More than a million people in British Columbia (BC) live in strata-titled housing in the hundreds of buildings that have been constructed since 1966 when BC’s first strata act made them legally possible.
Buildings are getting old, property developers are hungry for any new site in the land-locked Lower Mainland, and individual city governments have been identifying new areas of density, which is fresh bait for redevelopment.
In the spring of 2016, new legislation was passed, permitting the sale of strata property with 80% of agreement among owners to sell. Before this, strata councils required 100% of the vote.
If your strata building is beyond its expiry date and you’re racking up hundreds of dollars more than you should be in maintenance costs, it may be a good idea to sell and find a newer building elsewhere. Albeit, it may be very difficult to find a newer property in the same neighbourhood close to friends and family. From speaking with own friends and family who live in older buildings, they fear they don’t know where they would go if their strata council decided to sell up and some fear they will have to leave Metro Vancouver the way house prices have gone.
Some also feared the added density will go to speculators, rather than local residents and they would be hard-pressed to find a similar-sized condo as the one they’re currently living in.
What happens if I don’t want to sell my property?
Normally, strata council voting is done by secret ballots. If you don’t want to sell your unit, simply vote against it. Should more than 80% of residents vote in favour of selling the strata building to a developer, the 20% of residents who voted against it will be forced to sell up.
A court application is recommended to ratify any agreement to sell a property to safeguard the 20%. The judge will decide if the sale is in the best interests of the residents.
If I sell, how much of a premium should I expect from the sale of my property?
What you need to do is get an appraiser to calculate the assessed value. This will tell you what your home is actually worth. Some developers are willing to pay twice the assessed value for prime locations. Expect 25 to 30% over the assessed value for less desirable locations.
In my opinion, the assessed value does not reflect the current market value as there is a big difference between the two. The 2017 Property Tax Assessment is a value that is calculated for tax purposes based on automated valuation algorithm used by BC Assessment and is split up into two components of valuation, land, and buildings.
If you are looking to sell your property, a licensed realtor in your neighbourhood would be able to provide an estimated market value based on a Comparative Market Analysis. If you need a referral for a realtor in your neighbourhood, please let us know.
What happens to my mortgage if I decide to sell my property?
If your mortgage was arranged through us, do reach out to us if you are in a situation like this. We will be able to switch or port the mortgage for you. Porting your mortgage means taking your existing mortgage—along with its current rate and terms—from one property and transferring it to another. It’s important to note, you’re only allowed to switch your mortgage if you’re purchasing a new property at the same time you’re selling your old one.
If you are lucky, you may be able to purchase a unit within the new development from the developer on the same plot of land.
