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Strata Properties - New Legislation

~ Strata Properties - New Legislation ~

Do you live in, or plan to purchase a Strata property?

If yes then you should know about a new piece of legislation that has been passed in 2011 and is in effect now. How will it affect you? Some people say that it will have a positive impact on the industry and some say that it will have no impact at all. One thing we know for sure is that it will cost more money to live in a Strata property. My sources are telling me that the cost could go up anywhere from $10 - $60 /month just in fees - not calculating some repair bills that may be unnecessary in some people’s opinions. 

Here is some basic information about the Depreciation report.

What is A Depreciation Report?
A Depreciation Report, commonly known as a Reserve Fund Study, is a comprehensive outline of expected repairs, improvements, and common update expenses of a Strata property over time. As of December 13, 2011, Strata Corporations are required to complete a Depreciation Report by December 13, 2013 and every following
three years, unless rejected by a three quarter vote. A Depreciation Report must include a description, estimated service life, and any associated repair costs for a Strata Properties infrastructure including, but not limited to:

· the building’s Structure
· the building’s exterior; including roofs, roof decks, doors, windows, and skylights
· The building’s systems; including electrical, heating, plumbing, fire protection and security systems
· parking facilities and roadways
· common amenities and facilities
· landscaping
· interior finishes; including floor covering and furnishings
· patios and balconies

Similar Reports are already required in Ontario, Alberta, and much of the United States.

If you wish to receive more detailed information package, I have one ready and I can email it to you on request.

Tibor Bogdan


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What is a pre-sale?

Example scenario: When the developer intends to build an apartment building and applies for financing, the bank will grant financing under certain conditions. One of them will likely be a certain percentage of pre-sales the developer will need to secure before receiving the funds.
It is common practice for a developer to approach several real estate investors and offer them an opportunity to purchase units of the non-existent building at a discounted price, and on good terms.

Once the number of pre-sales is accomplished, the developer goes ahead with the construction, which will likely take two years or longer to complete. During construction, their marketing team offers the remainder of the units for sale at market value to the public.

If you are a RE investor, you know that it is preferable to be buying at the pre-sale prices, not market value prices.

The question is, how do you get the invitation to buy a pre-sale?
In the past many years, investors have made substantial income by buying at wholesale prices and selling at retail prices even before they needed to complete their purchase. I saw many of them lining up and sometimes even camping overnight in front of the sales center to get a chance to buy at lower prices, but not everyone was lucky enough. You needed to be well-connected to get an opportunity, and you had to act fast.

Today is a bit of a different story. Several projects in the Lower Mainland and Fraser Valley offer really good prices and incentives to secure a unit now and complete the purchase two or three years later. The list of incentives varies from one project to the next. Besides attractive prices, you can get low deposit amounts (5-15%), low or no assignment fees, free updates, a mortgage rate buy-down program, extra parking and more.

A month ago, I helped a few of my clients purchase a presale in Surrey that sold out in 2 days, and I know of another good developer that will be offering a few units for sale as well.

If you would like to know more about these opportunities, I would encourage you to call or email me, and I’ll be happy to send you details on those projects.
Kind regards,
Tibor Bogdan
Century 21 Creekside Realty Ltd.
45428 Luckakuck Way #190, Chilliwack, BC V2R 3S9
cell: 604-855-2521
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