Legal expertise key to holding successful condo wind-up meetings

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Dear Tony:

Our strata corporation held a special general meeting two weeks ago where we considered proceeding with a wind-up process. A developer/buyer approached our council six months ago. Since then, we have held several information meetings and were asked to vote at a preliminary wind-up meeting to authorize legal fees and proceed with the official meeting and resolutions to consider the offer. At the meeting, 80.5 per cent of attendees voted in favour of proceeding. As a commercial property owner, I was concerned by the procedures used at the meeting and the appointed real estate person who chaired our meeting. There appeared to be several conflicts and confusion over how the vote was taken and calculated. Please explain the voting process for a wind-up and how votes are calculated. Is it not 80 per cent of the strata corporation’s total number of units? How do we challenge the meeting if this was not conducted properly?

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— Cal W., Burnaby

Dear Cal:

A strata corporation may authorize the funds from the contingency reserve or by a special levy for legal fees for the purpose of proceeding with a special general meeting to vote on the offer and conditions presented for the purchase of the corporation, known as winding up the strata corporation.

The authorization to proceed with the meeting, retain a lawyer to prepare the resolutions with the intention of a court application to ratify the vote and appoint a liquidator if the vote passes is a three-quarter vote. A three-quarter vote, to authorize the funds for legal services, is based solely on those who attend a meeting and who vote in favour or are opposed at the time the vote is taken.

80.5 per cent of those attending would generally pass a three-quarter vote; however, your strata corporation includes eight commercial strata lots, which were only recognized as one vote per lot, which was incorrect. Commercial /non-residential strata lots are given proportional votes based on their area. The commercial units and several residential owners who voted against the resolution represented 28.85 per cent of the votes opposed when the vote was taken, not 21, which were calculated. If voting entitlement had been applied correctly, the resolution would not have passed. An 80 per cent vote, required to approve a wind-up proceeding, is 80 per cent minimum of the total number of votes shown on the schedule of voting entitlement, who must vote in favour. Anyone opposed, not attending or abstaining on an 80 per cent vote is opposed. Certified proxies are eligible to be represented and vote on behalf of the owners, and proportional votes of commercial units must be calculated.

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In matters where there is a wind-up process, or a major special levy for repairs, an independent chairperson is frequently requested to ensure impartiality, is knowledgeable and experienced with the Strata Property Act, the application of the bylaws of a strata corporation, voting procedures and the administration of voting entitlement.

I would advise the strata corporation to reconsider convening the meeting with new notice and the assistance of legal support to confirm voting procedures are conducted and calculated correctly. Irregularities in voting results or procedures frequently occur and may be challenged through the Civil Resolution Tribunal. No one is appointed to chair a meeting; a majority vote elects them at the meeting if the president or vice president is unwilling or unable to act.

Tony Gioventu is executive director of the Condominium Home Owners Association. Email tony@choa.bc.ca.

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