Just Announced: New Strata Property Regulations
Effective May 29, 2020, the BC Lieutenant Governor issued an Order-in-Council (OIC 270 2020) to amend the Strata Property Regulation in two ways:
Extension of deadline for an AGM or SGM during a State of Emergency:
Strata corporations now have an additional two months to hold an annual general meeting or special general meeting if the strata is located in an area where a local or provincial state of emergency is in effect at any time during the month before the statutory deadline for holding the meeting.
For example, if a strata corporation has a fiscal year-end of April 30, normally it must hold an annual general meeting by June 30 to comply with the Strata Property Act. If a state of emergency ends on June 15, the deadline for the strata to hold the AGM is extended to August 30.
This change helps to respond to the current COVID-19 pandemic. The regulation change will also apply to future states of emergency. It provides flexibility to stratas during other disruptive incidents, such as floods or forest fires, when a provincial or local state of emergency has been declared. See the strata housing COVID-19 webpage: Meetings and Decision-making.
Payment of an unanticipated increase in insurance premiums:
For unanticipated expenditures that were not able to be put forward for approval in the annual budget, spending from the operating fund or contingency reserve fund may be possible without a vote of the strata corporation. This is permissible if there are reasonable grounds to believe an immediate expenditure is necessary to ensure safety or prevent significant loss or damage ([Strata Property Act sec. 98(3)].) This requires a decision by the strata council, and they may wish to consult with a strata lawyer to decide what “reasonable grounds” are.
The new regulation clarifies that strata corporations may apply sec. 98(3) to pay for a sudden increase in insurance premiums from their contingency reserve fund, without approval from owners, if payment is required before there is time to convene a general meeting. The reasoning is that insurance is not only a statutory requirement but is also intended by definition to prevent the strata corporation from suffering a significant loss.
Since contingency reserve funds are mainly being saved for future repairs and replacements, it will be important to replenish the funds used for an urgent unapproved expenditure as soon as possible. This can be accomplished via a special levy and/or an increase in contributions to the CRF by way of higher strata fees. See the strata housing COVID-19 webpage: Budgets, AGMs and Unanticipated Expenditures.
For additinal information and tools to help stratas manage through the COVID-19 crisis, please visit our Resources page.