Changes to the Condominium Property Act
Earlier in 2012 The Provincial Government of BC introduced a series of changes to the Strata Property Act that will alter the way condo complexes operate and how buyers will evaluate different properties. These changes should introduce an additional level of protection for both buyers and existing condo owners. Under the rules that come into full force in December 2013, strata corporations will be required to commission depreciation reports.
These depreciation reports will provide a comprehensive study on the common physical components in a strata building and provide a plan to renovate and renew these components over a 30 year period.It would be fair to say that this type of report will provide the strata corporation with the foundation to plan and implement work that will need to be done to a building as it ages. Not only will this type of report forecast when major building components such as roofes and roadways need to be repaired but it will also require the strata corporation to adequately plan for the financial aspects of these major repair and replacement projects. This major change to the strata property act will alter how condos are sold in the future.
The buyer will now be able to request a copy of the depreciation report to more accurately research what it is that they are getting into.
Lenders may also require copies of the reports so they can see whether the building presents a lending risk. Now, not all strata complexes will be required to prepare these extensive reports, there are rules that create exceptions. Firstly a strata complex with less than 5 units will be exempt and if a strata corporation passes a special resolution requiring approval of 75% of the home owners, they can create an 18 month exemption. For more information on these changes and changes to the requirements of the Strata Form B, you can visit the Condo Home Owners Association of BC where you'll find a number of downloadable documents.
First Time Home Buyer Bonus Update
In the spring of 2012 the BC Provincial Government created an incentive program for First Time Buyers to enter the BC real estate market.
At that time the incentive was a tax credit that could be used on their income tax return in the event that a First Time Home Buyer bought new construction whether it be a home or a condo style property. Later in the year, when the program received its final approval in the legislature, the program morphed and became even better.
Rather than the home buyer receiving a tax credit, which they would use on their income tax return the government created an actual cheque that they would send the home buyer shortly after they buy a qualifying new home.
This is a significant improvement to the original concept and it is worth noting that this incentive will expire early in 2013. Here are some of the key elements that need to be considered for a qualified applicant to purchase a new home or condo and take advantage of the program. The buyer has to be a first time buyer, they have to occupy the property as their primary residence, the contract has to be written after February 21, 2012 and the deal has to close before April 1, 2013.
Here's the great part of the program, the cash incentive is 5% of the purchase price up to a maximum of $10,000. This would allow someone to buy a $200,000 condo and basically the government provides the minimum 5% downpayment. It's like finding free money for your downpayment. This program does comes with a potential logistical challenge, the money from the government doesn't arrive till after the closing, so the purchaser has to find the downpayment and wait to be reimbursed. The good news is that there are several options that can be explored to deal with that scenario. For a more in depth review of the criteria and details affecting this program, feel free to give me a call or send me an email. I'm John Charbonneau with TMG The Mortgage Group, reminding you that we make mortgage shopping easy.