Spotlight on common property, land titles, and fundamental changes for stratas: Should the Strata Property Act require a resolution passed by an 80-percent vote to approve an amalgamation agreement?
February 12, 2019
BY Kevin Zakreski
BCLI is running a public consultation (closing date: 28 February 2019) on common property, land titles, and fundamental changes for stratas. It is asking for public input into its proposed changes to the Strata Property Act and Strata Property Regulation. 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 discussed in the Consultation Paper on Common Property, Land Titles, and Fundamental Changes for Stratas. To read other posts in the series please click here.
Brief description of the issue
This issue is a departure from the other issues considered in the consultation paper’s chapter on fundamental changes. In every other issue dealing with voting threshold, the legislation requires a resolution passed by a unanimous vote, which is its highest voting threshold. In this case, the Strata Property Act requires a resolution passed by a 3/4 vote to approve an amalgamation agreement. So the question here is should the act be amended to raise this voting threshold to an 80-percent vote?
Discussion of options for reform
The main reason for proposing this reform would be to create some consistency with other fundamental changes involving strata corporations. Consistency would bring several subsidiary benefits, such as making the statute simpler and more accessible.
Another rationale for raising the voting threshold would be that a higher threshold would provide more protection for minority interests. Amalgamation is a significant change for a strata corporation, one that could affect the property rights of strata-lot owners. Allowing it to be approved by a resolution passed by a 3/4 vote creates the possibility of an amalgamation going ahead with the support of a relatively small group of owners, since the 3/4-vote threshold need only be reached by “the votes cast by eligible voters who are present in person or by proxy at the time the vote is taken and who have not abstained from voting.” A higher voting threshold would also be in line with the approach taken in most other Canadian jurisdictions.
But the problem with raising the voting threshold for protective reasons is that it isn’t clear that anyone is actually being harmed by the current, lower threshold. There have been no published complaints about it. The current threshold would also allow for greater flexibility in planning for amalgamation and a more streamlined process of approval.
The committee’s tentative recommendation for reform
The committee noted that amalgamation is rarely encountered in strata-property practice. When it occurs, it tends to be a response to a highly unusual set of circumstances. The committee is unaware of any problems or abuses flowing from the relatively low voting threshold required to approve an amalgamation agreement. In the absence of real-world problems, the committee is reluctant to propose raising this voting threshold.
The committee tentatively recommends:
The Strata Property Act should continue to require a resolution passed by a 3/4 vote to approve an amalgamation agreement.