Article

Bill 40 Wind Up For Stratas

Est. Reading: 6 minutes

Strata wind-ups are a great way to realize the economic potential of a multi-unit residential property, by leveraging the value of each strata unit in the strata to a developer that wishes to develop on the property. Despite being a great way to realize the economic potential of your property, the wind-up process can be a complex one that involves real estate law, condominium law with the law of restructuring.

Many strata owners wish to wind up a strata corporation but are not aware of the complications and effects this may have on all parties if they skip seeking professional advice. It is extremely important that before moving ahead with the process that all parties involved have a clear understanding of what to expect. This way, the process is much more likely to pass through smoothly right from the start.

Summary
Asset Class
Land
Location
Vancouver
Date
July 21, 2021
Author
Klein Commercial
Services
Capital Markets, Tenant Representation

Winding Up a Strata Corporation

The update to the strata property law in 2016 meant that strata corporations can now apply to the court to cancel a strata plan and voluntarily wind up, pursuant to a resolution approved by at least 80% of the owners involved.

This option is a desirable one, especially for older stratified developments that are about to face significant structural or building repair expenses. Other significant factors for owners to sell their property to a developer may include a change in zoning or an increase in neighborhood density. The former generally makes the property more attractive for developers willing to pay for the building and land.

In contrast, the issues that face a strata corporation in achieving its goal of winding up and selling it's previously strata-titled property to a developer is complicated. The process is generally technical with various steps the court requires to oversee the complete process.

If the strata wind-up process is not completely compliant with legislation, the court may also decline the proposal which will then incur additional costs and set back the sale months or even years.

The Strata Winding Up Process

Over the years, the availability of open land suitable for development has continued to dwindle. As a result, real estate developers are now turning to strata corporations to get adequate land for development.

Often a termination process starts when a developer approaches a strata corporation wishing to buy all the strata lots for redevelopment. Or a strata corporation may be interested in winding up and selling for redevelopment because of excessive repair and maintenance costs.

The key during the process is for open clear communication with owners with meetings held from the very beginning to discuss options. It is important to keep owners informed on the termination and the distribution of funds if the sale is to go ahead to a developer.

Owners will also want to understand how funds from selling would be disbursed. If the majority of owners are interested in termination, usually a resolution is adopted to enable the strata council to move the process forward and hire a legal counsel.

At this stage in the process, it’s important for the strata council to then hire an experienced real estate broker to market the property and negotiate for the best possible price from the developer. It’s important that owners understand the building value in the market and have professionals who can negotiate on their behalf.

The winding-up resolution drafted by strata’s legal counsel authorizes the strata corporation to apply for termination orders in the supreme court plus vested orders to approve expenditure or other miscellaneous matters such as rent-free timelines or move-out durations.

Land Assembly Specialists

Alex Kwong

Alex Kwong


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BA

Amir Kamyab-Nejad

Amir Kamyab-Nejad


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B.Eng, MBA

Bready Wu

Bready Wu


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Brian Oh

Brian Oh PREC*


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M.Eng

Dean Thomas

Dino (Dean) Thomas PREC*


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DEC

Dmytro Chernysh

Dmytro Chernysh PREC*


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DIBM, BSKin

Eugen Klein

Eugen Klein


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B.Comm, FRI, CLO, CRES, ARM®, RI, CCIM, CIPS, ICD.D

Josh Rosenberg

Josh Rosenberg


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Managing Broker

Michael Coulter

Michael Coulter


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Nahal Gamini

Nahal Gamini PREC*


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IIDA, IDC, NCIDQ

Olga Tarasenko

Olga Tarasenko


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B.Ling (BACHELOR OF LINGUISTICS), DIBM

Sunny Oberoi

Sunny Oberoi


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Land Assembly Specialists

Nahal Gamini

Nahal Gamini PREC*

IIDA, IDC, NCIDQ

Nahal Gamini is an award-winning Interior Designer, with 17 years of experience in Development and Real Estate, bringing enthusiasm and expertise to each client that she represents. She offers each of her clients personalized service and expertise on location, space, and lease/purchase options and is a trusted resource in the…
Dmytro Chernysh

Dmytro Chernysh PREC*

DIBM, BSKin

Focused Industrial

Dmytro Chernysh joined Klein Group Royal LePage Commercial in 2018 and specializes in both investment sales and leasing of industrial properties and development sites throughout Greater Vancouver. Dmytro’s honest approach to advisory and service excellence has fast resulted in repeat assignments with loyal clientele. He currently represents over $175 million…
Amir Kamyab-Nejad

Amir Kamyab-Nejad

B.Eng, MBA

Amir Kamyab-Nejad is a trusted expert in real estate and business strategy, combining over a decade of hands-on experience with advanced academic and professional credentials. With an MBA from Simon Fraser University, a Bachelor’s in Electronics Engineering, and prestigious designations such as CCIM (Certified Commercial Investment Member) and FRI (Fellow…
Brian Oh

Brian Oh PREC*

M.Eng

Brian Oh is a certified real estate agent representing homeowners, prospective homeowners, and commercial real estate investors in the Greater Vancouver region. Dedicated to fostering long-lasting relationships, Brian is recognized for his client-centric philosophy and analytical acumen in sourcing high-quality properties and/or buyers, and working alongside clients through each phase…
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