Some issues to consider when buying in Vancouver
Benchmark housing prices-
Pre-sale units- A major practice to be aware of is the selling of condominium units in buildings that are not yet built. Builders purchase land and set up presentation centers to aggressively market and pre-sell high-rise condos to purchasers who have not yet seen what they are paying for. As a buyer you have no real way of knowing if you will end up with a quality product. These purchases are based on trust of the developer or builder alone, so it's a good idea to get references from previous customers before you buy.
Strata councils and fees - When purchasing a unit within a multi-unit building, you enter into a co-ownership of the common areas, or all areas and land outside of the units. The strata council is the board that makes decisions for the common investment of the owners within the building. Strata councils hold monthly meetings to hear concerns of property owners. During the meetings, minutes are taken to produce a record of all council activities.
Strata councils hire a property manager or agent that collects and manages strata fees. You pay these fees monthly, and they make up a contingency fund that is expensed for building maintenance costs paid to engineers, trades, lawyers and accountants.
Before you purchase a pre-owned strata property, be sure to request copies of the strata council minutes for at least the past six months. Any conflicts surrounding the property should be detailed in the minutes. Also ask questions of existing owners, the property manager and council president to determine further issues.
Leaky condos - Water damage in condo units has been a crisis situation, primarily due to the amount of precipitation the city gets. Repairs of building damages assessed in the past 5 years are expected to cost consumers up to $5 billion. In some instances, high-rise buildings have required full exterior (or 'envelope') replacement. The buyer's cost for such repairs could range from $40,000 - $100,000 per condo unit. The Homeowner Protection Office (HPO) requires residential buildings in BC provide a mandatory warranty that offers two years on labour and materials, 10 years on structure, and five years on water penetration of the building envelope. Before you buy, be sure to request strata council minutes for review, talk to existing owners, and consider having an independent inspection done.
Purchase tax - Newly-built suites and homes are subject to GST (7%) tax. Properties and units which are resold are not subject to tax.
Property tax - Land, home and commercial property owners must pay property taxes to the City of Vancouver. The amount owed is based on government-assessed property value. The BC Assessment Authority determines the worth of the property, and the City of Vancouver sets tax rates which are mailed out yearly to owners. Taxes are payable two times per year - in February and July.
Foreign investment - A high percentage of properties are purchased by foreign investors who do not occupy, but rent out, their units. Concerns are much different for owners renting for profit and long-term occupiers.
Grow-op houses - The marijuana grow-operation industry in Greater Vancouver is highly profitable, and both owners and renters set up crops inside their houses. Look for signs of this when viewing a house for potential purchase, as there may be hidden electrical, plumbing, drywall, mold damage.
Home Buyer & Owner Resources
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