Strata Termination Update

Mike Mangan
BCREA

A year ago in Legally Speaking No. 509, I described two Supreme Court of British Columbia cases that addressed whether a strata corporation must first pass an 80% vote (sometimes called a “winding-up resolution”) before strata council may list the whole complex for sale with a brokerage or enter a contract to sell the entire development to a buyer. The British Columbia Court of Appeal has now confirmed that there is no such requirement.¹ The eligible voters may decide by majority vote to authorize strata council to list the complex with a brokerage and later contract to sell the project to a purchaser, subject to the owners passing a winding-up resolution and meeting all other pre-requisites. Background   While reasons for terminating a strata development vary, two grounds are especially common. First, as a strata complex ages, it may need so much remedial work that it makes more sense to sell the project to a developer for redevelopment. Alternatively, if a strata project is located in an area rezoned for higher density development, the owners may prefer to profit by selling the property to a developer, who will maximize its potential. The Strata Property Act creates three termination methods. In the first two methods, owners choose to terminate by passing an 80% vote to approve a winding-up resolution, either to terminate without a liquidator (called a “Division 1 wind up”) or with one (a “Division 2 wind up”). An 80% vote is a vote in favour of a resolution by at least 80% of the votes of all of the eligible voters.² In most cases, after passing the 80% vote, the strata corporation must then ask the Supreme Court of British Columbia to confirm the winding-up resolution, giving any dissenting owner the opportunity to further object. In the third method (a “Division 3 wind up”), the Court orders the strata to terminate, typically because the strata corporation is too dysfunctional to continue; there is no winding-up resolution.³ Each termination method results in winding up the strata corporation and cancelling the strata plan. The relevant land is ultimately sold, and any personal property formerly belonging to the strata corporation converted to cash. Everyone who was formerly the owner of a strata lot will receive their proportionate share of the sale proceeds, after deducting any amounts due to the owner’s respective mortgage lenders or other secured creditors. Case Law In Buckerfield v. Strata Plan VR 92, some REALTORS^® initially asked strata council about selling the entire 41 unit complex.⁴ Strata council then organized a presentation to explain the termination process to the owners. In an informal poll, a majority of owners voted to hire a real estate brokerage to market the complex to developers for redevelopment, all subject to later passing a winding-up resolution. When strata council announced its plan to retain a brokerage on this basis, several dissenting owners sued the strata corporation in the Supreme Court of British Columbia. The dissenters apparently asked for a declaration that the strata corporation must first pass an 80% vote and appoint a liquidator, who would then be the only person with authority to list the complex for sale. Alternatively, the dissenters claimed that the eligible voters must first pass a 3/4 vote before strata council can retain a brokerage to solicit offers on the building. The Supreme Court disagreed, dismissing the dissenters’ objections and refusing to require an 80% vote, or a 3/4 vote, to engage a brokerage. On appeal, the British Columbia Court of Appeal observed that the Strata Property Act does not expressly impose any requirement for an 80% vote before listing a strata complex for sale. Nor does the Act imply any such requirement. The Court of Appeal confirmed that a strata corporation may decide by majority vote at a general meeting to engage a brokerage to list the whole development for sale, so long as the listing contract, and presumably any subsequent contract of purchase and sale, is subject to the owners later passing an 80% vote to wind up the strata corporation and cancel the strata plan and, where required, confirmation by the Supreme Court of British Columbia. There is no requirement to first have a liquidator in place to list the complex with a brokerage. The termination of a strata development is a complex legal event. If a strata council approaches a REALTOR^® to list the whole complex in a strata termination, the REALTOR^® should warn strata council to retain a strata lawyer as soon as possible to guide the strata corporation through the procedure. Any REALTOR^® interested in listing a strata development for termination will also profit by learning more about the process. Read the Buckerfield case above, or any or all of these other recent termination cases below:

• Strata Plan VR1966 (Re), 2017 BCSC 1661
• Strata Plan VR2122 v. Wake, 2017 BCSC 2386 varied 2018 BCCA 280
• Strata Plan VR2702 (Re), 2018 BCSC 390
• Strata Plan NWS837 v. Padua, 2018 BCSC 564

Copyright © 2019 British Columbia Real Estate Association

Vancouver council approves controversial Kitsilano five-storey rental project

Naoibh O’Conno
Vancouver Courier

Vancouver council approved a contentious rezoning application to build a five-storey rental building at Larch and West Second Avenue in an 8-3 vote Dec. 18. The decision came after a public hearing that attracted dozens of speakers, both for and against.

Only NPA Coun. Colleen Hardwick, Green Party Coun. Adriane Carr and COPE Coun. Jean Swanson voted against the project destined for 1805 Larch St.

Jameson Development submitted the application under the city’s Moderate Income Rental Housing Pilot Program (MIRHPP), which offers developers incentives to construct rental buildings in which 20 per cent of the residential floor space is reserved for moderate income households earning between $30,000 and $80,000.

In this case, the Larch street building will produce 63 rental units — 13 for moderate income households.

Twenty proposals are permitted under the pilot — the first two projects, both on the East Side on Renfrew Street — were approved following a public hearing last week.

Some residents living near the Larch Street site, who formed Kits Neighbourhood Group, campaigned against that project, arguing it doesn’t fit with the neighbourhood character, the building is too high, dense and bulky, and not enough affordable units are being provided to justify the incentives being offered to the developer.

NPA Coun. Rebecca Bligh cited the vacancy rate of less than one per cent as one of the reasons more rental is needed in Vancouver, and she expects the building will be full “in short order” once it’s constructed, while Coun. Lisa Dominato added there’s a “huge need” for both market and affordable rental housing. Dominato also noted the site is close to transit and amenities, and the project features green building standards.

OneCity Coun. Christine Boyle said there would be no displacement of existing renters since it was a church site, the new building will be a zero-emissions building, it will provide secure rental housing, and the property is close to amenities.

“It will be a well-loved, meaningful home for some people,” she said.

Coun. Swanson ran through “who gets what” from the project to explain her “No” vote.

She said the city would get 13 suites at moderate — not low — rental rates, and they would be subject to vacancy control, but 50 of the rental units won’t be subject to vacancy control and would be “pretty expensive” — higher than many existing rents in the area. Swanson added that the developer would get more than triple the density, an increase in property value, as well as development cost levy (DCL) and community amenity contribution (CAC) waivers.

She argued the city isn’t getting anywhere close to what’s needed in terms of affordability through the project, and she was worried about gentrification.

“If we approve this, I think we’re giving away too much for too little,” she said.

In casting her “No” vote, Coun. Hardwick said it’s not a large site, it’s not on an arterial, and there are better locations throughout Vancouver, and in Kitsilano, for such a project. She also questioned whether 13 affordable units were “worth hurting this neighbourhood.”

NPA Coun. Melissa DeGenova, however, was firmly in support of the application.

“Someone said to me once, ‘If we don’t start somewhere, we won’t get anywhere’. I think that’s a perfect statement,” she said.

© 2020 Vancouver Courier

Today RE/MAX announced the acquisition of First, an innovative tech company behind a ground-breaking real estate app

other

RE/MAX Holdings, Inc. (NYSE: RMAX), parent company of RE/MAX, one of the world’s leading franchisors of real estate brokerage services, today announced that it has acquired First, a technology company that leverages data science, machine learning and human interaction to help real estate professionals better leverage the value of their personal network.  

The four-year-old, North Carolina-based technology startup is known for creating the First app, an intelligent coaching platform that makes it easy for agents to identify likely sellers within their own network of contacts. With a focus on helping agents identify future listings, the app prioritizes who agents should reach out to and when, so they may strengthen current relationships when it matters most. It also organizes and consolidates an agent’s database and provides reporting on how much business is both won and lost from within an agent’s network.

“We have set our sights on becoming the global leader in real estate technology, and the acquisition of First is evidence of that steadfast commitment,” said Adam Contos, RE/MAX Chief Executive Officer. “With First, we found next-level talent combined with a game-changing service, delivering exclusive access to one of the best products for agents out there today.”

With the acquisition, RE/MAX agents in the U.S. will gain exclusive access to First’s platform at a significant discount beginning in early 2020.  Current First clients not affiliated with RE/MAX may remain on through their current contract’s expiration, or until the end of 2020.

“We’ve seen the impact the First platform has had in growing individual agents’ businesses, and the fact that we’ll now bring it to scale with the RE/MAX Network’s extensive group of agents is motivating,” said Mike Schneider, First CEO and Co-founder. “The race is on in the industry to establish technology as a true competitive advantage. For us, RE/MAX was the obvious choice given its brand, strategic roadmap, and global leadership position within the industry.”

Following the acquisition, Schneider will continue to lead the First team, who will remain in Durham, North Carolina, working closely with technology leaders at RE/MAX on upcoming integrations and contributions to the overall technology roadmap for the RE/MAX brand in 2020 and beyond.

“We’re committed to providing our global network of highly productive real estate agents with world-class tools, training and technology, and adding First to our powerful technology suite is the next step in that ongoing journey,” said Nick Bailey, RE/MAX Chief Customer Officer. “It’s the perfect complement to the booj Platform – our most recent technology offering that helps agents manage their business – and is another advantage for RE/MAX agents looking to grow their businesses efficiently and effectively.”

The technology transformation of RE/MAX began in February 2018 when it acquired booj, an award-winning Colorado-based web design and technology company. Beginning in August 2019, the booj Platform, an integrated suite of digital products that empower high-producing agents, teams and brokers to proactively establish, manage and grow client relationships was made available to RE/MAX affiliates in the U.S. The brand is also planning the launch of a new remax.com and consumer-facing mobile experience that will enable RE/MAX affiliates to deliver a more data-driven and efficient homebuying experience for their clients in early 2020.

© 2019 RE/MAX, LLC

Moderate Income Rental Pilot Program building two projects

Steve Randall
REP

The City of Vancouver has approved the first two projects under its Moderate Income Rental Pilot Program (MIRHPP).

The first will deliver 96 much-needed rental homes with 19 at below-market rates and 35% suitable for families. The second will provide 82 homes with 18 at secured below-market rents.

Each of the two developments – at 2543-2583 Renfrew Street and 2895 East 10th- are seven storeys and also provide commercial space at street level.

“The MIRHPP program is the best way we have to build homes for living wage and middle income households,” said Mayor Kennedy Stewart. “These below market units are vital for ensuring that our friends and neighbours are able to stay in Vancouver, and I’m proud that our Council continues to deliver this much needed housing.”

The purpose built rentals are privately owned, permanently secured and made available to households earning $30,000 to $80,000 per year. Rents will be set at a maximum average starting rents of $950 per month for studios, $1,200 for one-bedroom apartments, $1,600 for two bedrooms, and $2,000 for three bedrooms.

The city is currently considering rezoning applications for a further nine rental projects.

Copyright © 2019 Key Media Pty Ltd

Fraser Valley is expected to continue being a buyers’ market

Gerv Tacadena
Canadian Real Estate Wealth

Fraser Valley is expected to continue being a buyers’ market next year as more millennial first-time buyers commence their home purchase, according to the latest outlook from RE/MAX.

RE/MAX said Fraser Valley’s population growth will continue to have the most significant impact on the housing market.

“The Fraser Valley housing market is currently witnessing a buyers’ market due to the substantially higher inventory compared to the previous year and more buyers qualifying for the stress test as they become more adjusted to it,” RE/MAX said.

Due to the projected demand, average residential prices could increase by as much as 2% next year to $710,432.

“This is due to more Vancouverites moving to the region as they are being priced out of the market. The relative affordability of the area compared to Vancouver keeps it a hot real estate market,” it said.

One neighbourhood to watch out for is Surrey City Centre. The developments in downtown Surrey, particularly high-rise condos, will attract not just homebuyers but also businesses to the area.

Copyright © 2019 Key Media Pty Ltd

Updates to speculation and vacancy tax information are posted here.

other

The speculation and vacancy tax website has been updated to:

• Clarify that spouses declare as individuals not as a partnership
• Clarify how the 10-year period applies in the away from home for other reasons principal residence exemption
• Clarify exemptions, including the secondary residence exemptions, previous residence exemption, and away from home for any other reasons
• Clarify details about the exemption for spouses who are separated or divorced

The government announced it intends to introduce new speculation and vacancy tax exemptions for:

• Canadian Armed Forces members and their spouses, where the military member is away from B.C. due to service requirements
• Homeowners whose property can only be accessed by water

The government also intends a longer phase-out for these temporary exemptions:

• The exemption for rental restricted stratas will now end December 31, 2021
• The exemption for strata accommodation properties will now end December 31, 2020
• The exemption for vacant land will end December 31, 2019

Vancouver has attracted global wealth despite many of its buildings falling short of the wow factor

Steve Randall
Canadian Real Estate Wealth

Vancouver has attracted global wealth despite many of its buildings falling short of the wow factor according to a major developer.

Actually, Westbank Corp. founder Ian Gillespie’s words leave no doubt as to his opinion of the state of the city’s development: “Three-quarters of the buildings in this city look like a piece of s—,” he told Bloomberg.

And the developer of luxury towers says that the city has been complacent because – despite what he says is a “high level of mediocracy” – the wealth continues to flow into the city, especially from Asia.

Gillespie was speaking to Bloomberg about his forthcoming masterpiece; a 28.5 acre development that will match New York’s Hudson Yard as the largest in North America.

Oakridge, co-developed by QuadReal Property Group, will feature condo towers, a mall, a library, community centres, daycare, and a forest of newly-planted trees.

“If future generations don’t look at this and say, ‘they were thinking about what this means a hundred years from now,’ then I think we’ve been short-sighted,” Gillespie said.

It is scheduled for completion in 2027 and $1 billion of units were sold in less than a year.

Among other projects for Westbank are its first outside North America, a building in Tokyo.

Copyright © 2019 Key Media Pty Ltd

A partnership between British Columbia and Century Group will see almost 100 rental homes built in Langley

Steve Randall
Canadian Real Estate Wealth

A partnership between British Columbia and Century Group will see almost 100 rental homes built in Langley for middle-income people.

The province says that construction is underway on Solaro, which will provide 98 rental homes for individuals and families at 22304 – 50th Ave. in Murrayville.

The homes will be built by Century Group through BC Housing’s Housing Hub which works with various stakeholders to help create new affordable rental housing and home-ownership options for middle-income British Columbians (earning $50,000 and $155,000).

Monthly rents for the new homes will range from approximately $1,250 for a one-bedroom unit to $2,140 for a two-bedroom and den.

“Years of inaction by the last government have left many people, even those with middle incomes, like teachers, nurses and small business owners, struggling to find affordable housing,” said Selina Robinson, Minister of Municipal Affairs and Housing. “Through partnerships like this, we are building the homes that people need to stay in their community.”

The homes will be in two four-storey wood-framed buildings with underground parking and electric charging stations. Outside space includes dog park and children’s playground.

“While all of our projects are important to us, it is particularly exciting to partner with BC Housing on this initiative,” said Sean Hodgins, president, Century Group. “We see the family-oriented floorplans, focus on outdoor engagement spaces and sustainable living of Solaro as a great addition to the broader Langley community, and are excited to expand our presence in Langley with our Barbican Property Management division.”

Copyright © 2019 Key Media Pty Ltd