We’re still building leaky condos
We received this PDF from Robert Funk, a building technologist who specializes in four story wood frame envelope failure.
Robert says that despite the Leaky condo crisis across the lower mainland we’re still building condos that will have water problems.
Here’s an excerpt and a few pictures from the PDF, download the full PDF here for the complete story.
“The way we’ve always done it”
Written by Robert FunkLeaky Condo remediation has come a long way in the last decade. In the last decade we have realized what a mess has been made and covered up in the walls of our homes. There are countless stories of heart break caused by financial devastation. First you purchase a home that you can afford and make payments on for the next 25 years in which time your building falls apart. Then comes the infighting of strata and owners, some for some against remediation. You pay a large sum of money, usually more than your original savings and down payment. Then for the next 18 months you live like a hostage under a tarp with loud apelike construction workers climbing in and out of your windows and banging on your walls. Welcome to Home Owner Hell.
I’m a building technologist and I specialize in Four Story Wood Framed Envelope Failure. This means I take buildings apart for a living. Things have changed allot, Rain screen,we discovered was used on 100 year old houses, (we never had to take them apart so it took a long time to discover this). Many more things have changed but some things have stayed the same and some have gotten even worse.
For years (at least 28) electricians have been installing Type 1 interior rated outlet boxes (electrical enclosures) on the outside walls of wood framed buildings. When I ask the electrical inspector about the box, they tell me “It’s ok because it is still inside”. Wow, the Type 1 box is inside the wall, so if and when (always when) the cladding, electrical cover or electrical cover gasket fails, the water now runs directly into the wall cavity. When I tell the inspectors this they say “It is not an electrical issue if the building leaks, talk to the building department”. I do and I have for five years and guess what, the building departments say “electrical box, electrical problem”.
That is just the tip of the Iceberg, here comes the really exiting parts and well some really boring code parts. Let’s get the really boring code references out of the way first.
- CEC = Canadian electrical code 22nd Edition 2012
- BCBC= British Columbia Building Code
- NRC=National Research Councel
- Electrical Safety Act 1998
- CSA= Canadian Safety Association
Order of rules and regulations
1. CEC 2-024 Approved electrical equipment
2. CEC 2-100 Approval markings
3. CSA C22.2 No. 18.2-6 Test for electrical boxes
4. Safety Standards Act BC Reg. 186/2009
5. Wet Location
6. Rule 2-400 Types of enclosures (boxes)
7. Rule 2-402 Markings for Wet Location boxes
8. Rule 12-3020 Basic rules for Damp Location boxes
9. Rule 26-702 Boxes exposed to weather
10. CEC Part 1 Sec 0 Page 7. Definition of Wet Location
11. CEC Table 65 Page 365, Enclosure Type, 1 through 6P
12. Rule 18-106(5) IP introduction
13. CEC Appendix B Page 441 Ingress Protection Rating
14. Rule 2-124 With reference to BCBC and building protection
15. BCBC Part 9 Section 9.25.3.2.6 Penetration of exterior walls
16. BCBC Part 9 Section 9.27.2.1 Building code Exterior walls
These are the three points that need to be changed and the code to back it up.
Non certified light mount over type 1 box. 4th floor, east facing. There were 14 lights on this 9 year old building.
1).The most basic rules of the CEC, in simple language states that all components in an electrical system must be certified (Rule 2-024). Certification is done by a company that is accredited by CSA. Electrical equipment is defined as any apparatus that is part of, connected too or near an electrical system of any kind. The Electrical Safety Act 1998 states Non Certified electrical products may not be displayed for more than 14 days or be sold or installed. These boxes must be tested to CSA C22.2 and pass.
2).The Types of electrical boxes vary from Type 1 for interior regular locations, Type 4 for exterior walls, Type 6P for under water locations. Ingress Protection (IP) is a rating that defines where a box can be installed.
3)The building code and electrical codes dance with each other when it comes to maintaining the Air Barrier and maintaining the Fire Barrier.
This is what has gone wrong and needs to stop.
This is a Typical Type 1 box installed inside and outside. Not much damage to the building but the water ingress rusted the nails and the plug. The plug started to short out because it was so rusted. Not to worry, Leaky Condos don’t burn down, nope, too wet.
The electrician installs a TYPE 1 (interior rated enclosure) outlet box inside the insulated wall cavity. Rule 2-400 of the CEC says all electrical enclosures on an exterior wall must be Type 4, IP44 or say “Wet Location”.The box they install is only rated interior so that’s why they put the box in the wall.Next the siding contractor installs one of several different, cheap, not legal (as defined by Rule 2-024 CEC) extension boxes (CSA C22.2 No.18.2-06).
The electrician cannot remove the extension box because the siding is already on, so he just uses 3 inch wood screws and puts the plug and cover on.I have lots of pictures of the rot that occurs when the wood screws loosen, snow piles up or rain comes down and leaks rite into the wall cavity. Outside lights are even better because the light is heavy so when the #8 wood screws loosen, the light leans forward and now it works like a funnel. Note: plug screws are #6-32 and lights are #8-32.
Don’t understand why they are still doing things this way?
Welcome to The birthplace of leaky condos.
“But that’s the way we have always done it”
Here’s the full PDF with more pictures and relevant building code.
August 6th, 2012 at 1:14 am 1
10 points to anybody who reads this the whole way through.
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August 6th, 2012 at 2:44 am 2
China’s answer to subprime bets: the “Golden Elephant”
(Reuters) – The Chinese investment vehicle known as “Golden Elephant No. 38″ promises buyers a 7.2 percent return per year. That’s more than double the rate offered on savings accounts nationally.
Absent from the product’s prospectus is any indication of the asset underpinning Golden Elephant: a near-empty housing project in the rural town of Taihe, at the end of a dirt path amid rice fields in one of China’s poorest provinces.
http://www.reuters.com/article/2012/08/06/us-china-banks-idUSBRE87501T20120806
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August 6th, 2012 at 8:02 am 3
@Vote Down The Facts: stupid bears will read the whole way through. it’s the only way to kill time!
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August 6th, 2012 at 9:26 am 4
After reading this I don’t think I’ll ever want to own a condo. We need to get mike Holmes on this!
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August 6th, 2012 at 11:30 am 5
The land keeps appreciating so who cares.
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August 6th, 2012 at 1:19 pm 6
@midnite toker:
You mean Mike Holmes, the bubble denier?
What made prices drop in the US is that market prices were simply too high, which is the same reason for price drops everywhere.
Note that Holmes lives in the Toronto area. Toronto saw a mild downturn in the 80′s. Their bust of the 90′s was much worse and comparable to the Vancouver bust of the 80′s. Of course, I don’t know whether Holmes is getting his dates wrong and is really talking about Toronto in the 90′s as a “worst case”.
http://www.canadianbusiness.com/article/65693
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August 6th, 2012 at 2:07 pm 7
I love this blog..we all live here cause it’s so amazing but then find weird ways to complain about it..or some weird way to get real estate to become affordable. If you guys can’t afford to buy then just rent. Spend your time making more money than wasting time here and never being able to afford to buy.
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August 6th, 2012 at 2:21 pm 8
@Vote Down The Facts: Yeah man, why bother getting informed or trying to change things? That sounds like too much work!
Just go out and buy a condo and get another loan when the repair assessment comes in, that’s the way we do it here right?
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August 6th, 2012 at 2:24 pm 9
@Jeff: i don’t live in vancouver, but I read this site for the same reason I read the US bubble blogs. The insanity is entertaining. I just heard of someone who bought a house in east van with 7 other people! Dude, you’re signing up for a mortgage with roommates? Yeah that ought to work out, good luck with that!
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August 6th, 2012 at 2:30 pm 10
I just called Vancouver amazing and got foreclosed on!?
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August 6th, 2012 at 2:36 pm 11
Vancouver sucks
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August 6th, 2012 at 3:25 pm 12
@Nex: I agree. I think it’s crazy that roommates would purchase property together. I’ve had lots of roommates in my day and it never seems to work out. I can’t imagine being stuck to a roommate for 25 years for a mortgage!
Vancity Credit Union actually has a mortgage product specifically designed for roommates. It’s called the “mortgage mixer”. From the Vancouver Sun:
“Vancity also has a “mixer mortgage” where roommates can go together to buy a home they wouldn’t be able to buy otherwise. ‘It also works well for parents and children, because the parents can own part of the home as an investment, while it helps the child get into the market,’ McKinley said. “It definitely helps people get into the market younger.’”
http://www.vancouversun.com/business/mortgages/home+buyer+bonus+sure+spur+first+timers+mortgage+expert/6302642/story.html
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August 6th, 2012 at 3:35 pm 13
@Joe_Blown_Away_By_High_Housing_Costs:
They would eagerly sell the heavy drugs if they could to make a profit.
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August 6th, 2012 at 4:57 pm 14
[Anecdote from Chinese RE Forums]
This recent immigrant just had a home inspection. The home inspector said business now is down 80% vs last year, even worse than 2009.
“Most locals who can buy already bought”. Business is so slow he took some time off for vacation.
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August 6th, 2012 at 5:55 pm 15
@Joe_Blown_Away_By_High_Housing_Costs: No way banks would go near that product without the CMHC backing it up. Those mortgages are almost guaranteed to implode, and if the value of the property has dropped – lookout.
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August 6th, 2012 at 6:15 pm 16
@Jeff: they all bitched about Van and yet only one guy moved to ottawa!
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August 6th, 2012 at 6:37 pm 17
@Eddie:
Their FAQ doesn’t mention it, but I’m sure that VanCity and CMHC would require “joint and several” liability from all the borrowers. What that means is that the lender has the right to go after the full balance from any of the borrowers upon default. So go ahead, put your financial future in the hands of your buddies.
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August 6th, 2012 at 7:20 pm 18
@patriotz: Smart. More pockets to get the money back out of in the end. I can see why they would push these mortgages out to groups of people stupid enough to take them.
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August 6th, 2012 at 7:27 pm 19
@patriotz: So they all have to claim BK or they go after the ones that don’t? Interesting.
Sadly I now expect violent assaults to increase with our crash…
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August 6th, 2012 at 8:35 pm 20
Does anyone else find this site hard to read on the ipad?
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August 6th, 2012 at 8:47 pm 21
@VMD:
Everyone who could buy already bought. Except me!
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August 6th, 2012 at 8:49 pm 22
Need bumper sticker: “I’m voting liberal because I hate them.”
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August 6th, 2012 at 8:51 pm 23
@ HFHC
I think the designers want the advertising to stay visible on the screen which leaves a more limited area for comments.
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August 6th, 2012 at 8:58 pm 24
The other thing to note in photos is the OSB plywood used (the rotten part). Most new houses and condos today are built out of OSB in BC. The stuff works fine until it gets wet. Then it goes moldy, rots and falls apart very easily. Not a good feature to have in a wet environment and in any building for that matter. Any flood or leak or humidity problem will cause major damage. There is no comparison to plywood getting wet which still holds up very well. The thing is OSB only cost a few dollars per sheet less but makes the whole building junk. So builders save maybe a few thousand on a large house to use OSB. Once it is built you cant change it. For anyone looking for a house or condo don’t touch the ones built from OSB which are 90% of them over the last 10 years. You can see them going up everywhere. Just check in the attic or crawl space to see what material they used. It is hard to believe people are paying 700k to over a million for these houses which will last 20 years max.
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August 6th, 2012 at 9:00 pm 25
@Anonymous: “I think the designers want the advertising to stay visible on the screen which leaves a more limited area for comments.”
It is about as effective as pop ups. It means you don’t visit the site and that is not good for advertising.
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August 6th, 2012 at 9:12 pm 26
@patriotz: Holmes is a smart guy and it shows how hard it is to see beyond your immediate locale with any perspective. 1, not issuing loans in excess of value is meaningless, but he doesn’t grasp that because until you see a downturn you can’t grasp how fluid the idea of “value” is. Because it’s badly confused with “price”, which is a stunningly unrelated number.
2, you don’t need subprime to have a housing bubble, you just need mortgages being issued in amounts in excess of rising fundamentals. That’s it. Holmes can’t grasp that either. But, frankly, few do, until they learn it the hard way. Leverage is not something human instinctively understand.
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August 6th, 2012 at 10:23 pm 27
@patriotz: you are smart enought you could not survive here. how has ottawa worked out for you? why do you still have so much interest in van?
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August 7th, 2012 at 12:01 am 28
Do you people hear yourselves? There is no proof that anyone bought a place in East Van with 6 other roommates. I don’t buy about 95% of what you guys are trying to sell on here.
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August 7th, 2012 at 12:37 am 29
@Jeff:
“I don’t buy about 95% of what you guys are trying to sell on here.”
Then why are you here? If you get off on reading bullshiat you should go entertain yourself reading the latest real estate press releases, and watching Global.
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August 7th, 2012 at 5:48 am 30
@29 Crikey Says:“Then why are you here?”
They always show up when the market shudders. Mindless non sequiturs like “you could afford Van’s specialness if you worked harder” are classics straight from the 2008 RET playbook.
Relax and enjoy the show.
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August 7th, 2012 at 8:10 am 31
Despite signs of cooling housing market, Toronto developers keep building
Yet another “don’t say you weren’t warned” from Jim.
But the developers aren’t really that dumb. Pre-sale buyers are bound to complete no matter what and the developers can go after their assets if they don’t. If the numbers come out positive factoring in an expected decline in market price for the remaining units, they will build.
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August 7th, 2012 at 9:38 am 32
Hi guys,
It’s been quite some time since I posted, just got back from a 3-week vacations in France, sweet… Spent some time at a friend’s place in a little village, the house is just 600 years old!
Nice to see that sales #s are still as poor as when I left. We’re in the full collapse mode now, we just have to enjoy the downhill ride. Where are all the bulls BTW?
Anyway, upon my return, I got back straight to reality and I’m in need of advice. Just before I left, I sold my sofa. I used the elevator for like 5 minutes to bring it down to the buyer without warning the obnoxious concierge. I didn’t damage anything. This asshole reported me to the strata council and they are now fining me $200 for that. This is just ridiculous.
What would you advise to do in such a situation?
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August 7th, 2012 at 9:39 am 33
@patriotz:
Toronto Condo ‘Roller Coaster’ Peaks as Flaherty Acts
“Canadian Finance Minister Jim Flaherty is making progress in his effort to cool Toronto’s overheated condo market with tougher mortgage lending rules.
Condo sales dropped 10 percent in July from a year earlier to 1,753 units and the average price fell 1 percent to C$328,216 ($328,347), the city’s real estate board said Aug. 3. Prices have fallen 11 percent since February, according to Bloomberg calculations using Toronto Real Estate Board figures, and were little changed in July from a year earlier, ending annual price gains that peaked at 22 percent in October.”
Read the full article at:
http://www.bloomberg.com/news/2012-08-07/toronto-condo-roller-coaster-peaks-as-flaherty-acts-mortgages.html
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August 7th, 2012 at 10:05 am 34
@Makaya: “What would you advise to do in such a situation?”
What rule are they saying you broke?
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August 7th, 2012 at 10:07 am 35
@Makaya:
I’d look deep into their rules and regulations for a loop hole.
Fight it to the bitter end.
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August 7th, 2012 at 10:11 am 36
@Makaya:
This is one of those situations where you have to swallow your pride, going in guns a blazing will not do you any good. Go to the next strata meeting, thanks everyone for their service to the building blah blah blah. Then politely ask for a warning instead of a fine as it was an innocent mistake.
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August 7th, 2012 at 10:23 am 37
@Makaya: you probably violated one of the stata rules, so pay the damn fine.
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August 7th, 2012 at 10:29 am 38
A lot of hacks posting on here today. Typical, no substance, just personal attacks on bears
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August 7th, 2012 at 10:41 am 39
32 Makaya Says: “Spent some time at a friend’s place in a little village, the house is just 600 years old!”
If it’s true that long term real estate always goes up, your friend must be a Rothschild. 600 years of appreciation!
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August 7th, 2012 at 10:51 am 40
Someone really needs to take this information that Mr. Funk kindly put together for the public into an easy to use quick reference guide of some sort that buyers can use to quickly and decisively detect poorly built buildings and quickly move on to other potential options in the market without fear of having a $40,000 + fee 10 years down the road.
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August 7th, 2012 at 10:54 am 41
@Makaya:
Aren’t you a tenant? I would think the strata has no power to assess you for anything, just the owner. Whether the owner can get the money back from you I don’t know, but is worth investigating.
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August 7th, 2012 at 10:59 am 42
@patriotz and @midnite toker, re the Holmes quote, “People are not being loaned more than the value of a house”
Why do fools give credibility to clever sentence constructs that appear to reflect “fact” but don’t reflect “truth”? String a few words together in a clever sentence and someone will believe i. Dang it p*sses me off.
I give more credence to the statement, “Spaghetti grows on a farm two inches wide and two miles long.”
The value of anything is what someone is willing to pay for it. The debt obligation is fixed, the value in this can go down, is going down and will continue to go down.
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August 7th, 2012 at 11:02 am 43
@Eddie, “Sadly I now expect violent assaults to increase with our crash…”
Bad stuff really is going to happen, both for individuals and families, as people come to terms to with the idea that they’ve been living with illusion/delusion. Really bad stuff.
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August 7th, 2012 at 11:17 am 44
@Dan in Calgary:
“The value of anything is what someone is willing to pay for it.”
No, that’s the price.
“Price is what you pay, value is what you get” – Buffett.
Either Holmes was being deliberately obtuse or (more likely) he simply didn’t know what he was talking about.
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August 7th, 2012 at 11:17 am 45
@Makaya: You own your condo?
…The letter that the strata sent you should identify which strata rule you broke– so check the strata bylaws to see if you actually broke that rule. If it doesn’t say which rule you broke, then check the rules yourself. If there’s no rule, or if you didn’t break the rule, send a letter to the strata asking for clarification and/or consideration.
If you did break a bylaw and it’s a first offense, point that out. $200 is pretty heavy-handed for a first offense. Usually a first offense doesn’t warrant any fine. And a second offense is usually something small, like $50.
Ask to attend the next strata meeting to plead your case (be nice!). You didn’t damage anything, so there’s no cost to the building. Promise not to do it again (assuming you broke a strata bylaw).
If the strata won’t change your fine to a warning, or if they won’t reduce it to a level that you can live with, then it’s time to be a pain in the ass to the strata council and property manager. Make it a pain to be on strata; make them regret not giving you leniency. Try some of the following:
-Demand a copy of all previous strata council decisions for other fines. You’re an owner, you have a right to hear the business of the strata. And you deserve fair treatment– has any owner ever gotten a first-offense warning before? If so, you deserve it, too.
-If every first offense has resulted in a $200 fine, then start nit-picking on your neighbours– the more people being hit with stupid fines, the more people who’ll be angry at the strata council. Wander through the parking lot, and note every stall that has an oil stain– the owner’s car probably drips oil, and that’s probably a bylaw violation. Wander the outside of the building and note everybody who has window shades of a colour other than white or ivory– that’s probably a strata violation. Is anybody storing anything on their balcony? When you send the letter in, ask to attend the next strata meeting. Strata is obligated to act on every strata violation– you can’t selectively enforce the rules. If they start rolling their eyes, or choosing that those violations are minor, then tell them that they are obligated to act on your complaints, but if they rescind your fine, you’ll take back the complaint letter.
-Don’t pay the fine. The strata can’t charge interest on fines, and I don’t think they can foreclose on fines (and if they do move to foreclose, just pay the fine then).
-Nit pick. Complain in person to the strata president (show up at their door during dinnertime). Complain in person to the strata vice-president. Complain in person to the treasurer.
-Nit pick. Demand a copy of the building’s finances/accounts. Ask to review service contracts (eg, the concierge’s contract). Nit pick anything you find that’s out of line, or unusual, or whatever. See if the concierge takes breaks longer than their contract allows.
-Nit pick. Complain to the strata about that stain on the hallway carpet. Or the scratch in the elevator. Complain in person to the strata president. Complain in person to the strata vice-president. Complain in person to the treasurer.
-Nit pick. There’s algae on the side of the building! It must be cleaned up!
Of course, if you’re renting the place, the fine is probably your landlord’s to pay. Landlords can’t fine tenants; they can only charge actual costs of repairs. Of which there were none.
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August 7th, 2012 at 11:32 am 46
@M-: “Of course, if you’re renting the place, the fine is probably your landlord’s to pay.”
Is that really true? What about Form K?
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August 7th, 2012 at 11:47 am 47
@M-: Fines would come out of the damage deposit. Great idea about being annoying, but strata councils have the authority not to apply fines evenly, as unfair as that sounds.
Ultimately the best way to annoy councils is to write as many individual (and lengthy with complicated phrasing) letters as possible that are required to be dealt with at meetings. Councils are comprised of volunteers; if the length of meetings is extended it will become an additional annoyance. If the complaints brought to the strata’s attention are legitimate but ignored it will be minuted and ultimately a red flag to prospective buyers.
But ultimately this is a strategy to remove the fine. It needs to be made clear to the council in some way that the pain will stop once the fine is “reconsidered”.
Also read this:
http://rightsandremedies.blogspot.ca/2009/02/how-to-fight-strata-fine.html
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August 7th, 2012 at 12:01 pm 48
@Anonymous: So, if not OSB plywood, what wood material is good for construction?
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August 7th, 2012 at 12:03 pm 49
Heads-up: there are two new fresh, dripping-with-misery posts at landlordrescue.ca.
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August 7th, 2012 at 12:04 pm 50
@Makaya: And then there’s this:
http://www.fic.gov.bc.ca/pdf/responsibilities_strata/guide14.pdf
If council did not solicit feedback from you about issuing the fine, they did not follow proper process and the fine is unenforceable. They can reconvene and re-do the process properly, involving you this time, but ultimately they need to follow proper process.
The relevant section of the act (sect 135) is
The trick is to write a letter in a way that makes it sound like a long and arduous process to get the fine to stick, and give them an “easy out” by assuring them the infraction will not occur again. My two cents.
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August 7th, 2012 at 12:12 pm 51
@gokou3:
Plywood is best, large thin sheets sandwiched together create a somewhat more effective barrier against moisture.
OSB is “oriented strand board”, small thin woodchips and glue of which there are many nooks and crannies for moisture to penetrate.
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August 7th, 2012 at 12:22 pm 52
@ gokou3
Most of what anonymous wrote about OSB is wrong. OSB may not look as good, or be as strong as plywood but it is a perfectly functional sheathing product. OSB and plywood are made from the same basic components (wood/glue/wax(in the case of OSB)), both will get mouldy and rot if exposed to excessive moisture. Of course, this shouldn’t be an issue if a structure is designed and built correctly.
A note on cost. It’s true that currently plywood only costs about twice as much as OSB, however I can assure you that if OSB (or something comparable) didn’t exist the price of plywood would be astronomically high. This is because the wood fibre required to make plywood (large, straight relatively clear logs) is in short supply.
Full disclosure, if I’m building a small project I usually grab plywood because I prefer working with it, however I’d have to think twice for a large structure due to cost considerations.
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August 7th, 2012 at 12:30 pm 53
@patriotz, “No, that’s the price. “Price is what you pay, value is what you get” – Buffett.”
You right
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August 7th, 2012 at 12:31 pm 54
@patriotz, “No, that’s the price. “Price is what you pay, value is what you get” – Buffett.”
You right
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August 7th, 2012 at 12:55 pm 55
Richmond update – V953023 – 3560 Vinmore.
This is essentially a new build. I would call it a “Richmond Special”. This is where your “typical” builder in Richmond buys the teardown, builds a new house (intended for HAM) then lives in it themselves for a bit of time and then tries to sell it. I suppose that allows them to get principal residence exemption and possibly no HST on the sale. Anyhow, here’s the stats.
Bought the property bare land in April 2010 for $762,000 plus costs for total of approx. $777,000.
Taxable building costs appear to be $750,000 (which I would expect is plus HST or $840,000 total).
Taxes are $6,500 per year and let’s assume a 3% holding cost on the invested funds. After considering an estimated monthly average invested capital and doing monthly compounding, this is approximate 100,000 in interest to carry this property for the 28 months it was owned.
Total cost for this property is $1.717 Million. This property would have sold for $2 million at the peak of the Richmond market. However, this property was listed for $1,880,000 in December. After 4 price changes, it sold for $1,595,000. After considering closing costs of approximate $55,000, the net proceeds would only be $1,540,000.
Loss is $177,000. Assessed value was $1,691,000.
There are many of these properties for sale like this. A new bar has been set lower yet again. Good luck to the remaining spec builders who are hoping to at least get their money out on a break-even basis.
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August 7th, 2012 at 1:13 pm 56
If you have the time I recommend filling out this survey:
https://www.placespeak.com/topic/362/mayors-task-force-on-housing-affordability/
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August 7th, 2012 at 1:20 pm 57
Are you guys just trying to make each other believe your crap? And when someone doesn’t believe the crap then you vote it down? bahahaha
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August 7th, 2012 at 1:21 pm 58
“The owner or tenant to whom the complaint is directed must receive prompt written notice about the complaint from the strata council. Not only that, but as Section 135 (1e) of the SPA states, the owner or tenant must be given enough time to address the complaint before the strata council can begin to impose any fines. The required process may take a lot of time before any fines can be collected, but if this process isn’t followed to the letter, the strata council may lose out on any fines that owners would otherwise have to pay. ”
http://www.bruceward.com/vancouver-real-estate/rental-property/strata-council-strategies/
$200 is ridic, when I was on strata that was the max we could fine, it was anywhere between $50-$200 and on my entire 10 years being on strata we only fined one asshole $50…..we always just gave warning letters, the one $50 fine was only issued after he ignored our warning letter.
what was the issue anyway? was padding supposed to go up?
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August 7th, 2012 at 1:49 pm 59
Thanks guys, these are awesome materials that you gave me. The way I see it is that the strata didn’t follow the proper process as I didn’t receive any proper notice and didn’t get any chance to address the complaint.
I think I have a case to tell them to GFT
BTW, that was a first time I had to deal with such matters. I’m currently renting but moving out of the province at the end of August.
Thanks again, I really appreciate your help.
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August 7th, 2012 at 2:24 pm 60
Not much money in things that don`t break down.
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August 7th, 2012 at 2:41 pm 61
@ZRH2YVR: Thanks for the update. Some quick questions. How did you estimate the $750k for building cost? What costs more, materials or labor? Is it likely that the builder is indeed paying all taxes on the build cost, or are there a lot of cash deals?
Thanks for any insights you can share.
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August 7th, 2012 at 2:44 pm 62
I have updated the crash curve graph at:
http://vancouverpeak.com/groups/data-hounds/forum/topic/crash-curve-graphs/?_wpnonce=a7a8c18918#post-2531
I incorporated suggestions from some of you you and the graph now compares the Vancouver decline with one US market – San Diego. I have included three different methods of measuring the Vancouver market so you can pick your favorite.
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August 7th, 2012 at 2:56 pm 63
Garth Turner in Vancouver on August 20th:
”
What’s about to happen to real estate probably won’t differ from that meltdown on the stock market. On the way up, with risk rising, investors were horny to buy. On the way down, as risk fell, they were desperate to escape. The greatest selling happening at the bottom, when risk tanked. On March 9th, 2009, millions of people were decimated as they fled stocks and mutual funds. On the same day, thousands of others bought the deals of their life. Contrarians rocked.
What happens next, and how to harness it, is the key. It’s what I’ll be talking about in a few places over the coming month or two.
The first stop’s Ground Zero – Vancouver on Monday evening, August 20th. If you’re interested in this stuff, then come and talk about it. The event is free, and I now have a location for you:
Pinnacle Ballroom
Marriot Vancouver Pinnacle Downtown
1128 West Hastings (between Bute & Thurlow)
Yesterday about 700 people signed up, but there’s still room. Doors open at six and the dancing Amazons begin at seven. Bring your Bics. And your idiot BIL with three houses. Reserve a seat or two by using the link below, and you’ll receive an email confirmation:
https://planetcast.wufoo.com/forms/x7x1x7/
”
I hope some of the blog dogs here will come. Because I am sure the place will be packed with disgruntled RE agents
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August 7th, 2012 at 3:33 pm 64
@AfroFrancophone: And don’t forget to bring cash to buy Garth’s books, … because that’s what this “free” event is all about!
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August 7th, 2012 at 3:43 pm 65
@Makaya: If you are moving out at the end of the month things are a bit more tricky. I don’t know how best to proceed because the LL may withhold some of the DD from you if he/she thinks there’s an outstanding fine to be paid. If they’re unaware of the fine best you get your DD cheque and inform the strata in writing after you get the money their fine is invalid. That way the LL has to come after you for the difference and $200 isn’t worth it. If the LL is aware of the fine and withholds even after you inform the fine is invalid, you will have a more difficult time of it because you’ll be out of the province.
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August 7th, 2012 at 3:45 pm 66
Burnaby sold 5 homes in July at 1.4M+
There are currently 154 homes in Burnaby listed at 1.4M+
MOI = 30.8
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August 7th, 2012 at 3:45 pm 67
@Anonymous: Well, if he uses events such as these to market his books, I’m totally cool with it. Nothing comes free in this world, I agree with that. I’m willing to spend a couple of hours listening to a dude who has been calling this RE crash for a quite some time now, and whose investment advises actually make some sense…
I’d be in a bar somewhere or watching a movie otherwise.
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August 7th, 2012 at 3:48 pm 68
@AfroFrancophone: Not only has he been “calling this RE crash” for a while, … it has always been just around the corner, and for years and years he has been flat out WRONG. I wouldn’t waste my time or money on him.
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August 7th, 2012 at 4:07 pm 69
@jesse: If Makaya broke the rules, shouldn’t he be the one paying the fine rather than trying to stiff his landlord? What do you guys have against landlords anyway? They are the ones enabling you to sit on the sidelines waiting for the crash, bearing all the risks associated with ownership. Makaya, be a man, pay the fine!
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August 7th, 2012 at 4:18 pm 70
@Anonymous: So, let me get this straight: you’re voting me down because you think it’s okay for Makaya to weasel his way out of fulfilling his obligations under his lease?
Let me modify my comment: Makaya, challenge the fine, but don’t stiff an innocent landlord. If you think he owes you anything, go about it the right way and talk to him.
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August 7th, 2012 at 4:19 pm 71
@Anonymous:
Landlord != Strata council. Now read Makaya’s original post and the replies again.
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August 7th, 2012 at 4:25 pm 72
@Anonymous:
Landlord should have let him now about the strata rules when moving a sofa out and state that in contract. If anyone has to pick up the tab it should be the landlord. It will be just another business expense for him but he’ll learn the lesson and next time be more diligent when drafting a contract.
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August 7th, 2012 at 4:26 pm 73
@oneangryslav2: Okay, as you suggested, I re-read the original post. It doesn’t say the strata council is the landlord.
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August 7th, 2012 at 4:26 pm 74
@oneangryslav2:
It’s possible the resident who saw the couch and reported him assumed that he was doing an unauthorized move-in/move-out (which often comes with a non-refundable fee), in which case it’s easy to show that no change in occupancy occurred.
If there’s a general by-law about use of the elevators for moving furniture, and that the concierge needs to be informed so that padding can be put up, then moral thing to do is pay the fine.
Either way the strata needs to tell them which bylaw they’re being fined under.
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August 7th, 2012 at 4:28 pm 75
@Chabar: I bet the lease says something about the tenant having to abide by the strata bylaws. I doesn’t need to be so specific as to spell out every rule.
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August 7th, 2012 at 4:33 pm 76
@Anonymous:
As Jesse has pointed out, the strata itself has not observed the law of the land, so there is no fine to pay. And the burden is on the strata to obey the law, not on the tenant to spell it out to them.
This sounds to me like outright harassment of a tenant by the strata.
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August 7th, 2012 at 4:41 pm 77
@Anonymous: “I bet the lease says something about the tenant having to abide by the strata bylaws. ”
That’s what Form K is for.
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August 7th, 2012 at 4:44 pm 78
@patriotz: harassment … or maybe just an innocent procedural oversight. People on strata councils are not lawyers; just regular owners, often pushed into roles they don’t really want. Either way, Makaya should be upfront rather than a weasel. Challenge the fine, but don’t leave it to the landlord to pay. With real estate prices as they have been, the owner is probably not raking in significant profits, and doesn’t need dishonest tenants to make it even worse.
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August 7th, 2012 at 5:01 pm 79
@bcj:
Yes they are both made of trees but very different products. OSB is one notch up from cardboard which is also derived from trees. Try using OSB on your outdoor deck and see how long it lasts. Ever wonder why it is not used is such places but plywood is? Like I said OSB works fine until it gets wet. At some point every building is going to have a leak or moisture problem. It starts when the house is built. Ever seen a house being built in BC and not get wet during construction?
Here is a good article on it. See Photograph 1: OSB versus Plywood and let me know which one you want your house built from. The cost difference is just not worth it.
http://www.buildingscience.com/documents/insights/bsi-027-material-view-of-mold/
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August 7th, 2012 at 5:02 pm 80
@Anonymous: Wait a minute. There’s a building where you can be fined $200 for moving a couch in the elevator without causing any damage?
And I didn’t realize we’ve already hit the ‘poor landlord’ phase of the crash, that was fast!
Tenants are a normal risk of being a landlord. That’s why you budget for that risk unless you’re just hoping to recoup losses by selling for capitol gains.
If people on strata councils don’t want to be there and are pushed into roles they don’t want maybe they should have thought about that before buying into a strata?
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August 7th, 2012 at 5:08 pm 81
@Anonymous: “People on strata councils are not lawyers”
But they have a property manger who is the person who issues the fines and writes the letters who should know better. Likely the council overruled him/her.
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August 7th, 2012 at 5:15 pm 82
@grypnt: We’ve been in a “poor landlord” phase forever, and it has nothing to do with RE prices coming down. The price/rent ratio has long been out of whack, which means being a landlord has not been a particularly profitable business for a long time (unless you bought before prices started climbing out of control). Being a RE bear should not equate to being anti-landlord. Most landlords operate with an extremely slim (if any)profit margin, with a legislative scheme that is generally very favorable to tenants.
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August 7th, 2012 at 5:18 pm 83
@Anonymous: “doesn’t need dishonest tenants to make it even worse”
The fine is arguably inappropriately meted out; strata may have the authority to impose a $200 fine but it sounds like it’s out of proportion to the offence Makaya is highlighting. A simple warning in this case would have produced the desired result. They have chosen to impose a penalty that, assuming there is no additional documented bad history with Makaya’s tenure, is heavy-handed.
That the strata chose to illegally impose a $200 fine for a minor infraction that involved no discomfort or displeasure to residents, produced no safety risks, shows
1) they don’t know the law, and
2) they are passively trying to deal with the problem. That they didn’t even think to contact the tenant notwithstanding what they are legally required to do shows bad faith.
Makaya has every right to ask for due process; that the strata council has not followed it is offside and they need to understand the consequences of not understanding the law. It sounds like the strata council needs a wakeup call.
Paying the fine misses the point: the fine is unreasonable and would likely be deemed as such upon external review. So enough of the pay-the-fine-you-bitter-bear-tenant-trying-to-get-even-with-the-greedy-owners line.
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August 7th, 2012 at 5:26 pm 84
@jesse: Jesse, you need to chill. You’re reading way to much into my words, AND Makaya’s words. Makaya has not given you enough information for you to conclude that he is an innocent victim of a draconian strata. Besides, none of what you’re saying makes it fair to leave it to the landlord to pay the fine, as you recommended earlier.
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August 7th, 2012 at 5:31 pm 85
numbers….I …need …numbers. its been so long…
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August 7th, 2012 at 5:33 pm 86
New Listings 232
Price Changes 128
Sold Listings 113
TI:18784
http://www.paulboenisch.com
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August 7th, 2012 at 5:38 pm 87
@Anonymous: “Makaya has not given you enough information for you to conclude that he is an innocent victim of a draconian strata”
They imposed a significant fine without following the process outlined in law. The fine sounds out of proportion to the offence but it depends on the history of other similar infractions in the building.
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August 7th, 2012 at 5:42 pm 88
Why is the fine for moving a sofa at 2 km per hour almost as much as the fine given to some douchebag offspring of HAM for going 200 kph through the Massey tunnel?
This city is messed up.
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August 7th, 2012 at 5:45 pm 89
@Anonymous: “none of what you’re saying makes it fair to leave it to the landlord to pay the fine”
I never suggested the landlord pay the fine, I suggested the strata follow proper procedure and the landlord can recoup the fine when it is properly imposed, and I’m sure Makaya would promptly pay it if the procedure is fair and legal. If the landlord chooses not to pursue Makaya that’s his/her call. It’s likely moot anyways: most likely the LL will withhold $200 from the DD to pay the potential fine.
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August 7th, 2012 at 5:53 pm 90
@Best place on meth: “Why is the fine for moving a sofa at 2 km per hour almost as much as the fine given to some douchebag offspring of HAM for going 200 kph through the Massey tunnel?”
My guess (and this is what happened in a building I used to live in) is that residents thought they could move furniture without first protecting the elevator and the elevator ended up damaged, damage that is many hundreds of dollars to repair. Strata figured that issuing warning letters was not strong enough a deterrent for their residents and imposed a policy of an immediate $200 fine for an infraction. Lesson is to read the minutes and by laws I guess.
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August 7th, 2012 at 5:54 pm 91
sales still stronger then I’d expect.
who’s still buying in this market.
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August 7th, 2012 at 5:55 pm 92
@jesse: “I never suggested the landlord pay the fine”
Really? I call BS. Here is what you said:
“If they’re unaware of the fine best you get your DD cheque and inform the strata in writing after you get the money their fine is invalid. That way the LL has to come after you for the difference and $200 isn’t worth it.”
So, how is this not suggesting that he stiff his landlord?
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August 7th, 2012 at 5:58 pm 93
wow! lots of sales and price increases today
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August 7th, 2012 at 6:00 pm 94
@Jeff: Yeah, its looking good! After all this is a fabulous city, and why would prices go anywhere but up!??
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August 7th, 2012 at 6:05 pm 95
@Anonymous: “So, how is this not suggesting that he stiff his landlord”
If the landlord is too idiotic not to pursue a former tenant for charges owing that’s his problem. The landlord is perfectly capable of withholding DD for impending fines.
Let me ask this: did the landlord notice or care that proper process was not followed when the strata imposed its fine? I’m not trying to judge, I’m giving Makaya the benefit of the doubt and better get the $ upfront than have to go to court for it. I’m sure Makaya will pay the fine in full without delay if that’s the eventual decision.
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August 7th, 2012 at 6:10 pm 96
@Anonymous:
“So, how is this not suggesting that he stiff his landlord?”
Because, as I have already pointed out, there is no fine to pay. It’s the strata who is trying to stiff the tenant by trying to collect a “fine” without following the legally mandated process.
And may I point out that not being a lawyer is not an excuse for anyone not to carry out their legally required duties in any role.
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August 7th, 2012 at 6:10 pm 97
Unfortunately sales numbers really only tell part of the story. We are in the midst of 5 straight months of declines. The end result could be that prices are finally starting to come down. As prices come down, sales will go up. We could have 1000 sales today, but if they are all at low prices, then it doesn’t matter. Sales need to go UP for prices to come DOWN. So maybe that is finally happening, maybe all 113 sales today were at huge price cuts. Hopefully when Paul updates his numbers we will have a more clear picture.
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August 7th, 2012 at 6:12 pm 98
@Jeff: Thanks for confirming it’s over! I never thought I’d see the day when 113 is considered a big sales day
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August 7th, 2012 at 6:13 pm 99
@jesse: Your non-sequiturs are not worth a reply.
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August 7th, 2012 at 6:23 pm 100
@jesse:
“residents thought they could move furniture without first protecting the elevator”
Yes, I could see how the possibility of scratching the elevator would drive condo owners to levy a $200 fine against the reckless perpetrator, something like that would be a horrific tragedy in a city where property values are everything.
I hope the $196 fines + impound costs the street racers had to endure didn’t cause them too much suffering.
I’m sure the chances of them leaving a fiery trail of death and destruction on a public road was minimal anyway since most of them had possessed their drivers license for several weeks already.
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August 7th, 2012 at 6:24 pm 101
@patriotz: The two leading thinkers of this blog, Jesse and patriotz, losing credibility with inane arguments! Very entertaining.
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August 7th, 2012 at 6:25 pm 102
@Jeff: “wow! lots of sales and price increases today”
Do you have a breakdown of which price changes are increases and which are decreases? I always thought they were almost always decreases.
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August 7th, 2012 at 6:26 pm 103
US homeowners stuck in ‘underwater’ houses
So 20% off a peak of apparently around $200K is pain?
What do you call 40% off $800K?
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August 7th, 2012 at 6:39 pm 104
@Anonymous: ” The two leading thinkers of this blog”
Have you checked out whose comments get consistently modded up? On balance it ain’t the “thinkers”. And with that food for thought, the troll feeding is finished for the day.
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August 7th, 2012 at 6:43 pm 105
@AfroFrancophone:
Now Garth has over 1200 people signed-up…..
“It must be terminally boring in Vancouver these days. How else to explain 1,214 people signing up to hear my pathetic speech on August 20th? Don’t you people have cable?”
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August 7th, 2012 at 7:00 pm 106
Doesn’t really matter how many price changes there are, the new listings are priced $500, $600, $700, $800 per foot! The sellers are making out like bandits with huge profits.
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August 7th, 2012 at 7:16 pm 107
Welcome Jeff!
It’s refreshing to see mindless bulls and pumpers back.
Many of us complained that it was way too quiet.
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August 7th, 2012 at 7:25 pm 108
ok lets get serious then. Even if prices were to drop 50% would they still make any sense? I personally don’t think so. Prices have moved up so much that it would take a 70% drop for them to become attractive again. So why even bother sitting around waiting for this 50% drop when even then most of us would consider that only fair market value.
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August 7th, 2012 at 7:34 pm 109
@Vote Down The Facts: The idea of any of those price changes being increases is hilarious.
“Hmm.. My condo has been on the market for months and nobody is interested, better increase the price!”
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August 7th, 2012 at 7:49 pm 110
@ScubaSteve:
“We could have 1000 sales today, but if they are all at low prices, then it doesn’t matter. Sales need to go UP for prices to come DOWN. So maybe that is finally happening”
No that’s just not the way markets work. You need lower sales volumes for a lot longer than a few months to have prices come down in a substantial way.
I have been reading these blogs casually since VHB in 2005/2006. its now 7 years later and I don’t see anything substantial just around the corner. we might gain and lose the same 10% for a while but that’s about it. With a 5-year under 3 percent? where is the glut of new product on the market? (wasn’t that supposed to be yaletown park btw..how did that work out?)
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August 7th, 2012 at 8:02 pm 111
@scone:
As I understand it price increases do happen, just not that often.
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August 7th, 2012 at 8:38 pm 112
If the building envelope does its job, then the sheathing material (whether OSB or plywood) will do its job, which is simply providing shear or lateral strength for the wall. If the building envelope fails, the sheathing material will get wet and rot given time, and the difference would not be more than a couple of years.
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August 7th, 2012 at 8:42 pm 113
@Conrad:
You’re dreaming. I hope your mortgage isn’t too high… you are going to get destroyed when the market plunges.
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August 7th, 2012 at 8:58 pm 114
What a fascinating discussion about plywood. You guys are like a big barrel of monkeys! So much fun!
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August 7th, 2012 at 9:28 pm 115
does anyone know why Garth thinks it would take 5 months for the mortgage rules to affect the sales data?
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August 7th, 2012 at 9:34 pm 116
@Conrad: Conrad you have got to be kidding. Its true that this correction/crash has been called for years however now the only thing that might be missing from this picture for you, if you have indeed been following things, is popcorn.
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August 7th, 2012 at 9:37 pm 117
@s:
The folks still buying are ones that are cashing in on “price changes” … In other words “price declines.” This’ll be reflected in the stats in due time (fall). Little do they know… They think they’re getting a deal…and the correction continues
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August 7th, 2012 at 9:55 pm 118
@Vote Down The Facts: Yes, they do happen but it takes a special kind of logic to raise the price on something that isn’t selling.
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August 7th, 2012 at 10:08 pm 119
@Anonymous:
” only thing that might be missing from this picture for you, if you have indeed been following things, is popcorn.”
no what is missing is the catalyst. We have low unemployment in Vancouver, and VERY low interest rates. Where is the fuel to drive this crash coming from?
If you are old enough to have lived through a crash you will know that right now doesn’t have that feel at all. Just not enough pressure on household balance sheets to cause that, plain and simple
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August 7th, 2012 at 10:51 pm 120
@Conrad:
Low foreclosure rate, too.
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August 7th, 2012 at 10:56 pm 121
@Conrad: “Where is the fuel to drive this crash coming from?”
In my view the greatest risks to the downside are (in no particular order):
1) Geographically-weighted loan tightening required under new mortgage underwriting guidelines
2) Slower population growth than in past years
3) A marked slowdown in Asian economies
I would not bet on higher rates any time soon but there is nonetheless a risk of them rising.
Any of these will manifest through high inventory and low sales, which is highly positively correlated with price drops. That these lackadaisical conditions exist now are not a good sign and a necessary precursor to a prolonged bear market.
Some things to consider. While some may not want prices to drop it is unlikely in their power to prevent drops if these events occur.
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August 8th, 2012 at 12:16 am 122
what is missing is the catalyst! things are slow enough to drive prices down 50%. but will make this market affordable?
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August 21st, 2012 at 12:05 am 123
[...] catch(err){}; We had a post a little while back about one of the reasons we see so many leaky condos around here: Improper installation of the wrong electrical boxes on exterior [...]
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