by defining this new 80-percent voting threshold, making it clear that it requires 80 percent of all eligible voters, not simply 80 percent of the eligible voters who turn up at a meeting. This new voting threshold applies to a new category of resolution, which the amendments call a “winding-up resolution,” and define as a resolution to cancel a strata plan and become tenants in common (i.e,. to terminate the strata) or to appoint a liquidator for the strata.

A special notice period of at least four weeks’ written notice will apply when a strata wants to consider a winding-up resolution at an annual general meeting or a special general meeting.

If a winding-up resolution is passed by an 80-percent vote, then in most cases the strata will be required to apply to the Supreme Court of British Columbia for an order confirming the decision to terminate. An exception applies for very small stratas. If a strata has fewer than five strata lots, then it will have the option to proceed without the necessity of applying to court. Notice that, for stratas of this size, unanimity will effectively be required to terminate, because one eligible voter will have the power to prevent the strata from reaching the 80-percent voting threshold.

Strata-lot owners and registered chargeholders must receive notice of the application. If any of them opposes termination, they will have the opportunity to make their case to the court.

In considering whether to make the order, the court is directed to consider the following:

  • the best interests of the owners; and
  • the probability and extent, if the winding-up resolution is confirmed or not confirmed, of
    • significant unfairness to one or more
      • owners, or
      • holders of registered charges against land shown on the strata plan or land held in the name of or on behalf of the strata corporation, but not shown on the strata plan, and
    • significant confusion and uncertainty in the affairs of the strata corporation or of the owners.

The amendments leave untouched several aspects of the current termination process, including required filings with the land title office.

Termination is a very significant step in the life of a strata, one that should only be undertaken after receiving legal advice.

The new act comes into force by regulation. There is no publicly available timetable for when such a regulation will appear. Watch this blog for updates.

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