Conflict of Interest on Strata Councils: Rules and Disclosure

Strata councillors are unpaid volunteers, but they make decisions that move real money. A typical Sea to Sky council approves a meaningful amount of contractor work in a normal year, plus insurance renewals, bylaw enforcement, and the occasional special levy. The councillors making those calls are often a few doors down from the contractor's brother-in-law. The conflict of interest strata council BC rules exist to make sure those decisions are made for the corporation's benefit, not a councillor's. They live in Strata Property Act s. 32 and they're stricter than most new councillors realize. We've sat at hundreds of council tables since 2011 and the same conflict patterns repeat: the spouse who runs a landscaping company, the brother-in-law plumber, the councillor who happens to own the unit nearest the new bike room. Below is how disclosure actually works in practice, and how to handle it without turning council into a courtroom.

What the Strata Property Act actually requires

Section 32 of the Strata Property Act is short, but it carries real weight. It says a council member who has a direct or indirect interest in a contract or transaction with the strata corporation, or in any matter being considered by council, must:

1. Disclose fully the nature and extent of the interest
2. Abstain from voting on the matter
3. Leave the meeting while the matter is discussed and voted on, unless asked to be present to provide information
4. Not be counted in the quorum for that decision

The disclosure must happen before the matter is discussed, not after. A councillor who realizes mid-discussion that they have a conflict has to interrupt, disclose, and step out. The minutes should record the disclosure, the recusal, and the fact that the councillor was not present for the vote.

This rule applies to direct interests (you own the contracting company) and indirect interests (your spouse, child, parent, or business partner does). It applies whether the financial benefit is large or small. A $400 quote from a councillor's nephew is just as much a conflict as a $40,000 envelope contract from their spouse.

The contractor-relative situation

In small Sea to Sky communities, this is the most common conflict by a wide margin. Squamish, Whistler, and Pemberton are small enough that a councillor's family member runs a local trade business roughly half the time. The rule is not that those businesses can't be hired. It's that the related councillor cannot be involved in the hiring decision.

The cleanest workflow we recommend:

• The conflicted councillor declares the relationship at the start of any meeting where the matter might come up
• Another councillor (typically the treasurer or president) handles scoping and quote collection
• The conflicted councillor never sees the competing quotes
• The vote happens with the conflicted councillor out of the room
• The minutes record all of this

If the related contractor wins the bid, the strata still gets the benefit of competitive pricing and the councillor is insulated from any "self-dealing" accusation later. The CRT has ordered councils to refund payments where the s. 32 process was never followed, even when the work itself was done well and at market rates.

Real-world examples that catch councils off guard

Section 32 covers more than contractor hiring. Some less obvious conflicts we've seen:

• A councillor voting on a bylaw amendment that would prohibit a use only their unit currently engages in (or vice versa, exempting their use)
• A council president voting on enforcement against a tenant they personally rent to
• A treasurer who is also a real-estate agent voting on a Form B fee schedule that affects their listings
• A councillor voting on a parking-stall reassignment that gives them a better spot
• A councillor approving a contractor in which they hold even a small ownership stake (10% is enough)

The test is always: would I, or someone financially connected to me, gain or lose money based on this decision? If yes, declare it.

What "leaving the room" actually means

In a physical meeting, this is straightforward. The councillor stands up, walks out, and waits in the hallway until the vote is recorded. In a hybrid or fully-electronic meeting (now permitted under updated SPA e-voting rules), the councillor leaves the call entirely. Muting the microphone is not enough. The principle is that the conflicted councillor must not influence the discussion, even by being present.

The minutes should read something like: "Councillor Singh disclosed an interest in the matter (spouse is owner of ABC Landscaping), recused, and left the meeting. The remaining four councillors discussed the three quotes and voted unanimously to award the contract to XYZ Landscaping. Councillor Singh rejoined the meeting after the vote was recorded."

What happens when conflicts aren't disclosed

The consequences fall on two parties: the councillor and the corporation.

For the councillor, hidden conflicts can mean personal liability for any losses the corporation suffers. A councillor who steered a contract to a family member without disclosure can be ordered by the CRT or BC Supreme Court to repay the difference between the awarded contract and a fair-market quote. They can also be removed from council under bylaw enforcement procedures.

For the corporation, the contract itself may be voidable. The strata can apply to court (or in most cases the Civil Resolution Tribunal) to set aside the decision. That can mean unwinding work already done, recovering payments, and starting the bidding process over.

We've seen councils awarded envelope-repair contracts to firms owned by a council member's relative without disclosure, only to have the connection surface years later in BC corporate records. When that happens, the strata can recover the difference between the awarded price and a fair-market quote, and the councillor is personally liable for that amount.

How to build a clean disclosure culture

The healthiest councils we work with treat s. 32 disclosure as routine, not embarrassing. Some practical habits:

• Standing agenda item. Every council meeting starts with "Disclosure of conflicts" as item 1. Even if no one declares anything, the prompt is there.
• Annual written disclosure. At each first council meeting after the AGM, every councillor signs a one-page disclosure of all family-owned businesses, real estate holdings in the strata, and any other potential conflicts. Filed with the corporate records.
• Manager prompts. A good strata manager flags potential conflicts in advance. If a quote comes in from a contractor with a councillor's last name, the manager raises it before the council meeting, not during.
• Recusal is normal. Councils where recusal is rare are usually the ones hiding conflicts. Healthy councils have someone step out at least a couple of times a year.

For more on running disciplined council meetings generally, see our council meeting guide and our overview of strata voting rules. For a refresher on what council can decide alone vs what needs owner approval, see council vs owner powers.

When in doubt, declare

The cost of an unnecessary disclosure is zero. The cost of a hidden conflict that surfaces later is significant in money, in trust, and sometimes in legal liability. If you're wondering whether something counts as a conflict, the answer is almost always: declare it, let council decide whether you need to recuse, and move on.

Avesta's strata managers run conflict screening on every quote, every contract, and every bylaw vote across our Sea to Sky portfolio. If your council wants help building a clean disclosure process, get in touch, we'll show you the template we use.