10/15/2018 – Jurisdiction British Columbia
Part 64 published on 12/01/2018
Strata fees based on unit entitlements significantly unfair to petitioner
In this 26-unit hotel strata property, there are 207 strata lots associated with the hotel, 9 commercial strata lots and 12 strata lots associated with the parkade (the Parkade Units). The petitioner owned the Parkade Units and claimed that the division of strata fees, based on unit entitlements, was significantly unfair to the petitioner. The parties had previously acknowledged the unfairness and had attempted to have the owners pass a unanimous resolution to change the sharing of strata fees. However, the strata corporation was not able to obtain the necessary unanimous approval to pass the resolution.
The Court held that the division of strata fees was significantly unfair. The Court said:
The thrust of the respondent’s argument is that in the circumstances of this case, absent a unanimous vote pursuant to s. 100 of the SPA, the strata fees must be based on unit entitlement pursuant to s. 99, and as a result of the strata corporation following the statutory requirements, King Day cannot rely on s. 164 to argue that the results are significantly unfair.
However, as King Day argues, it is impossible to achieve a unanimous vote when strata council is controlled by Retirement Concepts. And as Retirement Concepts in its own written argument notes, at the January 5, 2016 annual general meeting, King Day objected to departing from its 18% contribution to the operating budget, but “with a substantial number of votes now being held by representatives of Retirement Concepts, the 2016 operating budget was approved to reflect the use of the unit entitlement formula”.
The Court ordered that the owners’ resolution (which had failed to pass) be “deemed to have passed unanimously” and that strata fees be levied accordingly.
Editorial Note: It seems to me that the Court’s real concern here was that the controlling owner – Retirement Concepts – was not willing to support the proposed owners’ resolution (which would achieve fairness).