Buying a condo in Vancouver means getting to grips with the concept of Strata ownership. For those new to home-ownership – or those buying a condo for the first time – understanding the complexities of strata properties is important. In this guide we look at the basic questions you need to ask when buying a condo in Vancouver.
Minutes and Reports
The Strata Council (a group made up of a number of owners within the Strata) is required to hold regular meetings and minutes for these meetings should be made available to potential buyers. The type of minutes available will include financial statements and those from annual general meetings (AGMs). Also ask to view the by-laws governing the Strata and any recent engineering reports. It's worth while asking to view all of these documents for a period of at least twelve months. In older Vancouver condo buildings consider viewing AGM minutes for a longer period.
Strata corporations governing condo developments in Vancouver and British Columbia have been required to produce “depreciation reports” since 2013. These reports should be produced every three years. For new buildings they must be produced within six months of the second AGM (so approximately within three years of the building's construction). For Strata corporations formed before December 2011 the first report was required by December 2013, with subsequent reports due every three years. Some exemptions apply and developments with four or less units are not required to produce a depreciation report.
The aim of the report is to allow the corporation to plan for upcoming repair and maintenance tasks and should cover an inventory of common property and assets, anticipated maintenance costs and financial forecasts to establish cash flow.
Maintenance and Contingency Funds
Maintenance can be approached in one of two ways – fix the problem when it occurs or by a program of preventative maintenance. The latter usually is the most cost effective solution. Check with the building manager/s as to which approach is used; the better investment in condos is usually where a sound preventative maintenance program is in place.
Strata regulations require that a proportion of the monthly strata fees are placed in a contingency fund to cover the cost of unexpected or urgent repairs. Find out how large this fund is and how it is invested. Compare this information against any details of upcoming repairs or required work covered in AGM's, financial reports, etc. If the funds cannot cover the cost of any work (planned or otherwise) you may be required to pay additional contributions to cover the costs of these extra repairs.
Inspections, Warranties and Reputations.
A home inspector is a must when buying any property and can be essential for condo buyers, in particular, and most lenders will require a home inspection report. Be sure to hire a fully accredited inspector and check that they are able to provide “error and omission” insurance. This will ensure you are covered for any issues which surface after you've bought the property, which should have been highlighted by the inspector. The report should cover the unit itself, common areas and the building structure. Your Realtor should be able to provide information on warranties covering the building and, importantly, may also be able to provide you with information about the developer of the building, including past projects and reputations! This information can be invaluable when making the final decision.
Strata ownership is increasingly popular in Vancouver and the Lower Mainland, with a range of developments offering diverse options for those looking for condos in Vancouver. From units designed for individuals and couples to full-size family units new developments are likely to make this form of ownership extremely common. For more detailed information on buying condos in Vancouver the Real Estate Board of Great Vancouver (REBGV) offers an excellent set of guides and consumer information.