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Condo unit owners can’t block building sale, B.C. Supreme Court rules

The B.C. Supreme Court in Vancouver.

Darryl Dyck/The Canadian Press

A B.C. Supreme Court judge has ruled that a minority group of condo owners who oppose the sale of their building because they fear losing their home and community don't have the right to block others who want to cash out for a financial windfall.

In the first decision of its kind in British Columbia's evolving legal landscape involving mass condo sales, Justice Linda Loo acknowledged that six of the apartment owners in a 33-unit West End building "may feel stressed by having to move, and that being forced to move is not fair to them."

Their lawyer, Steve Hamilton, also argued that the sale and redevelopment of their building would contribute to the gentrification of the area.

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But, Justice Loo said, that should not be allowed to override the legitimate desire of the vast majority of the owners at The Hampstead to make a profit by selling.

"I do not agree that property rights as a home should be given greater emphasis in the face of 80 per cent or more of the owners who want to take advantage of the increased profit to be made as a result of rezoning and redevelopment, particularly when the preponderance of the evidence is that the owners who want to remain living in the community can do so," Justice Loo wrote in a recent decision.

Justice Loo noted that the city's new West End Community Plan has set the stage for major change in the area, something that isn't under the control of the legal system.

"It is not for the court to determine on this application the wisdom of the City's decision on social housing, densification or the rezoning or the City's West End Community Plan allowing for redevelopment of The Hampstead," she wrote.

The strata council at The Hampstead, built in 1989 near popular English Bay, started looking at the possibility of selling the property in early 2016, after getting news that they were facing a $675,000 maintenance bill for 2018.

That, combined with the knowledge that the site is now much more valuable because of additional density permitted for it in the West End plan, made selling attractive to many.

The development company Townline Ventures Inc. was eventually chosen as the buyer after the property was marketed through a brokerage. Townline offered owners a total of $45-million for their units, more than double the current assessed value of $18-million.

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At a June vote, more than 80 per cent of owners voted in favour of the sale. That 80-per-cent bar is the new requirement in B.C. law for a group condo sale, according to legislation passed in June, 2016.

But the six opponents filed a lawsuit anyway, aiming to get the vote overturned. Several of them are retired and have lived in the building for decades.

A recent B.C. Supreme Court decision in another case saw a vote overturned because the judge said that the strata corporation didn't follow the proper process.

This time, Justice Loo said the strata corporation was careful to inform all owners of everything happening every step of the way and that the process was transparent.

Lawyer Peter Roberts, who acted for the majority group of owners, said the lesson learned in this case is that strata councils need to ensure that they do everything right.

"There's a need for strata corporations to be organized right from the start."

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Mr. Hamilton, acting for the minority group, said the decision will likely be appealed because it still leaves a lot of confusion for future condo sellers about what is a fair process.

He argued that strata councils should not run the sale process. He said they are often approached first by developers and are privy to negotiations and information that not everyone gets.

"They don't share all the information. The minority doesn't seem to get enough information. And by the time it's getting to the owners, the council has already made up its mind."

Another municipal-law expert unconnected to the case said this kind of decision could function as a warning to city planners about unintended consequences of their new policies on zoning, such as the West End plan that allowed much greater density along certain strips at the edges of the historic neighbourhood.

"I'm not sure the planners … realized that their land-use policies would have this effect," Bill Buholzer said.

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