Part 37 published on 01/02/12
Strata fees payable from date of deposit of phase plan
The strata plan had been developed in three phases. A dispute arose between the strata corporation and the developer respecting payment of strata fees in relation to the second and third phases. The developer took the position that the strata fees were not owing for the period from the deposit of the phase plan until the date of the first sale of a lot in the phase. The strata corporation took the position that the strata fees were owing from the date of deposit of the phase plan (for phases two and three). The Court agreed with the strata corporation. The Court said:
The end result is an interim budget for the first phase after sale of the first lot. It will have the expenses estimated for that phase and it may have estimates for the yet to be created phases. In addition to the estimated operating expenses, it will set the required lump-sum contribution to the contingency reserve fund on the part of the owner-developer. The members of the strata are required to contribute monthly to the operating fund and the contingency reserve fund according to their unit entitlements. When the next phase is deposited, the owner-developer must prepare another interim budget dealing with the same matters, except the estimates will be different in that they will be for all phases of the development deposited to that point. If the second or any subsequent phase is deposited after the strata corporation has held its first annual general meeting, the (Strata Property Act) attempts to respect the budget adopted at the annual general meeting by requiring that the new interim budget, which the owner/developer must prepare, be based on the budget adopted at that annual general meeting.
The parties had also entered into a settlement agreement, but the Court held that the agreement was not lawful or binding because it derogated from the strata fee contribution formula set out in Section 99 of the Strata Property Act (without the required unanimous approval, for an alternative formula, having been obtained pursuant to Section 100 of the Act).