www.cartrefproperties.com
Wednesday, October 21, 2020
Repair or Rebuild
Vancouver and the lower mainland is experiencing a shortage in rental housing which isn't a surprising issues for a growing city. Many municipalities around Vancouver have smaller three story rental buildings aging and in need of significant repair which owners are unwilling to complete due to extensive costs. These properties sit on large parcels of land which if the building were taken down and rebuilt the density could be increased for rental housing throughout the lower mainland. Many municipalities should consider allowing developers remove and rebuild these properties, or the municipalities rebuild then sell after built to increase the rental stock. Yes this will displace people who are living in these buildings in the short term, the long term affect would be increased rental properties for the future. The city is not getting smaller and the longer development takes the greater the pain will be. The BC government has used the development of Strata Properties to grow the rental market. Individual investors are purchasing units in strata buildings and becoming landlords. The problem with this policy is the units are never fully a rental unit and can be removed from the market if the owner chooses to sell. Or in recent years owners rent the unit through vacation rental property websites, taking it out of the long term rental market. Every city needs rental housing for incoming, transient workers, students, seasonal and short term employees. When cities don't build more rental product the cost of housing increases significantly, along with the cost of living. The video below also shows the impact home ownership can have on a society. Renting and renters are often viewed in a negative light, when it should be embraced as part of the community people live in.
Tuesday, February 11, 2020
Blinded by the View
Insurance rates for Strata Corporations are going through the roof and in some cases buildings are unable to obtain insurance. We should not be surprised it was foreseeable. Why do we need insurance to drive a car in BC, yet we can own a million dollar property which can affect multiple people's lives and not be required to have home insurance. I would suggest half of strata lot owners didn't have insurance for their property before this issue. With the increase in deductibles that number will increase as there may be no benefit to having home insurance if the deductible is $250,000, it is never going to be used.
During my time in the industry I have asked the insurance providers why they are not lobbying the government to make it mandatory for all owners to have insurance, and to fully fund the depreciation report, they said it was not their role. This is not the solution but it goes in the right direction, as current level of strata fees fail to provide the required funding for maintenance in BC.
Strata Councils and owners choose not to repair items due to lack of funding or ability to pay a levy which later becomes insurance claim, there is no guarantee the new building will not take this same approach moving forward, which creates the same risk to the providers to insure new buildings. Why do owners and councils make this decision, they can’t afford the increased strata fees, or the special levy fees. This means people can’t afford the home they live in.
Multiple changes to the Strata Property Act are required to help change this issue moving forward. First, developers should be required to provide the first depreciation report when a new building is constructed and strata fees should be based on the costs of fully funding that report. This will give buyers a true cost of maintaining the building. Fully funding the report should be a requirement for every Strata Corporation to ensure they have the resources to perform the repairs as needed.
All owners should be required to have homeowners insurance for their strata lot equivalent to having car insurance which would assist with smaller claims and provide an easier subrogation for the providers to recoup their losses.
Is it time to change the requirements of council participation? Lack of maintenance is directly correlated to council and owner decisions. Often decisions are made based on what “individuals” can afford not building needs. Owners fail to understand the maintenance cost for the building comes from only one source, their pockets. I have seen many decisions for repairs be rejected and or not put forward due to council and owners feeling they can’t afford the repair. The problem then increases in severity and the cost increases to repair the issue when it fails in an emergency causing an insurance claim. Maybe, it’s time to change the act to provide a combination of owners and professionals on Strata Corporation councils and limit the owners ability to turn down necessary repairs. This would be a difficult process and fully funding the depreciation report could provide the resources for Strata Corporations to complete necessary repairs. Maybe council’s should be required to have professionals like an engineer and accountant as part of their council to review materials.
During my time in the industry I have asked the insurance providers why they are not lobbying the government to make it mandatory for all owners to have insurance, and to fully fund the depreciation report, they said it was not their role. This is not the solution but it goes in the right direction, as current level of strata fees fail to provide the required funding for maintenance in BC.
Strata Councils and owners choose not to repair items due to lack of funding or ability to pay a levy which later becomes insurance claim, there is no guarantee the new building will not take this same approach moving forward, which creates the same risk to the providers to insure new buildings. Why do owners and councils make this decision, they can’t afford the increased strata fees, or the special levy fees. This means people can’t afford the home they live in.
Multiple changes to the Strata Property Act are required to help change this issue moving forward. First, developers should be required to provide the first depreciation report when a new building is constructed and strata fees should be based on the costs of fully funding that report. This will give buyers a true cost of maintaining the building. Fully funding the report should be a requirement for every Strata Corporation to ensure they have the resources to perform the repairs as needed.
All owners should be required to have homeowners insurance for their strata lot equivalent to having car insurance which would assist with smaller claims and provide an easier subrogation for the providers to recoup their losses.
Is it time to change the requirements of council participation? Lack of maintenance is directly correlated to council and owner decisions. Often decisions are made based on what “individuals” can afford not building needs. Owners fail to understand the maintenance cost for the building comes from only one source, their pockets. I have seen many decisions for repairs be rejected and or not put forward due to council and owners feeling they can’t afford the repair. The problem then increases in severity and the cost increases to repair the issue when it fails in an emergency causing an insurance claim. Maybe, it’s time to change the act to provide a combination of owners and professionals on Strata Corporation councils and limit the owners ability to turn down necessary repairs. This would be a difficult process and fully funding the depreciation report could provide the resources for Strata Corporations to complete necessary repairs. Maybe council’s should be required to have professionals like an engineer and accountant as part of their council to review materials.
www.cartrefproperties.com
Subscribe to:
Posts (Atom)