Strata Corporation — Suit by Some Owners Against Strata Council Members Personally; Strata Corporation — Unequal Habitable Areas but Equal Payment of Common Expenses Not Significantly Unfair #400
By Gerry Neely
A strata corporation may sue one or more owners as representative of all owners, except those who are being sued, on a matter affecting the common property. It may also sue on behalf of one or more owners about matters affecting their strata lots. In either event, approval by a three-quarters’ majority vote of owners is required.
However, what happens when some owners, unhappy with a strata council’s decision, want to sue, but can’t get the support of the other owners? Do they have the right to sue for damages to their interest in the common property without involving the strata corporation as plaintiff, and without the approval of the other owners? These questions came before a Supreme Court of BC judge in a suit brought by a group of owners against the strata council members personally for the actions they took to remedy leaky condo problems.
The group claimed the strata council had negligently hired unlicensed and unqualified tradespeople to repair the common property. This resulted in defective work that ultimately required renovations to the entire building envelope at a cost in excess of $800,000. The judge ruled against their claim on the basis that, in the scheme of the Strata Property Act (SPA), the collective interests of all owners overrode those of the group.
When this decision was appealed, the BC Court of Appeal took a different view of the rights of strata lot owners. Since all owners, and not the strata corporation, owned the common property as tenants-in-common, each member of the group was entitled to protect that interest by suing for damages. Individuals didn’t need to involve the strata corporation or obtain the approval of the other owners.1
In columns 392 and 399, townhome-style owners successfully argued against significantly unfair reallocations of common expenses triggered by the SPA requirement that unit entitlement, and not historic allocations, must determine each owner’s share. That success was not repeated in the case of a strata corporation consisting of 42 townhome-style units, formed in 1974 by the amalgamation of two strata plans of 22 and 20 units in eight buildings. The unit entitlement of each unit was one.
The difference in habitable areas between the smallest and largest units was 20 per cent. Despite this difference, the owners shared common expenses equally for 30 years. After this period, the owners became aware of the substantial costs of restoring the building envelopes for another 30 years, and the significantly greater amounts some owners would pay unless costs were allocated according to habitable area. Those owners petitioned to have unit entitlement changed from one to habitable area.
Unit entitlement of one was clearly unfair; however, all owners knew it was the basis upon which the strata corporation conducted its affairs. Taking this into consideration, the judge held that, since all owners had a common interest in having weatherproof and serviceable buildings, it was not significantly unfair that they share this cost equally.2
|1.||Hamilton v. Ball, BCCA, Vancouver Registry, Reasons for Judgment, May 17, 2006.|
|2.||Schaper-Kotter et al. v. The Owners, Strata Plan 148, SCBC, Vancouver Registry, Reasons for Judgment, April 24, 2006.|
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