B.C.’s new strata laws mean some owners may be forced to sell
Signy Wilson’s ground-level apartment has high ceilings, hardwood floors, a fireplace, a big arched living room window, and a back door onto a private garden where she and her neighbours can gather when the weather is good. Just off Oak Street, she’s close to transit and shops.
It’s ideal living in a city where it’s increasingly hard to find community-oriented housing. Her five-unit condo building was built in the 1930s, so the rooms are unfashionably spacious and designed for long-term living. But Ms. Wilson’s four neighbours have decided to work with a real estate broker who says he can put together a land assembly with the apartment building next door, which is already for sale. The broker, says Ms. Wilson, has told them it will be listed for $6-million, which she figures would land her about $400,000 more than what her unit would sell for if she sold it separately.
But Ms. Wilson does not want to sell. She loves her apartment, and she questions whether she will ever find another place like it. When she attended the initial meeting with her neighbours, she was shocked to discover the changes to BC’s law governing strata – or multifamily – housing that went into effect this past month. The new Strata Property Act allows the termination of a strata with only 80 per cent of residents in agreement instead of a unanimous vote.
Ms. Wilson is against selling the building, but feels that the decision has already been made for her.
“The system is supporting the feeding frenzy that we are in,” says Ms. Wilson. “The recent condo act means the 20 per cent, like myself, that doesn’t want to sell doesn’t have an impact. I said “no” even knowing it would make no difference.”
She knows too that the building will soon require major maintenance that will be costly.
“There are no villains in this story,” she says. “My neighbours aren’t snakes in the Garden of Eden selling out from underneath me. They are saying, ‘Boy, this will make a huge difference.’ One neighbour has mobility issues. They have to move at some point anyway.
“Everybody that comes to this kind of building already has a love for it.”
Instead, she blames the relentless redevelopment in the name of density for pushing people such as herself out of their homes. That, and the failure by the city to appreciate and protect its old character buildings.
Tony Gioventu, executive director of the Condo Home Owners Association of B.C., sat on a committee that researched the change to the strata act, which, he says, came out of a proposal by the development industry, which is always looking for properties to redevelop. The development industry wanted a 75 per cent vote for liquidations of stratas; however, the committee felt 80 per cent was more fair, and a level already in use and working well in Australia and Singapore.
But because the committee had concerns about potential for abuse, they recommended a court application to ratify any agreement to sell a property. Condo owners, such as Ms. Wilson, therefore have a safeguard because any offer will go before a court, where, among other things, it will be decided if the sale is in the best interests of the residents. That part of the process is mandatory, says Mr. Gioventu. Residents who’ve been coerced by a developer or their neighbours into voting yes, for example, would have the opportunity to speak up.
He says he’s seen many cases where elderly people don’t know their rights. They can be targets.
When you’re one of the last holdouts, the pressure from neighbours can be huge.
“And if you are 85 years old, and you are in the last two units out of 40 units, what kind of stamina are you going to have for that?” asks Mr. Gioventu.
And even people who aren’t elderly can be intimidated by an angry mob of neighbours.
“It’s generally presented as, ‘You’re being unfair and unreasonable. Why are you doing this to us?’ People are verbally taunting them. But it happens in co-ops, social housing, not just strata – all types of multifamily living. When lots of money talks, people stop thinking about things like the culture of communities, and ethics, and behaviour and decency,” says Mr. Gioventu.
That’s why he advises all voting to be done by secret ballots. As well, he says stratas should hold regular meetings to keep residents informed so they aren’t surprised by new developments.
Maggie Leithead lives in a co-op in the West End at 1055 Harwood. Her block is also part of the city’s new plan for density, which means her three-storey walk-up can be redeveloped for a 30-storey skyscraper. As a result, her old 29-unit character building was recently sold to a developer, despite her vote against it. According to her co-op’s rules, only 75 per cent had to vote in favour. Over the past year, the division turned the relationships in the building into a toxic stew. Ms. Leithead received hate mail under her door and some residents refused to talk to her.
“We went from being a happy little co-op of folks that cat sat for each other and cleaned the gutters together to hate mail under the doors,” says Ms. Leithead. “It was a pretty unpleasant experience.”
Their troubles started after a developer approached them last fall. He offered them a number big enough “to throw things into a tizzy.” It wasn’t accepted, but it led to the co-op members hiring a real estate agent. The final selling price was $40-million, and Ms. Leithead says her unit is one of the largest, so she stood to gain the most. She paid around $430,000.
“Poor me, I made a bundle, I know,” she says, well aware that most people will have little sympathy for her situation. “But we only bought the place three years ago and we had gutted it and planned to be here till 90. We’re two blocks from the water, two blocks from shopping, half a block from transit. This is a great little building that was completely sustainable – a gorgeous older 1948, meticulously maintained because it’s been a co-op since it was built. It’s sad.”
Her exit strategy will be to leave the city, she says.
“We will be another pair of people with a pocket full of money going to Victoria.”
She feels worse for her easygoing 91-year-old neighbour, and wonders where he will go. The city’s plan includes 25 per cent social or rental housing, but that probably won’t help those that are facing imminent displacement.
“He didn’t need the money and didn’t want to move and now at 91 is forced to go and find a home.”
She doesn’t have faith that the added density will go to residents in a market fuelled by speculation.
“It’s going to be another row of tall buildings with no lights on at night that can’t support local businesses,” she says. “There are just so many different ways we could be approaching density on a human scale rather than the way we’re doing it.”
Residents of the building have a year until they have to move out, which is a fairly common part of the deal. But Mr. Gioventu says most people won’t be able to move until they receive the money from the sale, and he wonders what will happen when the completion date rolls around and a bunch of people need to find homes.
“What will happen is on one magical day when all 100 or so of those owners with $800,000 or so in their pockets will all be on market looking for another place to live? I think we will see bidding wars … and I think that’s where we will see quite a lot of vulnerability – because there will be large concentrations of people wanting to stay in that neighbourhood.
“We will see another housing wave over the next year or so as these liquidations start to proceed.”
Ms. Leithead says her neighbours have already started checking out properties on the market.
“The kicker to all this is now that our deal has gone through, they are saying, ‘Wow, it’s really hard to find something with space.’ It’s like, oh my God, did you not look for eight seconds before you decided?’”