COVID-19 (Coronavirus) – Update #17
Dear Strata Councils,
We write to you to provide updates on two of the most pressing, and nearly universal challenges being faced by Strata Corporations in the era of COVID-19.
Annual/Special General Meetings
A recent Civil Resolution Tribunal decision invalidated the results of a Special General Meeting held by a Strata Corporation, which is causing a great deal of consternation for Strata Corporations who have been conducting their General Meetings in accordance with the guidance that most strata management firms in BC (including Stratawest) have provided over the past seven months. You can read the BC CRT Ruling here. Some have mistakenly interpreted this ruling to mean that Strata Corporations must hold General Meetings electronically for so long as in-person meetings remain challenging due to COVID-19, however that is explicitly rejected within the ruling itself. It is also not true that just because this meeting was invalidated that a meeting you’ve already conducted is necessarily invalid- there are many issues with how this meeting was conducted. Electronic meetings remain an option for Strata Corporations, but they are not mandatory.
The CRT Ruling invalidated the meeting results for a number of reasons, not likely to be replicated within our own portfolio of business. First and foremost, the adjudicator ruled that the meeting notice in and of itself was flawed- in that it did not comply with Section 61 of the Strata Property Act. This is likely because the Strata Council at this property circulated the Notice of Meeting rather than the management company, and they did not do so in a manner which the legislation allows meeting notices to be circulated. As cited by the CRT: “I find the strata did not account for strata lot owners who did not live at the strata, or any who did not provide email addresses for notice purposes. As a result, I find that the strata’s attempts to give notice of the SGM were inadequate and not reasonable. So, I find that the May 20, 20 20 SGM was not properly called, and the vote taken at the SGM is not valid”. For our part, we will always ensure that notices our office sends out comply with the Section 61 requirements of the Act to avoid such a scenario.
A number of other flaws were cited with how the meeting was conducted, which are worth noting to ensure that your Strata complies with the Act and relevant Ministerial orders. Owners and their proxy appointees cannot be prohibited from attending if your meeting is held in a physical location, and Owners are free to appoint whomever they like as a proxy – with 2 notable exceptions which are employees of the Strata Corporation and employees of the Brokerage managing your property (us). The only alternative to a physical location is an online meeting, which as a policy we do not conduct on your behalf, due to the technical challenges associated with doing so. That being said, we will continue to attend and perform our regular duties if you retain a third party to do so on your behalf or host it electronically yourself with volunteers from the Council or wider Ownership. So, while your Strata can continue to encourage Owners to appoint a proxy to vote on their behalf, who that proxy is cannot be limited to Council Members. In light of COVID-19 and to ensure safety with physical distancing it is likely that you will want to reduce the number of attendees as much as possible which is precisely why we encourage Strata Councils to hold either an informal Town Hall/Information Meeting in advance of your General Meeting to offer Owners an opportunity to fully discuss and debate the merits of whatever resolutions you are proposing, or to offer an opportunity for Owners to ask questions in writing if it is a very simple meeting.
It’s important to remember that it is not Strata Corporations which have instituted a cap of 50 people on attending an event (and do not forget that physical distancing is required along with a host of other COVID-19 related measures), it is the Provincial Health Officer that has done so. You are obliged to allow Owners or their proxies an opportunity to attend if they so choose, but you can likely reduce the number of non-Council members/volunteers to a very small number or possibly zero if you ensure that Owners feel enfranchised and are offered adequate opportunities to debate the merits of the resolutions before the meeting itself.
There are two other points we feel very relevant to this conversation. The first is that the decision acknowledges that the in-person portion of a meeting can be very brief, as it is the Chair that decides when conversation on a resolution ends and the vote is called. As cited in the decision, “the strata council controls the agenda, and the SPA does not require pre-vote discussions”. In other words, if you take reasonable steps to enfranchise Owners in advance of the meeting itself, the Chair has the authority to simply go step by step through the agenda without any further meaningful discussion i.e. in the event that one Owner attends in person along with the handful of volunteers holding proxies. Finally, the meeting in question was highly controversial and the resolution presented passed by a single vote- most meetings are not nearly this contentious or as likely to be litigated, though we do encourage you to actively consider the “worst case scenario” when planning your meetings.
Another BC CRT decision is likely to cause concern for Strata Councils struggling with the topic of reopening amenities, which we have written about on a number of occasions (you can review previous bulletins at our website, https://www.stratawest.com/covid-19/). You can read the relevant decision here. In this decision, the CRT ruled that the subject Strata Corporation must either reopen their pool facility or obtain a ¾ vote of the Owners authorizing it to be closed during COVID-19.
We have no familiarity with the particulars of this Strata Corporation beyond the circumstances cited in the decision itself, but we can foresee Strata Councils drawing the conclusion that they must immediately reopen their amenity facilities as a result of this ruling. Within our own portfolio of clients, approximately 30% of the fitness facilities are open with the balance still closed after the initial flurry of closures in March. Strata Councils continue to wrestle with the very difficult questions associated with reopening including but not limited to:
- Determining appropriate limits to the number of attendees to ensure social distancing. The Condominium Homeowners Association (CHOA) recommends a rule of “15 % normal capacity”- in other words, a room such as a fitness facility should be limited to 15% of it’s previous maximum occupancy to ensure social distancing of 6 feet can be adhered to;
- Creating a Worksafe BC compliant safety plan that addresses the challenges posed by contractors and sometimes employees entering into these facilities;
- Establishing Rules around the safe operation of the facility including sign-in/contact-tracing requirements, duration of workouts, whether or not visitors can attend, who is responsible for cleaning of equipment/machines, etc.
- Dealing with the increased costs and challenges related to increased cleaning, security, contact tracing, etc.
For many months we have seen Strata Councils wrestling with these very difficult decisions. As a non-profit entity your Strata Corporation likely has limited resources available to address all of the myriad concerns around reopening. That said, remaining closed indefinitely could certainly lead to complaints from Owners and Tenants who feel the facilities are being closed unfairly. Balancing the competing priorities of health and wellness is a very challenging task, one which we do not envy you being responsible to make decisions around. We encourage you to avail yourselves of the resources available at our website to create plans you feel comfortable establishing when reopening, or to give consideration to obtaining a ¾ vote of the Owners to formally authorize the closure of your facilities if reopening is not feasible- which may be the case in some instances depending on the particular physical and demographic realities of your Strata Corporation. While your Property Manager can assist with high-level guidance based on experience elsewhere, this is the Strata Council’s decision to make and we are not a substitute for legal advice or Worksafe BC expertise.
We would also be remiss if we did not point out that this decision was about a Strata pool facility. In practice, pools are larger rooms (often outdoors) with lots of space to move around. Gyms/fitness facilities are typically more cramped because of machinery and other equipment. The fact patterns are important and likely to be unique between different Strata Corporations.
As always, we thank you for taking the time to read this important update.