Major repairs underway at a leaky condo in Vancouver.

Major repairs underway at a leaky condo in Vancouver.

Condo buildings dodge new disclosure rule

Depreciation report for stratas bring 'certainty' to aging condo buildings facing costly repairs

Many condo buildings in B.C. are believed to be opting out of a provincial government directive to get a depreciation report that gives owners and prospective buyers a warts-and-all assessment of deficiencies and expected long-term expenses.

Industry insiders believe many strata councils voted by a required 75 per cent margin to exempt themselves from the requirement, which was passed by the province in 2011 and took effect last December.

Mike Laporte, a partner with property appraisal firm NLD Consulting-Reserve Fund Advisors, estimated just 20 to 25 per cent of condo buildings have commissioned depreciation reports.

“That’s a guess,” he said, but added he’s heard similar estimates from competitors.

Buildings that have opted out must conduct new exemption votes every 18 months.

Laporte expects subsequent votes will result in more buildings eventually getting depreciation reports, putting additional pressure on holdout condo buildings to follow.

“Without the report it may appear there’s something undue to hide,” Laporte said.

He said some stratas think their building is in great condition so they don’t need a depreciation report, but don’t realize a good report can give them an edge over others when unit owners wish to sell.

The province amended the rules in the wake of the leaky condo crisis to shed more light on the physical condition of aging buildings and the preparations of their strata councils to cover the eventual cost of major repairs.

Laporte said some stratas initially worried about the cost of getting a report due to the high demand for them or that too few professionals were qualified to perform them.

Tony Gioventu, executive director of the Condominium Homeowners Association of B.C., is more optimistic about strata uptake, estimating 30 to 50 per cent of condo buildings now have at least commissioned a depreciation report.

He said the association is getting a few complaints each day from condo owners who can’t sell their units because their strata doesn’t yet have one.

Gioventu predicts the fallout for buildings without a report will extend to more stringent and costly terms – if not refusals – for prospective unit buyers from lenders and insurers.

While many strata councils fear bad news from the reports, he said the regulation change is good because it brings better protection for buyers and more certainty about future costs for owners.

“What we have is a rapidly aging housing stock coupled with low cash reserves, so we are seeing older buildings that have significant unanticipated special levies,” Gioventu said.

A 35-year-old Burnaby condo complex he visited last month is facing a $27,000-a-unit special levy to replace its decking and siding.

“It’s because they’ve ignored their building. They simply haven’t done maintenance in the last 15 years.”

A strata may not be on financial track to cover a $100,000 elevator replacement in 10 years time, he said, but at least a depreciation report will lay out what residents can expect.

“Everybody wants the same thing when it comes to real estate and that’s certainty,” Gioventu said. “The leaky condo issue was really about being the victim of a failure or an emergency. Depreciation reports help to eliminate that risk.”

He said he believes the number of stratas actually voting to exempt themselves from the new rules is less than five per cent.

Some others stratas are on a wait list for a report, he said, or plan to get one but haven’t yet raised the money.

James Balderson, a long-time advocate for leaky condo owners, said prospective condo buyers should insist on seeing a depreciation report if it exists.

The absence of a report should be a red flag, he said.

“If they don’t have one and they don’t want to know what the score is, why should you as a purchaser assume those risks without knowing what the risks are?” Balderson asked.

The provincial government provided more than $670 million in interest-free loans to help owners finance repairs to 16,000 leaky condos during the 2000s.

As for suggestions a second wave of leaky condos is on the way as depreciation reports expose unfunded building problems, he said the issue never really went away.

“There was only one primary wave from about 1980 to 2000, but the problem is only maybe half of them are properly fixed,” Balderson said. “There are plenty of problems you can still buy into.”

Just Posted

Chilliwack’s Jordyn Huitema, a member of the Canadian national women’s soccer squad.
Another scoreless draw for Chilliwack’s Jordyn Huitema and Canadian national women’s soccer squad

Canada played Brazil to a 0-0 tie days after doing the same in a friendly against the Czech Republic

FVRD surveyed public opinion on cannabis production and processing in the electoral areas. Odour and distance from residential areas were the top concerns. (Black Press file)
Cannabis production and processing rules being drafted by Fraser Valley Regional District

Data from public opinion survey will be used to guide cannabis-related land use

Robert Nelson, 35, died after being stabbed at a homeless camp in Abbotsford on April 7 of this year.
Mom pleads for information about son’s killing at Abbotsford homeless camp

Robert Nelson, 35, described as ‘man who stood for justice, honour, respect’

Police arrest the suspect in an attempted armed bank robbery on June 2 at the Scotiabank at Gladwin Road and South Fraser Way in Abbotsford. (Photo by Garry Amyot)
Abbotsford bank robbery suspect who was stopped by customers faces more charges

Neil Simpson now faces total of eight charges, up from the initial two

Black Press file photo.
COVID exposure recorded at Kent Elementary

Students, families encouraged to keep monitoring for symptoms

Canadian Prime Minister Justin Trudeau participates in a plenary session at the G7 Summit in Carbis Bay, England on Friday June 11, 2021. THE CANADIAN PRESS/Adrian Wyld
Canada donating 13M surplus COVID-19 vaccine doses to poor countries

Trudeau says the government will pay for 87 million shots to be distributed to poor countries

Kelowna-Lake Country MLA Norm Letnick, assistant deputy speaker at the B.C. legislature, presides over committee discussions. The legislature is completing its delayed spring session this week, with most MLAs participating by video conference. (Hansard TV)
B.C.’s daily COVID-19 infections dip below 100 over weekend

Only 68 new cases recorded Monday, four additional deaths

The BC Ferries website went down for a short while Monday morning following a provincial announcement that recreational travel between health authorities can resume Tuesday. (Black Press Media file photo)
BC Ferries’ website crashes in wake of provincial reopening announcement

Website back up now, recreational travel between health regions to resume as of Tuesday

The Kamloops Indian Residential School is photographed using a drone in Kamloops, B.C., Monday, June, 14, 2021. The remains of 215 children were discovered buried near the former school earlier this month. THE CANADIAN PRESS/Jonathan Hayward
Communities grapple with what to do with former residential and day schools

Some tear them down as a tool to help healing, others repurpose them as tools for moving forward

FILE – Provincial health officer Dr. Bonnie Henry talks about B.C.’s plan to restart the province during a press conference at Legislature in Victoria, Tuesday, May 25, 2021. THE CANADIAN PRESS/Chad Hipolito
B.C. watching U.K.’s COVID struggles but don’t think province will see similar pitfalls

Studies show that one dose of vaccine is only 33 per cent effective in preventing B.1.617.2 spread

Join Black Press Media and Do Some Good
Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

RCMP Const. Shelby Patton is shown in this undated handout photo. RCMP say that Patton was hit by an allegedly stolen truck that he had pulled over on Saturday morning in Wolseley, east of Regina. THE CANADIAN PRESS/HO, RCMP
Pair charged in Saskatchewan Mountie’s death make first court appearance

Const. Shelby Patton was hit by an allegedly stolen truck that he had pulled over Saturday morning

David and Collet Stephan leave for a break during an appeal hearing in Calgary on Thursday, March 9, 2017. THE CANADIAN PRESS/Todd Korol
Appeal Court rejects stay for Alberta couple facing third trial in son’s death

Pair accused in their earlier trials of not seeking medical attention for their son sooner

Most Read