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For several years, various Supreme Court of British Columbia judgments have determined that strata unit owners, subject to an explicit agreement to the contrary, share responsibility for the strata corporation’s property—in particular the cost of maintaining and repairing it. A recent case, Poloway v. Owners, Strata Plan K692, underlined this principle even though some owners benefitted substantially less than others from common repairs and improvements.
Under the Strata Property Act (SPA), a strata corporation must allocate common expenses between the owners by unit entitlement. But some strata corporations containing different types of units (for example, townhouses and apartments or commercial and residential) can organize themselves into separate sections. The SPA requires that three-quarters of all of a strata corporation’s owners, as well as three-quarters of the owners in each potential section, attending a general meeting must vote in favour of any such reorganization that may result in common expenses being allocated in some way other than by unit entitlement.
Ten townhouse owners in Strata Plan K692, which has seventeen apartments in a single four-storey complex as well as twelve townhouses, began the dispute in Poloway. All parts of the property required extensive repairs costing more than two million dollars but over ninety per cent of these were dedicated to the apartment building.
The petitioners sought to have the Court order the strata corporation to create separate sections for the townhouses and apartments pursuant to the Strata Property Act. The intention would be to have the repair costs allocated to each section in accordance with the repairs it incurred.
Mr. Justice Barrow thoroughly reviewed the history of the jurisprudence. Quoting from a previous B.C. Supreme Court decision, he confirmed that the general rule when applying the SPA is that “you are all in it together” and this general rule should not lightly be displaced. In order to do so, the petitioners would have to demonstrate that the impugned conduct was “significantly unfair”.
When courts consider whether something in this context is “significantly unfair”, they take an historical approach to similar issues by the strata corporation involved as well as the conduct of the corporation in the context of the subject dispute. In Poloway, the Court made significant findings that the strata corporation had attributed past common expenses based on unit entitlement. Furthermore, during the dispute before the Court, the strata corporation had acted reasonably and in a manner consistent with the SPA’s requirements. The Court therefore found that, while the greater expense to the petitioners could be described as “burdensome”, it did not meet the standard of “significant unfairness . . . in this context.”
In view of this and earlier decisions, it is vital that strata corporations and individual strata owners consider the type and nature of the strata units in their plan before engaging in common repairs. Under the current statutory regime, unless there is an explicit agreement to the contrary before the imposition of a levy, the expense will probably have to be shared rateably according to unit entitlement.
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