The owners of a Coquitlam condo will not be able to to wind-up their strata and sell it to a developer, a Supreme Court judge has ruled.
In a Sept. 29 decision posted online, 22 of 25 owners seeking court approval of a petition to wind up a strata on a 40-year-old multi-family development on Inlet Street were told there was too much "unfairness, confusion and uncertainty" to approve the plan.
The owners who wanted to wind up amounted to 78.6 per cent of ownership, but despite the "high threshold" of support, Justice Geoffrey Gomery said there were too many uncertainties to proceed with the plan.
Key to his ruling is the fact that a developer backed out of the deal this past summer, which changed a number of factors.
Gomery said legal costs may increase, and there could be delays to any future sale, now that the developer has pulled out and is seeking a refund of its deposit in court.
What's more, the condo owners might face difficulties selling their units in the future if the wind-up is registered with the land title office and fewer owners are likely to approve it "on the basis of what is now known," the court heard.
Sale proposed during market upswing
Last summer, the condo owners discussed selling the property — which consists of six two-storey residential buildings built in 1982.
They engaged with a realtor, and by Nov. 5, 2021, had reached a deal with Anthem Properties Group Ltd. — a prominent developer in Coquitlam.
The owners had hoped to sell the property at 1-1174 Inlet St. to Anthem and stood to receive more than $1 million each after approximately $126,000 in wind-up costs, according to the court.
At a June 17 meeting, a majority of owners (89 per cent) agreed to the wind up and sale. But shortly after, on July 7, Anthem indicated it no longer wanted to buy the property, stating the agreement was terminated on June 14.
Purchase and sale of condo heading to court
It's also taking the strata to court for the return of the deposit. The owners, meanwhile, are seeking a counter claim for "specific performance" of the purchase and sale agreement, the court was told.
Only 22 of 25 owners agreed to petition the court to permit the wind-up of the strata. Two property owners opposed the sale arguing that it was unnecessary, and possibly risky, without any sale guarantee.
The third property owner was Anthem, which didn't provide an opinion, the judge noted.
In his decision, Justice Gomery said there was "no question" that unfairness, confusion and uncertainty were present in the matter before him, noting that due to ongoing legal issues the property owners may end up recovering "significantly less" than $1.085 million per owner, and their recovery could be delayed "perhaps for years."
"If the owners fail in their action against Anthem, their eventual recovery is entirely uncertain, but it is significant that they view this as the inferior outcome," said Gomery.
"It is impossible to know whether 80 per cent of the owners would have approved the winding up on the basis of what is now known. In view of the fact that less than 80 per cent have joined as petitioners, it seems unlikely."
