David's thoughts on anything real estate related


Any one who thinks the Vancouver Real Estate market is in a bubble should think again.  Today a single family lot sold in Kitsilano for $230,000 over asking price with more than 20 offers to purchase.  The 33 foot wide lot, located at 3279 West 3rd Avenue, allows for a duplex to be built under the RT-8 zoning.  5 of the 20 offers were greater than $1.3m.  The asking price for the property was $1,098,000.


Property Photo: 790 15TH AVE W in Vancouver
Please visit our Open House at 790 15TH AVE W in Vancouver.
Open House on Saturday, September 11, 2010 2:00 pm - 4:00 pm
This home fronts a quiet tree-lined street in one of Vancouver's most desirable areas. The 3 bdrm townhome comes with 2 parking stalls, yet this location is so convenient you may never want to drive again. Walk to Whole Foods, Douglas ParkCommunity Centre and the new Cambie Skytrain Station, or simply enjoy a cappuccino at the Java Hut just outside your front door. Enjoy an abundance of natural light because this home is one of the few end units in the community! Schools in the area include L' Ecole Bilingue and Eric Hamber Secondary School. A secure storage locker and bike room help to keep your townhome neat & tidy. You will feel a true sense of community in this family friendly, well maintained building.

A Contingency Reserve Fund Study is a report that may be more common in the future as Strata Councils are faced with the challenge of planning and budgeting for future building maintenance. The document rates the condition of every component of the building from the building envelope and roof to the plumbing and electrical systems. The CRFS will then attempt to assign a cost to replace each of these building components and systems before they fail.


Most Strata condominium owners in B.C. have been subjected to special levies at one time or another. Special levies are assigned when repairs or replacement costs cannot be paid from the council's annual operating budget or their existing capital reserve fund. The fact is, many routine repairs to exterior walls, roofs, piping, etc., can easily exceed $100,000. This can quickly empty the strata's capital reserve fund, and result in levies against current owners to complete the work.

From a REALTOR's perspective, the threat of upcoming special levies can be a deal breaker for a buyer.

In fact, there is no need for condominium owners to continue paying special levies, only the need for some long-term capital budget planning, also known Contingency Reserve Fund Study (CRFS). A CRFS is designed to establish appropriate strata fund contribution levels for a condominium's future maintenance, repair and replacement expenses.

A CRFS is a tremendous tool for strata councils who are faced with uncertain capital expenditures, lack of technical knowledge about a building's maintenance requirements or repair history, a revolving door of strata members, and an established fee schedule that is difficult to alter without sound justification.

However, as a REALTOR, I was recently faced with the challenge of selling a condominium where the Strata Council had hired and engineering company to produce a CRFS.

A CRFS is developed by taking a complete look at the property from an economic standpoint, to reduce the owner's long-term financial burden. Engineering professionals review options to defer component replacement by considering specialized maintenance programs and localized repairs, providing a balanced approach to managing the condominium's finances. The CRFS includes advice on measures to help prevent deterioration, and will also prolong the building component's service lives. This further reduces the owner's exposure to special levies. The CRFS should have the flexibility to balance the owner's present and future needs (or the present owners and future owners' needs!). By using a plan, a condominium may be able to realize an increase in property values.

As you can imagine, because the report is comprehensive in nature, seeing the estimated capital cost of every single building component for the next thirty or sixty years can be extremely intimidating. Most people, truthfully, do not give much thought to what is behind the walls, let alone what is holding them up. As such, it can easily scare buyers away.

What buyers need to realize is that before any work can be started the strata council is obligated under the Strata Property Act to bring major expenses to a vote before assessing individuals living in a building. The act of doing a CRFS does not in itself 'make work' for the strata, it merely identifies what may need to be addressed in a manner that allows the strata to plan adequately for it.

Furthermore, a CRFS also serves as a maintenance plan for stratas, allowing them to prevent replacement and prolong the life of building components.

"A Contingency Reserve Fund Study is a tool that gives the strata council the ability to make educated decisions on when each part of the building may need work."

I look at these studies in a positive light. As a REALTOR working for a buyer, and as a Developer, I would rather understand what could happen in the future than pretend that buildings do not need to be maintained and "hope for the best."

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