174 Appointment Of Administrator

REGULATIONS AND FORMS

Filing of Order Appointing Administrator

Section 10.1 of the Strata Property Regulation, B.C. Reg. 43/2000, provides that an administrator appointed under s. 174 of the Act must file a certified copy of the court order making the appointment in the land title office. The Strata Property Regulation is included at chapter 58 (Strata Property Regulations).

Submissions

On the Strata Property Act Filing form, select Court Order, Strata Property Act, and attach an image of the court certified copy of the court order.

CASE LAW

Appointment of Administrator

Parties applying to court for the appointment of an administrator must establish that a strata council has engaged in substantial misconduct, mismanagement, or a demonstrated inability to manage the strata corporation affairs. If the property of the strata corporation was in excellent condition and the property continued to be under professional management, acrimony among owners within the strata corporation, as evidenced by a struggle whereby a minority of the owners seek to impede or prevent proper governance of the strata corporation, was insufficient to establish that the appointment of an administrator would be in the best interests of the strata corporation (Lum v. Strata Plan VR519, 2001 BCSC 493).

Where there is a dispute between factions within a strata corporation that has led to an inability to manage, govern and effectively implement necessary repairs to common property over the course of two decades, it is patent that the appointment of an administrator is in the best interests of the strata corporation (Santos v. Strata Plan LMS 1509, 2016 BCSC 1775).

Powers and Duties of Administrator

A group of owners, representing approximately 6% of the votes within a strata corporation, applied for and obtained an order appointing an administrator under s. 174 of the Act. The order stated that the administrator’s powers were to be held “at the exclusion of the members of the strata corporation” and that the administrator, acting alone, had the power to impose a special levy, approve a special budget, or pass any other resolution normally requiring the vote of a majority or 75% “if such resolution was in the best interest of the strata corporation”. The appellants, who controlled more than 50% of the votes within the strata corporation, appealed, seeking to set aside the impugned provisions in the order on the grounds that the trial judge acted without authority. The Court of Appeal found that minor changes in language from s. 71 of the Condominium Act to s. 174 of the current Act did not manifest a legislative intention to change the law. Rather, their purpose was to eliminate variable descriptions of similar concepts and to bring uniformity of exposition to the Act. The Act makes it clear that the owners and the strata corporation are separate entities in law and that the owners’ rights, including their right to vote at meetings of the strata corporation, are separate from their rights as individual owners. While s. 174 of the Act authorizes the court to appoint an administrator to exercise the powers and perform the duties of the strata corporation, the administrator can do no more than the strata corporation. Accordingly, if the strata corporation cannot act without the authority of a resolution requiring the vote a majority or 75% of the owners, the administrator is equally restrained. In setting aside the impugned provisions in the order, the Court of Appeal applied the reasoning in Cook v. Strata Plan N-50, 1995 CanLII 2422 (BC SC) to its interpretation of s. 174 of current Act despite minor changes in language in the current Act (Aviawest Resort Club v. Chevalier Tower Property Inc., 2005 BCCA 267, leave to appeal dismissed 2005 BCSC 1728). Note that this decision was made before s. (7) was added to s. 174 by 2009-17-26.

An administrator was appointed to bring order to the affairs of a strata corporation. The administrator prepared a set of bylaws (s. 128) and special resolutions for calculating each strata lot’s share of the common expenses (s. 100) and for removing a limited common property designation from an area in the loading bay (s. 257). The draft bylaws and special resolutions were defeated at a special general meeting. The administrator then applied for directions from the court. A number of owners also applied to the court for remedies similar to those sought by the administrator. The trial judge held that s. 174(7) gives the court power to permit an administrator to exercise a power or duty of a strata corporation despite the fact that the administrator had been unable to obtain the approval of the owners. The Court of Appeal disagreed. Sections 100, 128 and 257 provide that it is the owners, and not the strata corporation, who are authorized to approve bylaws, the formula for common expenses, and the removal of a limited common property designation. The Court of Appeal held that s. 174(7) falls short of empowering a court to dispense with the need for voter approval in these circumstances and that clearer wording in s. 174(7) would be required to divest owners within a strata corporation of their democratic rights under the Act (Norenger Development (Canada) Inc. v. Strata Plan NW 3271, 2016 BCCA 118).