If your Strata Corporation is considering whether Strata Wind-up would be beneficial to all the owners,
our strata wind-up team would welcome the opportunity to meet with your Strata Council and share
our knowledge and experience. Give us a call today.
Since July 2016 with the introduction of Bill 40, the Strata Property Act was amended to decrease the level of owner approval from unanimous to 80% plus court approval to dissolve a strata corporation and sell the property. Here is the link to the strata act:
Strata Wind-Up offers a solution to strata owners who cannot afford or decide not to undertake major repairs necessary to extend the life of their building. The steady decrease in the availability of development sites in Metro Vancouver has caused municipalities and developers to create increase density in what were traditionally lower density neighbourhoods.
By selling an entire strata property to a developer, owners are able to demand a higher sale price than they would be able to get for their individual property.
Strata Wind-Ups vary from traditional property sales, in that they are dependent on all the owners in the strata to enter into binding contracts. in addition, timelines are often much longer, from the time of signing a contract to removal of subject conditions to the completion date, can be several months and even years.
Due to this longer timeline, there are commonly deposits given throughout the process. Consideration must be given to the amount of time a property is tied up by the contract before the subject conditions are removed, since there is no guarantee the transfer will complete until subjects are removed.
Strata Wind-Up Steps
STEP 1 (Month 1) Owners are approached by agents and developers. Strata council consider approaching the owners.
STEP 2 (Month 2-3) Informal meetings are organized with the owners to discuss the possibility of wind-up.
STEP 3 (Month 4-5) Formal resolutions authorizes strata council to hire legal representation to advise on the process, review listing agreement and ultimately finalize agreement with purchaser.
STEP 4 (Month 4-8) An agent is hired by council to market the property to developers. Council, agent and lawyer review offers. Informal owners’ approvals is acquired by Council and a letter of intent with purchaser is drawn up.
STEP 5 (Month 8-10) A formal purchase and sale agreement is entered into, either by the individual owners or by the strata corporation as a whole. Our objective is to get 100% buy-in from all owners but if the strata council decides to move forward with only 80% vote, court approval will also be needed. Purchaser performs due diligence. The lawyer drafts extensive resolution materials for owners’ approval. Council calls a meeting to vote on the 80% resolution.
STEP 6 (Month 10-12) Once the resolutions are approved, court application is prepared and made. There may be opposition to overcome before a liquidator is appointed and a court order is granted.
STEP 7: (Month 12-18) Winding up and sale process completes. Sales proceeds are distributed to owners. Owners are given several months to move while purchaser pursues development approvals.