Real Estate

Buying Second hand condo vs New Condo

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  • Aug 16th, 2015 5:01 am
Member
Jan 10, 2008
261 posts
6 upvotes
GTA

Buying Second hand condo vs New Condo

I'm thinking about a rental condo for a family member in Downtown Vancouver, but I've never lived in condo. From what I hear there are limitations to rentals if I'm not the original owner.

1.I hear that a condo building has a limitation of number of units it can be rental units. If there are other first hand owners who are renting their units, they always budge in front of the queue so a second hand owner has to wait in queue to rent.

2. Also, is it true that a condo even if there is nothing wrong with it has to be demolished after a certain time (like say 50 years) for a freehold strata. I can understand this to be the case for leasehold strata.

Care to tell us your thoughts?
6 replies
Deal Addict
Jun 20, 2011
2095 posts
1083 upvotes
VANCOUVER
1. Depends on the condo and the strata rules. Usually you know on the print out the realtor hands out. Since rentals are such a huge thing in the YVR market the realtor should know. I've been to several open houses where I've asked and right away they say "no rentals", "some rentals, max 4 units", "no limitations" so just ask. If there is a rental pool, then yes you will need to put your name on a list and wait your turn.

2. This one I am not sure. I've never heard of a time limit and if you drive around the city there are buildings that are really old that still haven't been tore down. Mind you, those are being sold to developers so they can put up highrises. Like the area behind Metrotown along the skytrain route.
Member
Jan 10, 2008
261 posts
6 upvotes
GTA
DDHLeigh wrote: 1. Depends on the condo and the strata rules. Usually you know on the print out the realtor hands out. Since rentals are such a huge thing in the YVR market the realtor should know. I've been to several open houses where I've asked and right away they say "no rentals", "some rentals, max 4 units", "no limitations" so just ask. If there is a rental pool, then yes you will need to put your name on a list and wait your turn.

2. This one I am not sure. I've never heard of a time limit and if you drive around the city there are buildings that are really old that still haven't been tore down. Mind you, those are being sold to developers so they can put up highrises. Like the area behind Metrotown along the skytrain route.
If it is demolished and sold in freehold strata, each condo owner gets a payout based on a fraction of the land, am I understanding this right?
Deal Addict
Jan 24, 2015
1021 posts
310 upvotes
Canadian in USA
This raises a good question. I own a condo that I rent out. Used to be my primary residence but I moved and instead of selling I found a tenant. Building is about twenty five years old now, how many more years does it have?

My guess is buildings last a hundred years but the OP thinks 50.

Anyone have data?
Deal Expert
Jan 27, 2006
21844 posts
15620 upvotes
Vancouver, BC
Buildings will last as long as people will maintain them. The problem with many condo developments is that the strata is cheap and don't want to do extra repairs to get the building in top shape. So, those 'extra' repairs start building up and sooner or later things start looking bad.
Sr. Member
May 26, 2010
575 posts
139 upvotes
lukesky wrote: I'm thinking about a rental condo for a family member in Downtown Vancouver, but I've never lived in condo. From what I hear there are limitations to rentals if I'm not the original owner.

1.I hear that a condo building has a limitation of number of units it can be rental units. If there are other first hand owners who are renting their units, they always budge in front of the queue so a second hand owner has to wait in queue to rent.
To be honest, there is little in the way of one size fits all legislation regarding this (other than the big one I detail below). The listing real estate agent should know the ins and outs of the rental restrictions for said building - and during the purchasing process you would be provided with the bylaws of the Strata Corporation - which will definitively answer your question.

However, as you are asking about second hand vs new condos - since 2010 a Strata Corporation does not have the ability to change rules contravening the Strata Corporation's Rental Disclosure Statement. Most developers do not restrict rentals (and this was historically a decision taken upon by a Strata Corporation's members) as they are in the business of selling units, and do not want anything restricting this - so for all intents and purposes you are pretty much guaranteed any post 2010 condo is going to be free of rental restrictions (although obviously do your due diligence and confirm with your real estate agent).
2. Also, is it true that a condo even if there is nothing wrong with it has to be demolished after a certain time (like say 50 years) for a freehold strata. I can understand this to be the case for leasehold strata.
Completely false. For a building which is in good condition the only way that a Strata Corporation can be "liquidated" is via a unanimous vote of the ownership per the Strata Property Act. In this case the holdings would be sold and distributed by a schedule of interest upon destruction, or by a proportional share of the common assets after an independent appraisal.

This is probably going to be a growing issue over the next 30 years in Strata Corporation law, as we are at the point when a lot of cheap construction 1970s wood frame buildings are reaching a pretty old age. There is also density to consider. A 20 unit low rise on a monster parcel of land will have an easier time finding an purchasing offer that suits all owners in a unanimous vote than a 110 unit high rise on a small parcel of land (which may see owners receiving less than the value of their unit).

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