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.”

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

White Rock council say closure of the city’s pier, promenade and parking lots are not under consideration at this time, but have approved other COVID-19 options for the waterfront including stepped-up RCMP patrols that are already part of detachment planning. (Aaron Hinks photo)
White Rock pier, promenade, parking lot closures off the table – for now

Council members warn decision subject to future provincial health orders

It remains to be seen how tourism dollars announced this week will help in White Rock. (Sterling Cunningham file photo)
White Rock officials question if tourism relief will come soon enough

For business, budget ‘feels more like a placeholder,’ says chamber head

B.C. Finance Minister Selina Robinson outlines the province’s three-year budget in Victoria, April 20, 2021. (B.C. government video)
South Surrey, White Rock MLAs call Tuesday’s provincial budget ‘disappointing’

MLAs Stephanie Cadieux and Trevor Halford say residents are getting less for more

Memorial for Travis Selje on 64th Avenue in Cloverdale, west of 176th Street. (Photo: Tom Zillich)
Epilepsy-defence driver found not guilty in crash that killed Surrey teen Travis Selje

Accused testified she has no recollection of the crash and believes she had an epileptic seizure that caused the collision

(File photo)
Three young girls followed while walking home from school, Surrey police say

RCMP say suspect took off after girls went into nearby store for help

Canadian Prime Minister Justin Trudeau and United States President Joe Biden smile as they say farewell following a virtual joint statement in Ottawa, Tuesday, February 23, 2021. THE CANADIAN PRESS/Adrian Wyld
Trudeau pledges to cut emissions by 40% to 45% by 2030, short of U.S. goal

Trudeau announced target during a virtual climate summit convened by U.S. President Joe Biden

MLA Shirley Bond, right, answers questions during a press conference at Legislature in Victoria, B.C., on February 19, 2019. THE CANADIAN PRESS/Chad Hipolito
Former B.C. gaming minister says she wasn’t told directly about dirty cash flowing to casinos

Shirley Bond said Thursday civil forfeiture, gang violence and gambling addiction were also major concerns in 2011

RCMP Constable Etsell speaks to tourists leaving the area at a police roadblock on Westside Road south of Fintry, B.C., Thursday, July 23, 2009. THE CANADIAN PRESS/ Yvonne Berg
B.C. police say they take ‘exception’ to conducting roadblocks limiting travel

Asking the police to enforce roadblocks exposes officers to further risk and possible COVID-19 infections, says federation president Brian Sauve

As part of the province’s strategy to combat the opioid overdose crisis, take-home naloxone kits have been distributed throughout the province. (Courtesy of Gaëlle Nicolussi)
Vancouver Island could be at its worst point of overdose crises yet: medical health officer

Island Health issued overdose advisories for Victoria, various communities in the last two weeks

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

Firefighters carry equipment from the scene of Monday’s Willoughby fire. The April 19, 2021 blaze turned the Alexander Square development at the corner of 208th Street and 80th Avenue to rubble. (Rob Wilton/Special to Langley Advance Times)
Langley Fire: The aftermath of the inferno

The scene remains active as investigators work to determine a cause

BC Hydro released a survey Thursday, April 22. It found that many British Columbians are unintentionally contributing to climate change with their yard maintenance choices. (Pixabay)
Spend a lot of time doing yard work? It might be contributing to climate change

Recent BC Hydro survey finds 60% of homeowners still use gas-powered lawnmowers and yard equipment

Journal de Montreal is seen in Montreal, on Thursday, April 22, 2021. The daily newspaper uses a file picture of Prime Minister Justin Trudeau dressed in traditional Indian clothing during his trip to India to illustrate a story on the Indian variant of the coronavirus. Paul Chiasson/The Canadian Press
Montreal newspaper blasted for front-page photo of Trudeau in India

Trudeau is wearing traditional Indian clothes and holding his hands together in prayer beside a caption that reads, ‘The Indian variant has arrived’

Most Read