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Geyser
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HUGE NEWS for older condos!

Sat Oct 10, 2015 12:07 pm

One of the looming problems for old condo buildings has been the need to obtain agreement from 100% of the unit owners before the strata corporation could be wound up and the building and land sold to a developer.

Not any more - now if 80% of owners agree, the deal can proceed. With the stroke of a pen the government has freed up thousands of development sites across the city and the Province which previously would have been almost impossible to assemble and redevelop. I am aware of situations where offers of double the assessed value have collapsed because of two or three greedy owners demanding even more.

If you own some run down old condos in prime locations, instead of looking at the Depreciation Report and pondering the costs of major repairs, you might find yourself pondering some very tempting "over market" offers from developers who want to win that 80% vote. Just remember to avoid being amongst the last holdouts because once the developer has the other 80% he won't need to be so generous with the holdouts.

STRATA PROPERTY LAW PROJECT—PHASE TWO

Media Release
BCLI welcomes reforms to rules on terminating a strata

for immediate release

Vancouver, 8 October 2015—Bill 40, which was introduced today in the Legislative As-­‐ sembly of British Columbia, contains proposed amendments to the Strata Property Act that will improve the rules governing termination of a strata corporation. The proposed chang-­‐ es are based on recommendations found in BCLI’s Report on Terminating a Strata, which is the first report issued in BCLI’s Strata Property Law Project—Phase Two.

“As strata buildings in British Columbia age,” said Patrick Williams, chair of BCLI’s Strata Property Law (Phase Two) Project Committee, “more and more strata owners will be con-­‐ fronted with the difficult decision of whether to renew or terminate their stratas. On behalf of the committee, I applaud this bill, which acts on the committee’s recommendations and, if enacted, will give strata owners a more realistic framework for considering termination.”

The key provisions of the bill reduce the voting threshold for authorizing termination from the unanimous consent of owners to the approval of 80 percent of all owners and set out a process for confirming the decision to terminate by the British Columbia Supreme Court.

BCLI’s Strata Property Law—Phase Two Project has been made possible by funding from the Real Estate Foundation of British Columbia, the Notary Foundation of British Columbia, the Ministry of Natural Gas Development and Responsible for Housing for British Columbia, Strata Property Agents of British Columbia, the Real Estate Council of British Columbia, the Real Estate Institute of British Columbia, the Association of British Columbia Land Survey-­‐ ors, the Vancouver Island Strata Owners Association, and the Condominium Home Owners Association.

The British Columbia Law Institute strives to be a leader in law reform by carrying out the best in scholarly law-­‐reform research and writing and the best in outreach relating to law reform.

Contact: Kevin Zakreski Staff Lawyer

(604) 827-­‐5336

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In fond memory of Taipan, a model of modesty, decency, dignity and tolerance. Long may we all prosper from the tremendous legacy of worldly wisdom and specialized real estate knowledge which he left in the "Arguments" thread.
 
Austin
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Re: HUGE NEWS for older condos!

Sat Oct 10, 2015 12:31 pm

Seems like a rather dramatic change.
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Geyser
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Re: HUGE NEWS for older condos!

Sat Oct 10, 2015 1:51 pm

Seems like a rather dramatic change.
No kidding! It could be a big game changer in the condo market.

It will be very interesting to see what impact it has on valuations of the really ratty old condo buildings that are sitting on highly desirable lots, the older three story condos in parts of the West End come immediately to mind. Suddenly the requirement of only assembling 80% of the units makes such deals much more feasable. Previously it was close to impossible to get 100% of the owners of a strata to agree to sell.

This change fixes one of the big deterrents to buying older condos. One single owner could force the other owners to continue maintaining a ratty old building which would be worth much more as a cleared lot.

Of course the downside is if the old building is in good shape, you aren't interested in accepting an over market offer and you don't want to move, you might be forced out by the other owners deciding it's time to dissolve the strata corporation.

This is going to be really interesting to watch. I just wonder why the MSM and the other realestate sites aren't all over this story. I really do think the implications are huge.
In fond memory of Taipan, a model of modesty, decency, dignity and tolerance. Long may we all prosper from the tremendous legacy of worldly wisdom and specialized real estate knowledge which he left in the "Arguments" thread.
 
scoobydoo
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Re: HUGE NEWS for older condos!

Tue Oct 13, 2015 11:44 am

Of course the downside is if the old building is in good shape, you aren't interested in accepting an over market offer and you don't want to move, you might be forced out by the other owners deciding it's time to dissolve the strata corporation.
This is where it will be interesting to see how the courts deal with this issue. What would be acceptable to the court as a premium over market value to force someone out of their condo?

I agree though, this will be huge.
 
Geyser
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Re: HUGE NEWS for older condos!

Tue Oct 13, 2015 3:00 pm

The Vancouver Sun ran a story on it on October 9th. It's quite interesting:

http://www.vancouversun.com/technology/ ... =66da-78a5
In fond memory of Taipan, a model of modesty, decency, dignity and tolerance. Long may we all prosper from the tremendous legacy of worldly wisdom and specialized real estate knowledge which he left in the "Arguments" thread.
 
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Dragonslayer
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Re: HUGE NEWS for older condos!

Wed Oct 14, 2015 10:19 am

Depends as well on Vacancy rates. I think some may rollover into Rental Stock for an indefinite amount of time. You can do anything once the Strata Corp dissolves right?
 
Geyser
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Re: HUGE NEWS for older condos!

Wed Oct 14, 2015 3:11 pm

Depends as well on Vacancy rates. I think some may rollover into Rental Stock for an indefinite amount of time. You can do anything once the Strata Corp dissolves right?
The purchaser should be able to do anything which the City will allow.

I doubt if many would be rolled into rental stock because the mandatory premium paid by the purchaser would mean that rents would be way less than carrying costs. Some may temporarily roll into rentals while the purchaser tries to assemble adjacent sites or flip to another developer, but long term conversion to rental seems unlikely.

It does raise a question about sitting tenants. Presumably they would need compensation. I'm sure there will be other unexpected issues too.
In fond memory of Taipan, a model of modesty, decency, dignity and tolerance. Long may we all prosper from the tremendous legacy of worldly wisdom and specialized real estate knowledge which he left in the "Arguments" thread.
 
thepress83
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Re: HUGE NEWS for older condos!

Mon Oct 26, 2015 2:58 pm

I wonder which buildings/areas will be most impacted by this? I agree the west end low rise buildings could be the most desirable depending on density allowed with current zoning. This may impact my decision and sway me towards buying into an older building for now with the possibility of it being sold in 5-10 years before huge repairs are needed.
 
Geyser
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Re: HUGE NEWS for older condos!

Mon Oct 26, 2015 4:37 pm

I wonder which buildings/areas will be most impacted by this? I agree the west end low rise buildings could be the most desirable depending on density allowed with current zoning. This may impact my decision and sway me towards buying into an older building for now with the possibility of it being sold in 5-10 years before huge repairs are needed.
I think numerous good areas are likely to benefit. You know what they say - location, location, location. That should be particularly important if the area has a lot of newer condos and not too many older ones left to redevelop.

I like the idea of buying something old at around $550 per sq. ft. Then selling it 10 years later for twice assessed value and using the money to buy some worth twice as much as my old assessment, and in a similarly desirable location. How bad can that be?

Come to think of it, a much younger person than me might be able to pull it off several times in their lifetime. Only problem for me is I'm not sure I'll still be breathing in another 10 years. Oh well, no complaints, c'est la vie. :lol:
In fond memory of Taipan, a model of modesty, decency, dignity and tolerance. Long may we all prosper from the tremendous legacy of worldly wisdom and specialized real estate knowledge which he left in the "Arguments" thread.
 
vanreal
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Re: HUGE NEWS for older condos!

Mon Oct 26, 2015 7:41 pm

This is not going to happen because of greedy owners. It's hard enough for developers to rein in the greed of 3 or 4 sfh homeowners to purchase land for increased density let alone a condo building with 20 greedy owners. Never going to happen.
 
thepress83
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Re: HUGE NEWS for older condos!

Tue Oct 27, 2015 6:52 am

Older condos already have things like size and location on their side so I agree younger buyers with good market insights could benefit from this. I would assume current/future zoning limitations would also play into things as far as what a developer may be willing/able to offer. You're right about areas with lots of newer condos already and little land left to develop.

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