Strata Wind Up Services
The Basic Steps
We are pleased to assist Your Strata Corporation with winding up. The process is relatively new to the industry and many corporations have found that it is not always straight forward. As we monitor results in the marketplace we and other consultants change our advice as well.
Quay pacific has been involved in several strata wind ups. Using resources within our office as well as outside consultants, we can navigate the Strata Corporation through the many considerations. We believe our advice and guidance will result in a smoother and more profitable transaction for owners.
There are 8 general steps to the wind-up process. Some corporations do multiple steps at once, others do each step, the process, however modified, consists of these general steps.
- AWARNESS: council and owners have awareness of wind up potential of the strata corporation
- This typically occurs when the need of an expensive special levy is apparent, or the Corporation is approached by a Realtor, or Developer or has a discussion with the property manager, who may have recognized the underlying value of the property, or owners see what is going on in the neighbourhood.
- EXPLORATION: preliminary exploration of market valuation, information gathering on process, free consultation with industry related professionals such as property management, realtors, lawyers.
- Curious council members may invite a professional or consultant into a meeting to explore what may be involved and benefited from the process.
- CORPORATION COMMUNICATION: SGM or INFORMATION MEETING: with preliminary information provided to the ownership along with a resolution for funding and or authorization and direction for council to pursue investigation of wind up feasibility.
- In order to determine If a wind up is feasible, the owners may direct council to investigate various options or opinions from various sources and report back to the ownership. There may be a wind-up committee created.
- EXAMINATION AND CONSULTATION: the corporation complies with the resolutions of the SGM or Information meeting and direction provided by the ownership:
- A thorough exploration is conducted. All elements of a wind up are explored, including benefits, drawbacks and options. There may be a funding set aside for a certified appraisal or land use study or costs for additional services from the Property Management company or other professionals such as Lawyers and Consultants.
- SEC 272 WIND UP SGM: The corporation to receive the report and outcome of the examination and consultations. Resolutions to be presented based on council recommendations.
- This may include a wind-up resolution along with authorization and direction for the council. Lawyers and Realtors or Developers are more actively engaged in the process. The outcome of the SGM may also be to end the process with agreement to re-visit the process in the future or change in bylaws to assist in a future wind up.
- ACCEPTANCE OF TERMS AND CONDITIONS SGM: The corporation to consider an offer of purchase or letter of intent and provide council direction
- There are numerous ways this process unfolds. Either wholesale, terms, individual sales, letter of intent, phased sales, subdivision of property, or any other way that can be imagined. The consultants will advise on the most suitable arrangements and owners or committee will make final decisions.
- COURT APPLICATION: in compliance with Part 16 of the SPA final application and approval by the supreme court.
- Lawyers will finalize documents and make application if necessary. As we know your strata corporation and the various complexities of the offer, we will be able to recommend lawyers most suitable for your situation. We will have them engaged as early as possible but conducting only the most cost-effective work for efficiency.
- COMPLETION: in compliance with the agreed terms of the contract of purchase and the court order, conditions and terms are fulfilled, funds are transferred and dispersed.
- As a licensed Real Estate office we are also able to provide individuals with listing and purchaser agency services.
How Can Quay Pacific Assist ?
Based on the above wind up process we can assist in 4 ways
- UPON REQUEST ASSISTANCE: Within “ARTICLE 5- ADMINISTRATIVE MANAGEMENT” of our management contract we will serve at the direction of council in any capacity requested. This is an additional service and shall be completed by the manager or senior manager at a billing rate of $150 per hour.
- WIND UP CO-ORDINATION: Quay Pacific, will use our network of professionals, industry knowledge, and personal experiences and observations of similar transactions to advise and provide consultation and recommendations to every element of the 8 steps above. This includes, preliminary market evaluations, consideration to re-zoning within the OCP of the area, call for marketing and legal proposals, suggestions of terms and conditions, review of offers, call for SGM’s and pay out disbursements of funds. This service shall be provided by the property manager and executive managers who are knowledgeable and familiar with all the elements of the process. Quay Pacific unlike any of the other professionals you will interact with, knows your building, the owners and the issues better than anybody else. Why wouldn’t you want your managing agent involved from the beginning to assure the smoothest and most profitable transition. This service will be billed at $200/hour plus a success fee of .35% of the sale price. (in example $35,000 per $10,000,000.) Typically, the listing agent the corporation selects will pay a professional referral fee to Quay Pacific for a similar amount. In those situations, we will disclose the remuneration and the Strata Corporation will not have to pay the success fee, as it will be paid by the Listing Agent.
- LISTING AND MARKETING AGENCY AGREEMENT: Depending on the complexity of the Strata Corporation’s situation or marketability, you may choose to engage Quay Pacific to act as your marketing agency. With our extensive network of developers, realtors, consultants and investors, we may be the best agent to represent the corporation. We may be able to obtain the most agreeable price, terms and conditions for the owners. As your managing agent, you can be assured we have a vested interest in making sure everything is done right. If we are the marketing agent, we offer a preferred client rate which is up to 25% below standard industry rates. Additional fees may or may not apply.
- SELLING AGENCY: if you list the strata corporation for sale, regardless of who you select, we will cooperate with the that agent in the capacity directed by the Corporation. Further If the Agent has a co-operating broker agreement, which is typical, we may, as a licensed brokerage, source the purchaser from our network of developers and become the selling agent of the complex. Our fee would be paid out of the listing commissions.
The above is a basic outline of the process. The next step would be for us to have a complimentary meeting with council to determine how specifically Quay Pacific can assist you with the process. The is time and effort required to wind up a strata corporation. Council can have professional guidance or rely on volunteers. Considering the scope of work required and the scale of money involved, most would agree professional assistance would be prudent. The question council needs to determine is which professionals. Lawyers, realtors, land consultants or others.
As your property manager, we believe nobody is better situated than us to provide competent advice. We have the network of required professionals, an have extensive knowledge of your building and familiar with owner demographics and politics of the building. Our involvement will make this critical transaction more successful.
If you would like Quay Pacific to be involved, please contact us for a complimentary consultation to discuss the next steps for your corporation.