A B.C. Supreme Court judge has ordered a Whistler strata development to amend the “significantly unfair” way it calculates unit entitlements following a complaint to the provincial Civil Resolution Tribunal (CRT).
In his May 16 decision, Chief Justice Christopher E. Hinkson ruled that the way unit entitlements had been calculated in the event of a sale, fire or other destructive event for strata lot owners at Whistler’s Adventures West Lakeside residential development was unfair and based on legislation first enacted in 1966.
The issue initially arose from a claim by a strata owner brought before the CRT, which was initiated to address “an alleged overpayment of strata fees, which were not in conformity with the Strata Entitlement system for calculating contributions.”
In a nutshell, the 1966 Strata Titles Act, the first statute allowing for the creation of strata properties in B.C., did not contain any requirements related to unit entitlements aside from mandating the entitlements be expressed in whole numbers. The original act also did not contain any provision allowing for the amendment of unit entitlements.
Under the unit entitlement schedule filed for the strata plan, lots were divided into three categories, based on square footage. Under that schedule, owners of the smaller lots would receive between $198,010 and $313,810 less than they would based on 2021 assessed values in the case of a destructive event, representing up to 48 per cent of their total value, depending on lot size. The mid-sized strata lots, meanwhile, would receive between $23,971 and $141,971 less than their 2021 assessed value, also dependent on lot size, while the large lots would receive between $48,839 and $157,561 less than last year’s assessed value.
The petitioner in this case sought to amend the unit-entitlement schedule that was in place and adopt a schedule of interest on destruction, a formula based on each unit’s comparative recent assessment value. Ultimately, it was deemed the remedies being sought were beyond the scope of the CRT, which is how the issue wound up in the Supreme Court.
“I accept the petitioner’s submission that the distribution of proceeds upon a Destructive Event based on the [unit-entitlement] system is significantly unfair given the entitlement of each owner would not be proportionate to the value of their [strata lot],” Hinkson wrote in his decision. “I find this result to be unreasonable and transcends beyond mere prejudice or trifling unfairness.”
The judge ordered the strata to adopt an interest-on-destruction entitlement system, which was supported by the majority of owners and “are in their best interests as a community,” Hinkson said. He also ordered relief be paid to the petitioner retroactive to Nov. 1, 2019, when the owner purchased the lot.
