Vancouver Condo Info

Everybody likes to save money right?   When it comes to building maintenance one way to save money is to simply not have any work done.  Just ignore the condition of your building and hope for the best.  The only problem with this approach is that unless you can unload the unit to an unsuspecting buyer before disaster strikes you’ll be looking at a much larger repair bill.

And leaky condo problems aren’t exactly rare in Vancouver - just look at the recent news of repairs on two concord pacific towers downtown, or any other the other leaky condo repairs throughout the lower mainland.

Househunting.ca has a letter from someone whose strata opted for the ‘ignore it and hope for the best’ strategy:

Now our deferral has come back to haunt us. Each owner is faced with an average $19,000 assessment just to maintain and upgrade the exterior, not including the roof. Our windows have failed, our decks and balconies are in serious failure and the masonry detailing is in need of serious attention.

We have figured out that if each strata lot had paid an extra $30 per month over the past 34 years, our buildings would have been routinely repaired, the interest would have covered inflation costs, and we wouldn’t be doing this at a time when construction costs are at a record high.

Another problem with not getting basic maintenance done is that it will affect warranty coverage.  Even if your building is under a New Home Warranty or covered by a rain screen repair warranty, your coverage is affected by your buildings maintenance record.  Saving money in the short term can work out to be very expensive in the long term.  A year ago you may have been able to unload a leaky condo without much of a loss, but as our market softens and the number of listings for sale grows this is less of an option.

Putting the problem unit on the market and praying for a sucker with good credit isn’t as effective as it once was.

With more and more noise in the media about Vancouver real estate being overpriced you may be surprised to find a local real estate investment that appears quite inexpensive by comparison - The Timeshare.  Vlad writes in to share his experience:

I’ve made a costly mistake – I bought a timeshare from Point To Point Destinations (PTP Destinations, West Coast Timeshare) in Vancouver, BC and I regret it ever since.  Check the facts before you buy a timeshare from any company to avoid making the same mistake I did.
I posted my experience and facts on this web site: TimeshareRevealed.com  Please go to the “Investment Calculator” page, it is more than just a calculator. There I share facts about the following:

•    Real cost of timeshare comparing to an investment.
•    Examples from eBay about resell value.
•    How it can be cheaper to buy for cash.
•    Maintenance fees of a timeshare comparing to a condo.
•    Transaction and other fees.
•    Assets value of the company comparing to the cost of the shares.
•    Using points for car rentals, cruises, airline tickets, entertainment and so on.
•    Limitations of  booking timeframe.
•    Unused points taken away while maintenance fees not refunded.
•    Deed and title.
•    Using RCI membership for home resorts.
•    Collections practices.
•    The right of first refusal.
•    How much of your money paid to sales representatives.
•    PROFIT 100 guide compared to audited financial statements.
•    Lack of warranties or guarantees.

I wish someone explained this to me before I bought my timeshare from Point To Point Destinations (PTP Destinations, West Coast Timeshare) in Vancouver, BC. During sales presentation I understood some of it much differently and I do not remember other important things mentioned at all. If I knew all this I would never buy it to begin with. I hope these facts will help you make your own decision.

Vlads website is at www.TimeshareRevealed.com

Renewed concern over an old mortgage fraud problem has been in the news lately and that attention has people flooding the title office with calls from homeowners.  Last Friday the Vancouver Sun reported the story of a Retired Richmond man who discovered his house had been sold without his knowledge and a large mortgage taken out on the home:

It’s all part of an elaborate scheme that has surfaced recently in B.C. in which con artists are attempting to sell homes without the owner’s knowledge, leaving the homeowner off the title but with hundreds of thousands in new mortgage debt against the property.

In the latest variation of the scheme in B.C., a would-be seller contacts a notary or lawyer to carry out the sale of a home.

A buyer, who is thought to be in on the deal, applies for a mortgage on the property and if the transfer is successfully carried out, the mortgage funds are paid to the seller. The buyer and seller disappear and so does the money, often leaving the homeowner to discover the ruse only when the bank notices the mortgage payments aren’t being made and comes looking for its money.

While such fraud is not new, title insurance company First Canadian Title said B.C. has seen a jump in suspicious cases this year. And a B.C. Supreme Court decision this month ruled that while a true owner could regain title to a property if it was fraudulently transferred, mortgages taken out on the property — even if fraudulently obtained — still stand.

Unfortunately the only way to discover that you are a victim of this sort of fraud is by checking records with the title office, which has set off this recent flood of calls:

“A lot of people have been wanting information, and the calls are backed up for at least a day,” Ian Smith, director of land titles for British Columbia and registrar in the Land Title and Survey Authority’s New Westminster land title office, said Wednesday. “We had 180 I believe yesterday, and that was just in the New Westminster office.”

Meanwhile, the authority launched an appeal to a recent B.C. Supreme Court decision that ruled that while a title that had been fraudulently transferred should be restored to the rightful owner, a mortgage then taken out against the property would stand. The ruling suggested that the owner of the property could seek compensation from the land title assurance fund.

If you are concerned about this sort of fraud and own your home outright there is a way to protect yourself:

Homeowners who are worried, though, can request a duplicate certificate of indefeasible title, which can only be issued for titles that have no financial charges against them, useful perhaps since the con artists target homes that are mortgage free. New Westminster real estate lawyer Alex Sweezey said strata owners also are not a target because on a condominium sale lawyers also have to deal with the strata management company.

The cost of the duplicate title is $50, but once it has been issued nothing can be registered against the title until it is surrendered to the land title authority. Smith said homeowners can get a form to request the duplicate from the land title office or from most lawyers or notaries. However, if it goes missing, replacing it can be costly and time-consuming, involving affidavits and other requirements.

I received a press release from Deryk Norton of the Vancouver Island Strata Owners Association (VISOA) claiming that BC lags behind the rest of Canada when it comes to legal protections for strata owners - below is the text of that release:

STRATA OWNERSHIP NEEDS BETTER LEGISLATION

According to strata owners on Vancouver Island there are major deficiencies in BC’s strata legislation. Over 458,000 condominiums and other strata properties, or one in four taxable properties in BC are affected by strata legislation. 67,000 of these properties are located on Vancouver Island.

A series of public meetings hosted by the Vancouver Island Strata Owners Association (VISOA) was completed on March 30. At these meetings, participants reacted to a discussion paper based on numerous complaints VISOA had received about inadequate legal protection for strata owners. Based on the public meetings, written submissions from owners and consultation with homeowner associations on the mainland, VISOA is now developing a report on issues and alternatives for improving BC’s strata legislation. The report will be available later this spring.

Most concerns expressed by strata owners focused on transparency and accountability deficiencies, including:

• Lack of an accessible and authoritative source of legislation interpretation to support the operation of strata corporations according to law,
• Lack of a requirement for a depreciation report or reserve fund study to inform owners and purchasers of the financial implications of the condition of common property,
• Lack of a requirement for an audit of strata finances even where the strata corporation has hundreds of thousands of dollars in a reserve fund, and
• Lack of prosecution of developers operating contrary to strata legislation.

“Furthermore, VISOA research has found that BC lags behind other jurisdictions in requiring transparency and accountability for key areas of strata or condominium operations”, said Felicia Oliver, VISOA President.

 

VISOA is a non-profit organization that has provided information and education services to strata owners and strata councils on Vancouver Island since 1973.

BC’s strata legislation includes the Strata Property Act, the Real Estate Development Marketing Act and the Real Estate Services Act.

The VISOA website can be found at http://visoa.bc.ca/whatsnew

Hunting for rental housing in any city can be exhausting, in Vancouver it can be downright depressing. Going to view small dingy 1 bedroom apartments ‘accidentally’ listed as 2 bedrooms and described as ‘huge’ and ‘bright’ is a frustrating waste of time, but it would be even worse to lose deposit money to a scam listing of an apartment that doesn’t even exist.

Craigslist has brought a convenience to rental shopping that cuts both ways - It’s easier for you to look through listings in your bathrobe, but its also easier (and free!) for con-men and scammers to grab nice pictures off the web and list fake rentals that are too good to be true.

The Vancouver Police say at least 15 people in the last month have been conned out of deposit money in face to face meetings with fake landlords, but there’s no reason a scammer even needs to be in Vancouver if you’re not paying close attention. A common scam is to list an apartment that’s too good to be true, but the purported ‘owner’ happens to be out of the country, maybe just starting a new business in Athens Greece or on a missionary trip to Asia.

They will describe the apartment in glowing terms and offer to use a service like TNT, FedEx, UPS or DHL to insure that you get the key - they’ll send you a link to a legitimate shipping website first to get your confidence and then send you a fake ’secure’ link to make it easy for you to send them your money. Dissapointingly the key never shows up and you won’t hear from the ‘landlord’ again once your deposit is gone.

It’s not too difficult to avoid this sort of scam, just view listings with a sceptical eye and deal with local people, only giving a deposit after you’ve viewed the suite and gotten enough information out of the owner to make you comfortable. If you do make email contact with a seller on craigslist that isn’t local, take a close look at any responses you receive - The following is an example of a fake header message in an email:

** CRAIGSLIST ADVISORY — AVOID SCAMS
** Beware: cashier checks, money orders, escrow
** Transaction: For a secure transaction we recommend TNT, Fed Ex, DHL or UPS, services because can verify the information of the seller and buyer.
** craigslist recommend Deeann38officcee as a trusted seller.

A common ‘phishing’ technique is shown here - make your rip-off seem legitimate by warning against ’scams’. That alone isn’t enough to call this email a fake, but there are a couple of other indicators here that say ’scam’. Craigslist never recommends any advertiser as a ‘trusted seller’, and they don’t recommend any shipper. A simple check of the Craigslist site confirms these points.

It looks like the lower mainland has at least one rental scam-hunter and you may find more useful information on their website. Unfortunately it all comes down to one basic point to keep in mind: if it looks ‘too good to be true’ it probably is.

Here’s one option for getting rich off your Vancouver condo investment: Turn your condo unit into a hotel room and provide temporary shelter for tourists. Why get only $1300 or so a month when you can get $2790*? Here’s an example located downtown at spectrum.

By going into the hotel room business you can earn enough to pay the mortgage on your investment, and as long as your strata agreement allows it you can compete with traditional hotels by allowing pets.

You can become an ambassador for the city AND make out like a bandit. Whats not to like?

*based on full occupancy at daily $90 per day rate for 31 day month

A simple fool-proof debt management plan from SNL:

Well, I don’t know that they’re actually ‘hidden’, but thats the title of this article on MSN Sympatico finance about the extra expenses that people don’t always take into consideration when buying a home.

Purchasing a home is a stressful experience for anyone, but especially for first-time buyers who may not be aware that there are a host of costs other than the actual purchase price and real estate commissions.

It helps to know what those costs are in advance rather than get an unexpected surprise and add to an already stressful experience.

From the gosh-what-a-suprise department: the Sun has an article about Northern BC having the most affordable real estate.

The survey found that despite average house price increases of 30 per cent across northern B.C. in 2006, owning a home in the region consumes less than half the household income of a homeowner in Vancouver.

According to the BCNREB report, which was commissioned after RBC Financial Group released the results of a cross-Canada housing affordability study showing that B.C. was the least affordable place to buy a house, the Housing Affordability Index (HAI) for northern B.C. was 28.9 per cent compared to 68.5 per cent for Vancouver and 62.5 per cent for B.C. as a whole.

I wonder if anyone in Vancouver actually does spend 68.5 percent of their pre-tax income on housing.. Is that even physically possible?

Here’s an excellent Buy/Rent comparison calculator on the New York Times site. It lets you enter rent value / purchase value, interest rate, property taxes and then adjust sliders for house appreciation and rent increases.

What with recent complaints about ‘affordability’ in the lower mainland I was curious about how some local real estate would compare, so I entered some number for this house I found on craigslist since it listed a selling price and current leased rental income.

With rental income of $1170 and an asking price of $419,800 you get some interesting results by playing with sliders on that calculator. for instance: 25% down payment at 6.25% interest rate - if the house appreciates by 10% a year over 30 years you’re better off buying after just one year, but if the house appreciates an average of 5% a year over 30 years you’re better off renting.

There are a lot of variable there - if you have some numbers from the local market its worth plugging them in and checking out the results.

Note: Since this is a US site I assume they are taking into account the mortgage tax write off, which we don’t have here in Canada.

UPDATE: dingus points out this Canadian buy/rent calculator.