HOMEFINDER: Stratas have benefits, but ask questions first
Nearly one-third of all residential properties in B.C. are strata-titled. That number can be even higher in urban areas such as Greater Victoria.
The sheer number of properties makes them a significant segment of the real estate market, one that comes with its own subtleties and considerations.
It’s important that people looking at purchasing a strata-titled properties such as condominiums – the most common – townhomes or duplexes learn ahead of time how the rules apply for that particular complex or building and how they might affect their lifestyle.
Sandy Wagner, president of the Vancouver Island Strata Owners Association and strata council secretary for the 94-unit building in which she lives in Saanich, says even existing residents have questions on how the strata bylaws relate to their unit.
“The truth is, they have to follow the bylaws,” she says, noting that sometimes people try to bend the rules. “They’re not cast in stone, they can be changed by (an agreement between) the owners. But sometimes (owners) don’t understand they have to live by the community’s rules.”
With the help of a real estate agent, and by doing some research, a prospective buyer can take steps to avoid conflicts down the road.
“One of the things most (agents) are doing now is providing their prospective purchasers with a couple years’ of strata minutes,” Wagner says. “It’s important to see what happens on a day-to-day basis.”
Strata fees, the source of questions for many buyers, collectively pay for property maintenance in the short and long term. They also help maintain shared amenities, such as a swimming pool or fitness facility.
“The affordability factor is what attracts buyers. You get a lot more for your dollar when you’re not paying for the yard and the roof and all that individually,” Wagner says.
The level of strata fees can also be an indication of whether a strata is putting away enough money for future major repairs, says Tim Ayres, president of the Victoria Real Estate Board. A knowledgeable agent can help buyers understand what expenses they might be looking at down the road, he says.
“If (fees are) too low, it’s not a good thing, because you’re just putting off maintenance,” Ayres says.
While some buyers might be attracted to low strata fees, especially if they’re not viewing a condo as a long-term housing solution, people with a longer-term approach find the presence of a strong financial plan more important, he says.
A related development came last year, when new B.C. legislation mandated that depreciation reports be filed every few years by strata councils on their buildings.
While some complexes have been slow to get the report done, she says, the document contains information critical to people on both ends of the sales transaction. The intent is to make very clear the long-term financial implications to owners.
“It outlines what the building owns, what the condition is and when they plan to replace it,” Wagner says. “The second part (explains) how they intend to fund it.”
Ayres, who looks at the report as a good tool, says many lenders are rejecting financing for purchasers looking at properties that don’t yet have a depreciation report done.
“It raises a red flag,” he says.
In his experience, the majority of larger property-managed complexes have already undertaken the task, but there are still some smaller, self-managed stratas out there that are holding off.
On the surface, purchasing a strata may seem more complicated than buying a detached home. But many agents in Greater Victoria are well-versed in this aspect of the market, Ayres says.
“When a Realtor has been selling mostly condos, they’ll probably know of any problems (a building has) had, be able to tell you the retail value and if it’s a good place for pets and children,” he says.
“It’s extremely important if you’re going to sell condos that you know about the processes and be able to spot things when you’re working with a buyer. You want to be able to advise them, especially if it’s their first home.”
Q: WHAT ARE SOME POINTERS FOR BUYING A STRATA PROPERTY?
Read the strata bylaws over first – Find out if new bylaws are being proposed at an upcoming annual general meeting or special meeting.
Be clear on parking – Find out whether the parking spaces are common strata property that can be reassigned, or are transferable by the seller to the buyer
Maintenance is key – Check to see if an engineering report has been done, or, if the building was a “leaky condo,” whether professional remediation has been completed
Be a legal beagle – Make your offer conditional upon your notary or lawyers’s approval.
Forms are important – Request a Form B (complete financial information on the strata) when making an offer on a strata property
GREATER VICTORIA MARKET UPDATE »
AS OF MAY 27/COURTESY VICTORIA REAL ESTATE BOARD
» 637 -- NET UNCONDITIONAL SALES, MONTH-TO-DATE
» 1,338 -- NEW LISTINGS THIS MONTH
» 4,646 -- TOTAL ACTIVE RESIDENTIAL LISTINGS