When a BC Strata Corporation May Need a Court Appointed Administrator

Most strata corporations never come close to needing one. Councils get elected, budgets get passed, repairs get done, and the occasional dispute gets resolved without anyone going near a courtroom.

A small number reach a point where the ordinary machinery has stopped working, and no internal process is going to restart it. That is what section 174 of the Strata Property Act exists for.

What an administrator actually is

Under section 174, the Supreme Court of British Columbia may appoint an administrator to exercise the powers and perform the duties of the strata corporation. The court decides the scope, which can be all of the strata corporation’s powers or only some of them, and sets the term, which may be fixed or open-ended.

In practice the administrator steps into the role the council would otherwise fill, with authority granted by the court rather than by an election. The strata corporation continues to exist. Owners continue to own their lots and pay their fees. What changes is who is making decisions and signing off on them.

One point worth being clear on: this application goes to the Supreme Court. The Civil Resolution Tribunal handles most strata disputes in British Columbia, but it does not have jurisdiction to appoint an administrator.

The situations that lead there

Courts do not appoint administrators because a strata is difficult or because factions dislike each other. They do it when the corporation cannot carry out its statutory obligations. The recurring patterns look like this:

• No council, because nobody will stand, or repeated resignations have left it without enough members to function
• Meetings that cannot reach quorum, so budgets and resolutions cannot be passed
• Annual general meetings not being held at all
• Required maintenance and repair of common property not being carried out, sometimes to the point of a safety issue
• Financial records that are incomplete, missing, or show funds that cannot be accounted for
• Deadlock between factions that has persisted through multiple meetings and made any decision impossible
• Repeated non-compliance with the Strata Property Act, the regulations, or the bylaws
• Litigation among owners that has consumed the corporation’s attention and funds

The common thread is not conflict. It is paralysis. A strata where people argue loudly and still pass a budget is functioning. A strata where nothing can be decided is not.

Who can apply, and what the court weighs

An application can be brought by the strata corporation itself, by an owner, by a tenant, by a mortgagee of a strata lot, or by any other interested person. That breadth matters, because it means a single owner watching a building deteriorate is not without options.

The test the court applies is whether appointment is in the best interests of the strata corporation. That is deliberately broad, and it means the court is weighing outcomes rather than assigning blame. Evidence that the corporation has failed to meet its obligations, and that ordinary remedies have been tried or would be futile, is what carries the application.

It is worth knowing that this is treated as a significant intervention. Courts generally prefer that owners govern themselves and will look at whether less drastic options remain available.

What changes once an administrator is in place

The practical effects are immediate. Decisions get made, because there is someone with the authority to make them. Financial records get reconstructed and brought current. Overdue maintenance gets assessed, prioritized and scheduled. Statutory obligations, including meetings, budgets and depreciation reports, get met.

Owners should also understand what does not change. Strata fees remain payable and frequently increase, because deferred maintenance and unfunded contingency reserves are usually part of what caused the problem. Special levies may be necessary. The cost of the administrator is borne by the strata corporation, which means the owners.

That cost is the point most often raised in opposition, and it deserves a straight answer. Administration is not cheap. It is generally less expensive than several more years of deterioration, emergency repairs at emergency prices, and the effect on property values of a building with an unmanageable reputation.

Steps worth taking before an application

Because the court considers whether other options were available, and because most strata corporations would rather not be there at all, the intermediate steps matter. Bringing in professional strata management is frequently enough on its own, particularly where the underlying problem is that volunteer council members are out of their depth rather than unwilling.

Reconstructing financial records, getting a depreciation report done, and putting a realistic funding plan in place also address root causes directly. Many of the situations that end in administration began years earlier as budgeting and reserve fund problems that nobody wanted to confront.

Talk to us
Obsidian Property Management has been a licensed strata brokerage in British Columbia since 2012. Sean Michaels has been appointed several times by the BC Supreme Court as a court appointed administrator, and we work with strata corporations across Surrey, Greater Vancouver and the Fraser Valley on both administration and ordinary management.

If your strata is struggling to function, it is worth a conversation before the situation hardens. Call 604-757-3151 or contact us.

This article is general information about the Strata Property Act and is not legal advice. Strata corporations and owners considering an application should obtain advice from a lawyer about their specific circumstances.