What restrictions are there in the Bylaws? It is not uncommon for there to be restrictions on the use of strata property, such as rental restrictions, or pet restrictions. Some stratas will allow a certain number of rentals in the complex, sometimes expressed as a percentage of the number of units, 10% of units for example, or it could be a number, such as 10 units in the strata. If the intent is to rent it out, then this can pose problems for an investor, as people may already be on a waiting list to rent out their unit, and it could be quite some time before you are able to rent it out. Sometimes there is also a prohibition of pets, or the number of pets, as well as size and/or wieght, may be restricted. Even age restrictions are sometimes found, such as no one under 19 years, or no one under 55 years.
What is the amount of the monthly strata fee, and what does is pay for? Monthly strata fees can vary quite a bit, with about 30 cents per square foot being quite typical. Some strata will have extensive gardens, ponds, fitness areas, and even a pool, so sometimes the fees can get quite high. So, don't look at just the dollar figure; consider the amenities offered, and make sure it is well run, well maintained, and that sufficient funds are being set aside into the Contingency Reserve Fund (CRF) for a rainy day.
How much is in the Contingency Reserve Fund? There must be enough money set aside for inevitable repairs and upgrades. Sometimes, if there is not enough money in the CRF, then it will be necessary to assess a levy against the units to pay for some surprise events. For example, thinking back to the winters in the Vancovuer Area during the years of of 2007/2008 and 2008/2009 we had quite a bit of snow, so a townhouse complex may need to assess a levy to pay for the unusual amount of snow removal needed.
Are there any current or pending assessments? In the example given above, the assessment would likely be very small, but sometimes it could turn out that there are building envelope problems requiring extensive repair, and on a tall apartment building it may cost well into the millions resulting in a potential assessment of $30,000 to even $120,000. The 'leaky condo crisis' is not over yet, as many of the stucco buildings built in the 1990s are still needing rehabilition. This is not entirely limited strictly to stucco buildings, though, as all building envelope types have been known to experience failure.
How is the parking and storage locker designated? Parking and storage may be designated in one of several ways. It is common for the parking to be designated as 'Common Property" or 'Limited Common Property' (LCP). With common property, the space is owned jointly by all the owners, and the strata will assign the parking spaces to the units. This can present some problems, in that the seller is not able to promise that the parking or locker will be assigned to the next owner, hence the only way to be protected on this is to have the management company put it in writing that the buyer will be assigned the same parking space. Unfortunately, the management company does not always offer this documentation, but it would be very unusual that the strata not assign the parking to the new owner. With LCP, there is documentation proving that the parking or locker will be assigned to the new owner. Sometimes, the parking space may be owned, or it could be apart of a lease arrangement from the original developer.
Is there a warranty? A new building will have a 2-5-10 Warranty, with the two years covering items like plumbing and electrical, 5 years for the envolope of the building (water penetration), and the 10 years covering the structure of the building. An already lived in building that has been rainscreened as a part of a rehabilitation program may have a warranty against water penetration spanning 10 years. If the building is under warranty, the property management company should be supplying that with the strata documents.
It is important to always carefully review all of the strata documents, including the operating expenses/budget, and the two years of meeting's minutes. From this it is possible to see what the finances look like, how well the building being managed and how the owners feel about the building, plus how it has been performing and if it has been experiencing problems. It is the law that sellers must disclose any known problems, and REALTORS® ,being bound by a strict Code of Ethics, must also forward any material information they have about the building. However, many things will come up at the meetings that not everyone will know about unless they are at the meeting, or carefully read the minutes of every meeting, which not all owners do.
Having the unit inspected is also very important. A qualified inspector will point out any areas the need addressing, or are of concern. In most cases, the inspector will also have a look at the building, looking for signs of neglect and water penetration. Often, the boilers, roof and parking areas will also be looked at, to check on their conditions. The importance of a good inspection can not be understated.
| Under $250,000 | $250,000 to $300,000 |
|---|---|
| $300,000 to $350,000 | $350,000 to $400,000 |
| $400,000 to $450,000 | $450,000 to $500,000 |
| $500,000 to $600,000 | Over $600,000 |
| Apts Under $250,000 | Apts $250,000 to $350,000 |
|---|---|
| Apts $350,000 to $450,000 | Apts Over $450,000 |
| New West Townhomes | JordyBrisbin.com |
| New West Houses under $600,000 | Over $600,000 |
| Under $300,000 | $300,000 to $350,000 | $350,000 to $400,000 |
| $400,000 to $450,000 | $450,000 to $500,000 | $500,000 to $600,000 |
| Over $600,000 |
Jordy Brisbin
Sutton-Centre Realty An Independent Member Broker
3010 Boundary Road
Burnaby BC
604-839-2891
Sutton-Centre Realty An Independent Member Broker
3010 Boundary Road
Burnaby BC
604-839-2891
Vancouver and Burnaby Real Estate Agent
