Please read the following article prior to viewing the lease documents for clarification and to avoid confusion.
SPHM Corporation – It should be noted from the start that Sonoma Pines is governed by Sonoma Pines Homeowners Management Ltd., a BC Corporation in which every homeowner is a shareholder. We have never been a Strata Corporation.
- There has been some confusion about the applicability of the Strata Property Act (SPA) to Sonoma Pines, due to the complex history of the development.
- The developer’s company, Carrington Road Holdings Ltd., held the Headlease, and issued Subleases to all homeowners.
- Along with the Subleases, each homeowner was issued shares in a company known as Sonoma Pines Lessee Corporation, whose sole purpose was to take over the Headlease in the event of a default by the Developer.
- During the time that the Developer was still actively building and selling homes, two Homeowner’s Associations were formed, one for the Single-Family areas and one for the Multifamily areas.
- When the Developer finished the project, and as they did not want to be involved for the remainder of the 99-year Headlease, they converted their company, holding the headlease into Sonoma Pines Homeowners Management Ltd (SPHM Ltd), and Sonoma Pines Multifamily Homeowners Management Ltd.
- Finally to end up with the homeowners as shareholders of the Company holding the Headlease, all of the shares held by the Developer were surrendered, and the three companies were amalgamated into a single company bearing the name: Sonoma Pines Homeowners Management Ltd.
- There were initially two areas that referred to the SPA: namely, the Articles of our company and a clause in the property Sub-leases.
Company Articles- As noted above, the initial Articles were created for the developer’s company.
- They stated that if the “company” chose not to manage the common property, that homeowners would be entitled to form a Home Owners Association (HOA) to carry out management and the HOA would adhere to the objectives of the SPA where applicable and not in conflict with the Rules.
- When the amalgamation referred to above was completed, the HOA was disbanded, and the board that had been the HOA board became the first board of SPHM Ltd.
- At the time, a legal opinion made it clear that the property was a legal corporation and was not subject to the provisions of the SPA.
The Sublease is a Different Issue- The headlease is a federal agreement that is administered by Westbank First Nation as the lessor.
- The lessee is SPHM Ltd, our company.
- The sublease is an agreement between SPHM Ltd and our homeowners.
- This agreement did include a clause that referred to the SPA, but the company Articles and bylaws are the priority, and where they conflict, the company documents are applicable.
- Due to the difficulty of determining whether or not the provisions of the Strata Property Act would apply to various parts of the management of Sonoma Pines, and to protect the rights of our Homeowners, a great deal of work was done to incorporate many of the most important elements of the Strata Property Act into our revised SPHM Articles, which have now all been approved at the Board and AGM levels.
- The Articles and Bylaws of SPHM Ltd. provide the principles for management of the property and, in many instances, use the principles drawn from the Strata Property Act.
Head Lease and Subleases