Thursday, November 25, 2010

Describing Parking Stalls and Storage Lockers on Listings

Determining how to describe parking stalls and storage lockers when listing a strata lot for sale can be difficult. Simply because the seller has the use of parking stalls or storage lockers does not necessarily mean that they are available for the purchaser. Unless it is confirmed that the stall or locker will be available for use, it should not be on a listing. Property on a strata plan is designated as either a strata lot or common property (CP), which can be further designated as limited common property (LCP). Both CP and LCP are owned by all owners within a strata corporation; individuals exclusively own their strata lots.

Strata Lot or Part of a Strata Lot

Strata plans can designate parking stalls/ storage lockers as part of a strata lot, in which case the new purchaser will automatically have the use of the area and the listing can identify the stall or locker number. Alternatively, the stalls or lockers would be part of separate strata lots. If the seller is selling both the lot and the parking strata lot, both must be listed for sale and separately transferred to the buyer.

Limited Common Property

LCP is common property that is designated for the exclusive use, not ownership, of a particular strata lot owner and is shown on the strata plan. Where a parking stall/ storage locker has been designated as LCP for the use of a strata lot, it should be indicated as LCP on a listing. The listing can include the specific stall or locker numbers.

Common Property

If a parking stall/storage locker is designated as CP, it is within the control of the Strata Council, unless there is a developer’s lease. The Strata Council has the authority to grant an owner or a tenant exclusive use under the Strata Property Act. When listing a strata lot where the parking stall/storage locker is CP, entitlement of use cannot be included, unless there is a developer’s lease or unless the Strata Council has confirmed the use of the stall/locker. When CP has no lease or sublease and the Strata Council confirms the parking stall/storage locker numbers that the buyer would use, they can be referenced on the listing with “subject to the provisions of the Strata Property Act.” If no stall or locker numbers are confirmed, they cannot be referenced in a listing.

Developer’s Leases

Developers can enter into leases of CP parking stalls/storage lockers to either themselves or to related companies. They then often enter into agreements with purchasers to sublease one or more parking stalls/storage lockers to each purchaser.
One parking stall is often assigned to each purchaser who is either charged for only the additional stall or locker or for all subleases. Generally, the sub-lease provides that the owner must assign the sub-lease to a new purchaser at the time the strata lot is sold and the listing can reference the stall or locker numbers. If a seller sub-leased a parking stall/ storage locker from the developer, they can reference the stall or locker when listing the strata lot for sale, indicating that the area in question is CP but subject to a sub-lease. The stall or locker number can be shown on the listing.

Purchased Parking Stalls/Storage Lockers

In many cases, sellers of strata lots insist that the listing should include the parking stall/storage locker because the seller bought it from the developer. If the area in question is designated as CP, unless there is a lease/sublease arrangement or the Strata Council has confirmed what parking stall/storage locker the buyer will be entitled to use, the stall or locker should not be included on the listing even though it was paid for. Unfortunately, developers can charge purchasers for an additional parking stall or storage locker without designating the area as LCP or entering into a lease/sublease arrangement and the area remains CP which cannot be “bought.” If there was no lease and no designation of LCP, although the developer may have charged the buyer to allocate a parking stall/storage locker, the buyer may not have realized that the developer was acting as the Strata Council who can technically only grant the buyer the use of CP for a one year maximum. If that is the case, the seller could obtain written confirmation from the Strata Council that the same stall or locker would be allocated to the new purchaser. The listing could then reference the stall or locker number and include that it is “subject to the provisions of the Strata Property Act.” Without confirmation from the Strata Council, the listing should not reference the stall or locker number.

Recommendations to the Provincial Government

BCREA recently submitted recommendations to the provincial government regarding the Strata Property Act addressing, among other issues, the challenges around describing parking stalls and storage lockers when listing a strata lot for sale. To view the full BCREA Strata Property Act brief, visit 09StrataPropertyAct.pdf.
Prior to the conveyance of a strata lot, the strata council, strata corporation accountant or strata property management company fills out a Form B Information Certificate (usually ordered by the REALTOR® on behalf of the seller). Based on extensive consultation and feedback from member boards, BCREA noted that potential buyers of strata properties need more and better information as the Form B Information Certificate does not address critical information. In particular, BCREA recommended that the government add new provisions to section 59(3) of the Act to require strata corpora-tions to disclose information about the designation of parking as either CP, LCP, part of the strata lot or subject to a lease with the developer; if the parking and storage is designated as CP, the strata corporation should indicate how it will be allocated to a new buyer and what stall numbers and storage lockers will be assigned to the buyer.

Thursday, November 18, 2010

BC Home Sales Trend Higher

The British Columbia Real Estate Association (BCREA) reports that Multiple Listing Service® (MLS®) residential sales in the province declined 36 per cent to 5,507 units in October compared to the same month last year. On a seasonally adjusted basis, MLS® residential unit sales in the province increased 2 per cent in October from September 2010. The average MLS® residential price climbed 6 per cent to $521,859 in October compared to the same month last year.

"BC home sales have posted moderate gains since the summer months," said Cameron Muir, BCREA Chief Economist. "Consumer demand was bolstered by double-dip in mortgage interest rates and the associated increase in purchasing power."

"Total active residential listings in the province have declined 18 per cent since June," added Muir. "However, the housing market remains tilted in favour of homebuyers."

Year-to-date, BC residential sales dollar volume declined 2 per cent $32.5 billion, compared to the same period last year. Residential unit sales declined 10 per cent to 64,735 year-to-date, while the average MLS® residential price climbed 9 per cent to $502,353 over the same period.

For the complete news release, including detailed statistics, follow this link:

Wednesday, November 3, 2010

Home sales remain steady in Greater Vancouver

Greater Vancouver home sales have remained steady over the past four months, indicating stability in the residential housing market. With the MLS® sales to active listing inventory ratio indicating a buyer's market, properties appropriately priced are selling.

According to the MLSLink® Housing Price Index (HPI), the benchmark price for all residential properties in Greater Vancouver over the last 12 months has increased 4.6 per cent to $579,349 in October 2010 from $553,702 in October 2009. Since June, however, residential home prices in Greater Vancouver have remained relatively unchanged, declining 0.2 per cent.

"We've seen a lot more consistency and less volatility in recent months when it comes to both number of sales and pricing, although it's important to remember that conditions often vary between communities and neighbourhoods," Jake Moldowan, Real Estate Board of Greater Vancouver (REBGV) president said.

Looking at transactions, the number of residential property sales in Greater Vancouver totalled 2,337 in October 2010. This represents a 5.3 per cent increase compared to September 2010 and a 36.9 per cent decline from the 3,704 sales in October 2009.

More broadly, last mont's residential sales represent a 71.3 per cent increase over the 1,364 residential sales in October 2008, a 22.8 per cent decline compared to October 2007’s 3,028 sales, and a 14.1 per cent decline compared to the 2,722 sales in October 2006.

"As we enter the final two months of the year, buyer demand is in closer alignment with supply than we’ve seen for most of 2010," Moldowan said. "Those buying today recognize that they still have a chance to enter the market with near-record low interest rates, while gradual reductions in inventory have eased downward pressure on prices."

Total active listings on the Multiple Listing Service® (MLS®) in Greater Vancouver currently sit at 14,075, an 8.6 per cent decline from last month and a 16.4 per cent increase from October 2009. New listings for detached, attached and apartment properties declined 25.7 per cent to 3,698 in October 2010 compared to October 2009 when 4,977 new units were listed.

Sales of detached properties in October 2010 reached 976, a decrease of 34.4 per cent from the 1,487 detached sales recorded in October 2009, and a 98 per cent increase from the 493 units sold in October 2008. The benchmark price for detached properties increased 6.3 per cent from October 2009 to $796,883.

Sales of apartment properties reached 984 in October 2010, a decline of 38.8 per cent compared to the 1,607 sales in October 2009, and an increase of 52.1 per cent compared to the 647 sales in October 2008.The benchmark price of an apartment property increased 2.4 per cent from October 2009 to $390,074.

Attached property sales in October 2010 totalled 377, a decline of 38.2 per cent compared to the 610 sales in October 2009, and a 68.3 per cent increase from the 224 attached properties sold in October 2008. The benchmark price of an attached unit increased 4 per cent between October 2009 and 2010 to $487,530.

Download complete stats package by clicking here.