09/20/2018 – Jurisdiction British Columbia
Part 64 published on 12/01/2018
Strata fees were not retroactive and had been validly assessed
The strata corporation had levied strata fees, for the fiscal year beginning July 1, 2017, with increased payments commencing in October 2017 based on a budget approved at the AGM held in August 2017. The notice of the new fees also levied a lump sum adjustment “representing the difference between what had been paid for the months of July, August and September 2017 and what would have been paid for those months had the 2017 Budget been approved prior to July 1”.
Some of the owners alleged that this was “retroactive assessment of strata fees” which they said was not permitted by the Strata Property Act.
The Court held that the strata corporation’s budgeting and assessment of strata fees was proper (and was not retroactive). The Court said:
There is no requirement in the Act that strata fees be paid in equal installments. Plainly, the schedule of strata fee payments can require equal monthly installments, or installments that include adjustments to make up a deficit between what was paid and what would have been paid had the budget for the current fiscal year been in place at the commencement of the current fiscal year. Fees for one month may be different than for other months.
The Strata could easily have included the adjustments as part of the fee schedule included in the 2017 Budget materials which were sent to the strata owners and approved at the AGM. Instead, it merely set out in the materials a schedule showing what each strata unit’s monthly fees under the 2017 Budget would be, based upon the unit entitlement. Alternatively, the Strata could have convened a meeting to approve a special resolution imposing a special levy for the adjustment: Act s. 108.
Instead, the Strata simply sent the petitioners (and the other owners) an invoice which included the adjustment in question. The strata fees that were invoiced were precisely those that had been approved at the AGM. Because the Strata’s invoices for the months of July, August and September 2017 were based upon the previous fiscal year’s fees, the October 2017 invoice simply included the deficit that had not been invoiced for those earlier months. The Strata could not have invoiced for the deficit any earlier than it did because the new fees had not been approved until the AGM. The deficit only became due and payable after the AGM as a result of the 2017 Budget being approved.
In my view, a full answer to the petitioners’ argument is this: the 2017 Budget did not establish a new fee schedule for only the period after the AGM – it established a new fee schedule for the entire fiscal year, commencing July 1, 2017. The October 2017 invoices did nothing more than require payment of the fees that were approved by the owners.