Part 5 published on 01/02/04
Change to allocation of common expenses.
The Strata Corporation contained 265 Strata lots, namely, 190 retail and office units, 73 parking units, and 2 units devoted to signage.
Until 2002, the strata fees were allocated as follows. They were first divided between the different “sections” or types of units, and then were shared within each section based upon the unit shares. In 2002, this budgeting arrangement was changed. In particular, the strata council concluded that it was not appropriate to divide the expenses between the different sections, since all types of units benefited – to one degree or another – from all of the different expenditures. Therefore, the strata council decided that all of the expenses would be shared by all units in accordance with their strata lot shares.
This change was passed by a majority vote at the Annual General Meeting. It was not passed unanimously.
Certain owners then challenged the change.
The Court said that this change was consistent with the Strata Property Act and the by-laws of the strata corporation. Although not all strata lots would benefit equally from a given expenditure, all the strata lots did benefit to a certain extent and the extent of the benefit was not considered “determinative”. The Court did not feel that the change “was significantly unfair”. In order for the Court to make such a finding, the actions complained of would have to be said to be “oppressive”, or “harsh”, or “wrongful” or “lacking in probity or fair dealing”, or “done in bad faith” or “conduct which is unjust or inequitable”. The Court said: “The fact that some other method, based on a good faith rational, may have been used to attempt to define with greater precision the degree to which a particular unit benefits from an expense does not amount to conduct which is ‘significantly unfair’”.