Strata Tip of the Week - Reviewing Special Levies for Compliance

When purchasing a strata-titled property, ensuring that special levy resolutions meet legal requirements is critical to protecting buyers from unexpected financial risks.

The Strata Property Act (SPA) outlines specific requirements for how strata corporations must:

• Notify Owners: Inform owners of meetings where special levy resolutions are being proposed.

• Provide Resolution Details: Provide detailed information on the resolutions to be voted on.

Here are some things to watch for:

1. Notice Requirements

To be valid, special levy resolutions require proper notice of the general meeting, as outlined in Section 45 of the Strata Property Act. The meeting notice must include:

• A description of the matters to be voted on, including the wording of any resolution requiring a 3/4, 80%, or unanimous vote.

• The date, time, and, if applicable, location of the meeting.

• Instructions for attending by electronic means, if applicable.

2. Timing Requirements

The strata corporation must meet specific timing requirements for issuing notice of annual or special general meetings:

• Two Weeks’ Notice: The SPA requires strata corporations to provide at least 2 weeks’ written notice of the meeting.

• Excluding First and Last Days: The Interpretation Act clarifies that when “at least” is used, the first and last days are not counted, requiring 16 days between the date the notice is sent and the meeting date.

• Non-Personal Delivery: If the notice is not left with the person entitled to receive the notice, the SPA deems it received 4 days after being mailed or delivered.

In Practice: To meet all these requirements, in most circumstances, a general meeting notice must be mailed or delivered at least 20 days before the meeting date.

Failure to meet notice requirements may invalidate resolutions approved at that meeting, which could pose significant risks to buyers.

3. Resolution Required Information

Every special levy resolution must include:

• The purpose of the levy.

• The total amount to be raised.

• The method for determining each strata lot’s share.

• The specific amount owed by each strata lot.

• Payment deadlines and instalment schedules.

If any of these elements are missing or incorrect, the resolution may be invalid, which could pose significant risks to buyers.

For example, in Stark v. The Owners, Strata Plan VR 2362, the Civil Resolutions Tribunal invalidated a special levy resolution due to, among other things, improper notice, highlighting the importance of compliance.

4. Why This Matters for Buyers

Improper notice or incomplete levy resolutions may result in:

• Invalid Levies: Complications may arise if the levy cannot be enforced.

• Future Special Levies - Invalid levies may require additional meetings or votes to rectify errors, potentially leading to further costs for buyers.

• Unexpected Delays - Disputed or invalid levies can delay essential projects (e.g., repairs or maintenance), affecting the property’s condition and usability.

• Potential Disputes: Procedural errors may result in disputes with the strata corporation, causing stress and uncertainty for buyers.

5. Protecting Buyers’ Interests

To safeguard buyers, it’s essential to:

• Review the Full Package: Obtain and review the general meeting notice package, not just the meeting minutes.

• Verify Compliance: Ensure the resolution meets all requirements under the SPA and other relevant legislation, such as the Interpretation Act.

• Seek Legal Advice: Advise buyers to seek legal advice if any irregularities are found.

Final Thoughts

Special levies can significantly affect a buyer’s financial obligations. By confirming that notice and resolution requirements are met, you can help buyers avoid potential pitfalls and safeguard their investment.

If you have questions about reviewing strata documents, we’re always happy to help!

That’s it for this week. If you have any suggestions for other topics you’d like us to cover, please let us know at info@condoclear.ca.