Developers Eyeing Old Condominiums and Townhouses
The proposed provincial Strata Property Act allows 80% of strata owners, rather than the current unanimous vote, to dissolve the strata. Under this change, B.C.'s strata owners may find it easier to dissolve their strata corporations and sell the entire building. The new legislation has passed its first reading and is projected to come into effect by the end of the year.
Benefits to Strata Owners Sellings
Strata owners could potentially benefit from the windfall of this change as developers hone in on this development option. As older strata corporations reach the end of their "life cycle", common property components begin to fail, requiring expensive repairs. Strata owners may prefer to sell the property to developers who can put it to more profitable uses.
"Strata members living in a low-rise building on a large property may see the opportunity to have the land redeveloped into a larger building with more units," says Darren Donnelly of Clark Wilson LLP's commercial real estate group.
Real estate agent Lance Coulson, who specializes in multi-family property with CBRE commercial real estate, espects developers to focus on aging and smaller low-rise condominium projects where it would be easier to get most owners to agree to sell.
The first condominiums and townhouses in B.C. were built in the mid-1960's. Some of the older complexes found close to SkyTrain stations or on major intersections may have lower density than the current municipal zoning allows.
However, Commercial real estate specialists anticipate a rush of applications under this new scheme if the vote is right at the 80% mark and a minority of owners oppose selling. The court would only allow the sale to proceed if the real estate broker or developer could demonstrate that the opposing owners would receive the maximum value for their units and that the project would be widely marketed.