Strata Parking May Get Simpler

In its newest report (the “Report”), the British Columbia Law Institute’s formidable committee of strata experts (the “Committee”) recommends more changes to the Strata Property Act (the “Act”). If adopted, these changes will make it easier for a REALTOR® to confirm how strata parking is designated. 1

Background

Depending on the circumstances, a strata parking stall may be:

a separate strata lot (except where intended to be used in conjunction with a residential strata lot);2
part of a strata lot; or
common property.
The Committee focused on projects where parking is part of the common property. Where a parking stall is common property, it may also be:

used under a developer’s long-term lease or license arrangement;
designated as limited common property (“LCP”); or
used under a short-term exclusive use agreement (effectively, mere permission).
Effective January 1, 2014, a strata corporation’s Information Certificate (Form B) must indicate the designation of any parking stall associated with a strata lot.

Leases and Licenses

When parking is common property, the developer may use a long-term lease or license to generate revenue from the sale of leasehold interests in parking stalls. In the Report, the Committee recommends eliminating a developer’s ability to lease or license a common property parking stall. 3

While leases vary, this is the general model. Early in the project, the developer incorporates an associated corporation (e.g.; Parking Inc.). Next, the developer gives a lease over the project’s intended parking areas to the associated corporation for a lengthy term (e.g., 99 years). Later, when the developer deposits the strata plan at the Land Title Office, the strata plan designates those parking areas as common property. But, those common-property parking stalls are subject to the prior long-term lease. If a first purchaser of a strata lot wants to use a parking stall, they pay extra. In exchange, the developer causes the associated corporation to partially assign the lease of the parking stall to the first purchaser. Later, when that purchaser sells their strata lot to a subsequent buyer, the first purchaser further assigns their leasehold interest in the parking stall.

Alternatively, developers sometimes use a license, instead of a lease, to create a similar parking scheme. Generally speaking, a license is a contract giving one party the right to use a particular area for a time; it does not create an interest in land. Here, the developer causes the associated corporation to assign the license to the first purchaser, instead of a lease.

The Committee discovered what many REALTORS® already know: 4

… leases and licences have created confusion in many strata properties and sown the seeds of conflict in others. Because leases and licences are private contracts, there is often less of a record of these transactions than is the case for the other options for allocating parking spaces and storage lockers. As the years go by and the strata lot associated with the space or stall is transferred, strata corporations can lose track of these arrangements.
To address these problems, the Committee recommends eliminating a developer’s ability to lease or license a common property parking stall. This proposal is future facing. If adopted, this change would not affect a lease or license previously made.

LCP

By designating a common property area as limited common property (LCP) that area is effectively set aside for one or more strata lots, whose owners may use the area exclusively.5 LCP is a form of common property, but some people miss this point. For clarity, the Committee recommends amending the Act to explicitly define LCP as a form of common property.6

The Committee also recommends extending the time a developer may unilaterally amend a strata plan to designate a parking stall as LCP. Currently, a developer has two ways to do so any time before the first annual general meeting (“AGM”).7 The developer can amend the strata plan to designate a parking stall as LCP for the exclusive use of a strata lot. Plus, if certain criteria are met, the developer may amend the strata plan by designating up to two extra LCP parking stalls for the strata lot. The Committee recommends extending the time for a developer to exercise these rights to the fifth AGM.8 What if, by the fifth AGM some common-property parking stalls remain? The Committee recommends amending the Act to provide that, by default, any parking stall that the developer has not already designated as LCP by the fifth AGM will remain common property.

Summary

If the provincial government adopts these helpful reforms, it will simplify strata parking.

Meanwhile, the Real Estate Council of British Columbia (“Council”) expects a listing REALTOR® and any buyer agent to inquire about parking associated with a strata lot. While Council expects a REALTOR® to read the Form B’s parking information, experienced licensees know this is only part of the puzzle. Whether a REALTOR® acts for the seller or buyer, if the Form B is incomplete or the parking information conflicts with other information, the REALTOR® should investigate and warn their client to seek legal advice.9

For more information about strata parking, see Council’s Professional Standards Manual or the Committee’s Report.

BC Homes Sales Set to Normalize in 2020

Vancouver, BC – September 5, 2019. The British Columbia Real Estate Association (BCREA) released its 2019 Third Quarter Housing Forecast Update today.

Multiple Listing Service® (MLS®) residential sales in the province are forecast to decline 5 per cent to about 75,000 units this year, after recording 78,505 residential sales in 2018. MLS® residential sales are forecast to increase 11 per cent to 82,700 units in 2020, just below the 10-year average for MLS® residential sales of 85,800 units.

“BC markets are showing signs of recovery after nearly a year and a half of policy-induced declines,” said Brendon Ogmundson, BCREA Deputy Chief Economist. “We expect that recovery to continue into next year, with home sales normalizing around long-term averages.”

A recovery in home sales has slowed the accumulation of resale inventory, with active listings still well short of the previous peak in 2012. That leaves market conditions at the provincial level essentially balanced with little upward pressure on prices. We anticipate that the MLS® average price will decline 2.4 per cent in 2019 before rising modestly by 3 per cent to $718,000 in 2020.

8 simple ways to save energy (and money) while on vacation

Out of office message? Set. Luggage? Packed. Thermostat? Cranked. EEK!
If you’re like most British Columbians, your home works hard to keep you warm during the chilly winter and cool during the scorching summer months. While it’s bad manners to keep a vacation waiting, take a few minutes before you set off on your beach/tropical/European getaway (#blessed) to ensure your appliances get a break while you’re gone.

Adjust
1. Air conditioning
“Ch-ch-ch-ch-changes. Turn the AC down.” Just like David Bowie sang (those are the lyrics, trust us), an easy way to reduce energy use and save money is by turning your air conditioning unit down, or better yet, completely off during your summer getaways.

2. Thermostat
During the hot summer months, there’s no sense wasting energy and money by cooling rooms when there is no one home to chill in them. If you’re getting out of town in the winter, your thermostat should be set around 10° Celsius in order to keep pipes and appliances from freezing. With a programmable or smart thermostat, you don’t need to worry about forgetting to adjust the temperature. Smart thermostats can be paired with your smartphone and controlled with an app. Depending on the model, you can even adjust the temperature in your house remotely from the road, plane or beach.

3. Refrigerator
You can save energy while you’re away by adjusting the temperature to higher settings on your refrigerator by one or two degrees. Your food will stay cold and you’ll save money. A win-win!

If you’re heading on an extended vacation, consider cleaning your refrigerator out and turning it completely off. If you decide to go this route, be sure to leave the refrigerator door propped open and some baking soda inside, which will leave your fridge as refreshed as you after your holiday.

4. Blinds and curtains
While your blinds and curtains obviously aren’t consuming any energy, you can use them to keep the heat out during the summer and in during the winter. Be sure to close all blinds and shades to keep the sunshine out and reduce heat gain in your home during the summer. During the winter, closing shades and blinds will keep the cold air out.

Unplug
5. Power vampires
Chargers and computers and printers, oh my! While the spooky season should be in October, phantom power usage is a scary thought year-round. Before leaving home, be sure to unplug all of your electronics, including TVs, DVD players and game consoles, as well as microwaves, coffee makers, toaster ovens, etc. If this sounds like a bit of a chore, try putting your electronics on smart power strips, which automatically shut down power to products that go into standby mode. This will save you the trouble of hunting your home for sneaky power vampires or contorting your body into a pretzel to grab hard-to-reach plugs. Unplugging and powering down can also reduce the risk of electrical fires and protect your items from potential power surge damage. Just like you, your electronics and appliances need to unplug and unwind.

Turn off
6. Water heater
Reduce standby losses, which occur when no one is home to use the hot water, by setting your natural gas water heater to “low” or “vacation mode.” If you have an electric water heater, set the temperature as low as possible.

7. Lights
While you may be tempted to leave a few lights on at home while you’re out of town, this is a waste of energy and can be a dead giveaway that no one is actually at home. If you’re not comfortable turning off all the lights, set them up with automatic timers to deter potential intruders while saving energy.

8. Fireplace
Even when you’re not using your fireplace, your pilot light may still be drawing energy. If you have a natural gas fireplace, turning off the standing pilot light while you’re away can reduce between 600 and 1,500 BTU per hour, and reduce extra heat in your home. A licensed gas contractor can turn it on again during your annual appliance maintenance, so it’ll be safe and ready for fall. Of course during the winter, fireplaces should be turned off while you’re away, but the standing pilot light can be left on so that you can cosy up by the fire as soon as you return from your tropical trip.

Following these simple tips can help reduce your energy use, keep you safe and save you money (to put towards your next vacation, of course).

Take a few minutes to unplug, adjust and turn off your appliances, then kick back and enjoy!

Real estate cooling down

Summer is heating up in Penticton while the real estate market is cooling, according to the South Okanagan Real Estate Board.

“We are seeing a bit of a slow down,” said Dori Lionello, president of the SOREB. “Houses in the $500,000 to $700,000 aren’t selling as fast as they were.”

According to the SOREB June statistics, a total of 89 residential properties were sold in Penticton. Year to date, 432 residential properties have sold, down from 550 the same time period last year.

“Prices are stabilizing,” said Lionello.

It took an average of 62 days for a single-family home to sell in Penticton, compared 49 in 2018.

“If you price your house properly, it can sell faster,” she added. “I actually went into a bidding war on a home in Naramata but that is rare these days.”

As a realtor in Penticton, Lionello has some clients waiting to see if prices drop.

Despite the slowdown, the typical price of a single-family home sold in Penticton climbed in June to $567,585, compared to an average of $536,754 for all of 2019 so far, according to SOREB statistics.

The Penticton market remains tied to Vancouver market, Lionello said. For most of 2019, homes on the Coast weren’t selling and when they did, they had to drop their prices to do so. But Vancouver’s market is starting to see some movement.

Lionello currently has several clients from the Coast who have sold their homes and want to move to Penticton, some looking for waterfront.

“Vancouver homes are starting to sell again and a lot of those people are moving to the Okanagan,” she said. “We are exempt from the speculation tax here so that helps.”

Albertan retirees make up some of the migrants to South Okanagan, but for the most part, people sell their homes on the Coast to live the Okanagan lifestyle, she said.

“People are always going to want to live here, so a home is going to be a good commodity,” she said.

The South Okanagan, like Metro Vancouver, is coming out of a red hot market where bidding wars were the norm, she said.

“We had this hot market and then the federal government came in with the [stress test] and new mortgage rules that curbed activity. It’s all had a trickle down effect on the market,” she said. “In B.C., we now have the toughest mortgage rules. It’s so much harder for young families to qualify for a mortgage now so they just can’t get into the market.”

Summerland home prices continue to climb. The average home sold in June was $846,431 compared to $717,456 overall this year-to-date, according to the SOREB statistics.

However, homes sit for sale a lot longer than in Penticton. On average, it took 106 days to sell a home last month in Summerland.

“We aren’t seeing the inventory we saw in South Okanagan like in 2015, but we are still seeing a lot of great options for buyers,” said Lionello.

BC HOME SALES TO RISE IN 2020

Multiple Listing Service (MLS®) residential sales in the province are forecast to fall 9 per cent to 71,400 units this year, after recording 78,346 residential sales in 2018. MLS® residential sales are forecast to increase 14 per cent to 81,700 units in 2020.

 

The 10-year average for MLS® residential sales in the province is 84,800 units. The shock to affordability from restrictive mortgage policies, especially the B20 stress test, will continue to limit housing demand in the province this year.

However, a relatively strong economy and favourable demographics are likely creating pent-up demand in the housing market. Despite the policy-led slowdown in housing demand, the BC economy continues to be highly supportive of housing demand. After treading water in 2018, BC employment growth is expected to double to 2.2 per cent this year. In addition, the unemployment rate is forecast to continue its downward trajectory, falling to just 4.3 per cent in 2020, its lowest level in over a decade.

Against this backdrop, population growth fueled by immigration, as well as the millenial generation entering their household-forming years, provides a solid underpinning to housing demand. The inventory of homes for sale has climbed out of a cyclical low, leading to balanced market conditions in many areas and buyer’s market conditions in some communities and across some product types.

This shift in market conditions has enabled many potential home buyers to be sole bidders of the properties of their choice. Current market conditions are expected to provide little upward pressure on home prices this year, with the average annual residential price forecast to remain essentially unchanged, albeit down 2 per cent to $697,000.

Modest improvement in consumer demand is expected to unfold through 2020, with unit sales climbing 15 per cent and the average residential price increasing 4 per cent to $726,000.

BC Home Sales on the Rise in May

Vancouver, BC ? June 14, 2019. The British Columbia Real Estate Association (BCREA) reports that a total of 8,221 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in May, a decline of 7 per cent from the same month last year. The average MLS® residential price in the province was $707,829, a decline of 4.3 per cent from May 2018. Total sales dollar volume was $5.8 billion, an 11 per cent decline from the same month last year.

?BC home sales increased 9 per cent in May compared to April, on a seasonally adjusted basis,? said BCREA Chief Economist Cameron Muir. ?However, consumers continue to struggle with the negative shock to affordability that stringent mortgage lending policies have created.?

Total MLS® residential active listings were up 23.2 per cent to 41,519 units compared to the same month last year. However, total active listings were down 2 per cent from April, on a seasonally adjusted basis, the first monthly decline since the B20 Stress test was introduced in January 2018.

Year-to-date, BC residential sales dollar volume was down 25.1 per cent to $19.8 billion, compared with the same period in 2018. Residential unit sales decreased 20.2 per cent to 28,711 units, while the average MLS® residential price was down 6.2 per cent to $688,339.

Breaking: Sellers rejoice

The Toronto Real Estate Board says the market is shifting to favour sellers as the number of home sales jumped in May and the number of listings barely budged.

It says there were 9,989 sales in May, up 18.9 per cent from the 15-year low for the month hit last year, while listings grew by only 0.8 per cent to 19,386.

The tightening market helped lead to a 3.6 per cent increase in the average selling price year-over-year to $838,540, compared with a 1.9 per cent increase in April and 0.5 per cent for March.

TREB president Garry Bhaura says that while the market is improving after a sluggish start to the year, sales activity is still below the longer-term norm.

The board says the single-digit price increases are largely sustainable, but if listings continue to lag it could accelerate price growth.

It says many households aren’t listing their homes because they don’t feel there are housing options available to better meet their needs.

BoC says the housing market is still vulnerable to household debt

Close up woman doing finance at home office with calculate expenses.

The Bank of Canada released its review of the financial system Thursday and warned that it was important to remain vigilant to the risk of household indebtedness.

The bank said that while the mortgage stress test and interest rate hikes have slowed household borrowing and improved credit quality, there are still high levels of indebtedness and a large portion is held by households that are highly indebted.

 

South Okanagan home sales come in a little below average in March

The number of homes sold through the MLS® System of the South Okanagan Real Estate Board totaled 128 units in March 2019. This was down 28.1% from March 2018 and was a little below the 10-year average for the month.

chart 1

On a year-to-date basis, home sales totalled 296 units over the first three months of the year a decline of 35.5% from the same period in 2018.

chart 2

“Looking past the monthly ups and downs, the bigger picture so far in 2019 is one of average supply and average demand, with sales running in between the lows of the 2009-2013 period and the highs of more recent years,” said Dori Lionello, President of the South Okanagan Real Estate Board. “The slowdown in demand that began about a year ago, along with a normalization in supply has put the market back into well balanced territory compared to the sellers’ market conditions of the last few years.”

The average price of homes sold in March 2019 was $380,166, edging up 1.1% from March 2018.

chart 3

The more comprehensive year-to-date average price was $386,023, down 2.6% from the first three months of 2018.

The dollar value of all home sales in March 2019 was $48.7 million, falling 27.3% from the same month in 2018.

There were 334 new residential listings in March 2019, up 3.7% (12 listings) on a year-over-year basis.

Active residential listings numbered 1,158 units at the end of March, up 36.6% from the end of March 2018. The long-term average for supply at this time of the year is a little over 1,200 listings.

Months of inventory numbered 9 at the end of March 2019, up from the 4.8 months recorded at the end of March 2018 and very close to the long-run average of 9.3 months for this time of year. The number of months of inventory is the number of months it would take to sell current inventories at the current rate of sales activity.

Sales of all property types numbered 142 units in March 2019, a decline of 31.4% from March 2018. The total value of all properties sold was $54.5 million, falling 41.9% from March 2018.

Home sales in the Northern Region numbered 21 units in March 2019. This was an increase of 16.7% (three sales) from March 2018. The average price of homes sold in the Northern Region for March 2019 was $289,977, up 57.7% from March 2018. That said, averages can suffer increased volatility with smaller sample sizes.