Spotlight on strata governance: Should the Strata Property Act provide default rules of order for general meetings?
8 May 2018
By Kevin Zakreski
BCLI is running a public consultation on governance issues for stratas. It is asking for public input into its proposed changes to the Strata Property Act, Strata Property Regulation, and Schedule of Standard Bylaws. 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 Governance Issues for Stratas. To read other posts in the series please click here.
Brief description of the issue
While the Strata Property Act, Strata Property Regulation, and standard bylaws each contain provisions that deal with selected aspects of meeting procedure, taken together these sources don’t provide a comprehensive set of rules of order for general meetings. The absence of rules of order could be called a gap in the legislation, which may cause uncertainty and needless conflict. Should the Strata Property Act prescribe rules of order for general meetings?
Discussion of options for reform
This issue comes down to a yes-or-no question: should the act prescribe a complete set of rules of order? Or, should it retain the status quo (which sees the act, regulation, and standard bylaws address certain aspects of meeting procedure while leaving some space for strata corporations to adopt their own rules on the subjects that aren’t addressed)?
The main arguments in favour of prescribed rules of order are that it would bring greater certainty and accessibility to this area of the law. As it stands, rules of order appear in a host of different places. A handful are found in the act and the regulation; a few more show up in the standard bylaws. Some strata corporations may have adopted rules of order from a commercially published source, but many likely have not. For these strata corporations, many procedural questions can only be decided by reference to the strata corporation’s customs and past practices and the common law on corporate meetings. These latter two sources are not simple to state and apply. Turning to them may exacerbate disputes in contested general meetings.
Having a complete set of written rules of order in one place may overcome these problems. Having rules of order prescribed by law would reduce the scope for disputes over the content of the rules. It would also make the rules more accessible, particularly for volunteer strata-corporation eligible voters who likely won’t have the time or training to pursue rules in a voluminous body of case law and practical guidebooks. A clearer and more-accessible body of rules of order could also contribute to better decision-making at strata corporation meetings.
Prescribing rules of order may have disadvantages. For one, any gains in certainty about the rules would inevitably come at the expense of the flexibility that is the hallmark of the current system. Currently, strata corporations are free to choose the bulk of their meeting procedures, subject to a few provisions that are set out in the act and the regulation. Moving to a prescribed set of rules of order would mean moving to something more like a one-size-fits-all approach to meeting procedure. Given the diversity of strata corporations in British Columbia, this approach could produce rules that are felt to be too rigid and formal for some strata corporations or procedures that are inconsistent with other strata corporations’ past practices.
Enforcement of prescribed rules of order might also create problems. The courts currently apply something of a light touch in enforcing procedural rules, making them subject to broad goals of ensuring fair and reasonable treatment of meeting participants. This could change if the rules of order were spelled out in legislation or a regulation.
Even if the courts generally kept their current approach to enforcing procedural rules, the existence of a prescribed set of rules of order would, in itself, create a learning curve for strata corporations. General meetings would have to broadly adhere to the standards set by the prescribed rules. Responsibility for achieving this result would be placed in the hands of those who run strata-corporation general meetings.
Finally, any prescribed set of rules of order would likely have to be much longer and more detailed than the current standard bylaws. Commercial publications tend to run to hundreds of pages, a length that is felt to be necessary to address the situations and concerns that may crop up during a general meeting. A prescribed set of rules of order would likely have to match this level of complexity and detail. Otherwise, people would perceive gaps in the prescribed rules and would have to turn to commercial publications or the common law to fill in those gaps.
The other option to consider is retaining the status quo by proposing that the act not prescribe a comprehensive set of rules of order. The Strata Property Act’s current approach to rules of order is consistent with the approach taken by other strata-property and corporate acts. Corporate legislation rarely deals with rules of order, and even corporate bylaws tend not to have provisions dealing with meeting procedures. Legislators and policymakers rarely give reasons for why they aren’t doing something, and this pattern holds true for the absence of rules of order in British Columbia’s strata-property framework. Nevertheless, it is possible to discern a rationale for the status quo: it essentially is the mirror-image position on the dis-advantages listed earlier.
The status quo preserves flexibility for strata corporations to adopt their own rules of procedure. It avoids the need to compile a lengthy, detailed, and complex set of statutory or regulatory provisions on procedural matters. And it also avoids potential enforcement issues.
The disadvantages of the current approach are that it leaves the law in a relatively uncertain and inaccessible state. This places a burden on strata corporations to adopt and apply rules of order. Some strata corporations may turn to commercial sources that aren’t compatible with the Strata Property Act. Others may simply fail to spell out rules of order, which could lead to confusion and protracted disputes over procedure.
The committee’s tentative recommendation for reform
The committee didn’t favour proposing that the act prescribe a comprehensive set of rules of order. In its view, in practice retaining order all comes down to the chair. Most meeting chairs are competent and able to control the meeting. Those who aren’t tend to perceive their weaknesses and turn the chairing duties over to someone with experience, such as the strata manager. Putting in place a set of rigid rules of order would likely cause more problems than it could solve.
The committee was also concerned that establishing a comprehensive set of rules of order could transform complaints about the outcome of votes into disputes over whether meeting procedures were strictly followed.
Despite its skepticism about the need for a prescribed, comprehensive set of rules of order, the committee did note that there are specific areas in which meeting procedures could benefit from legislative reform.
The committee tentatively recommends:
The Strata Property Act should not prescribe a comprehensive set of rules of order for strata-corporation general meetings.