Buying a New Condomnium in Vancouver? Be Very Careful
Last night CBC TV's Wendy Mesley had a great story on Marketplace all about the risks inherent in buying a condominium at pre-sale from the developer (or the the marketing company they've hired). You can watch the video on CBC's website (which by the way is getting very good at combining TV and the internet). It is quite long (20+ mins) but if you are thinking about buying a pre-sale in the near future this will make you aware of some of the possible disasters that await you and possibly save you thousands, or at least some headaches. That being said many thousands of people have made 100's of thousands of dollars buying and flipping pre-sale condos in Vancouver over the past several years. Have you?
Some of the "issues" she discussed are mostly due to a presumed buyer's ignorance. Of course the ceiling in the commercial building where they have the presentation centre are higher than they will be in the condominium. And the rooms sizes? Well, she finds a display suite bedroom to be 5 feet longer than shown on the floor plan. I am sure most people could see the difference between 13 feet and 19 feet. Some of these basic issues can easily be solved by taking a REALTOR® with when buying from the developer.
Now the contract issues are a whole other disaster. These contracts are nothing like re-sale contracts. The standard contracts that are used for buying and selling re-sale real estate are created by a team of lawyers who take the interests of both parties into account (exactly how they are weighted is cause for another post), the contracts used at pre-sale sales centres were created by for the developer, by the developer's lawyers, for the benefit of the developer and the developer only. These contracts usually leave the developer the right (among many others) to change the layout, finishings, appliances and just abot anything they like about the building or the suite WITHOUT contacting the buyer. All the buyers thinking of buying a pre-sale condo in Vancouver should read this bulletin from the Financial Institution Commission of British Columbia titled RISKS ASSOCIATED WITH PURCHASING “PRE-SALE” RESIDENTIAL UNITS. The one point mentioned here that I bet very few if any developers are abiding by is at the top of page 2. The second sentence reads "The Real Estate Development Marketing Act provides that a developer must not enter into a contract to sell a development unit unless a copy of the Disclosure Statement has been provided to the purchaser and the purchaser has been given a reasonable opportunity to read it." (italics are mine). I am quite sure this in seldom if ever happening. In fact how would they do those big opening day sales blow-outs if each buyer had to have had "reasonable opportunity to read" the disclosure statement. The disclosure statement is hundreds of pages long, it would take hours to read it. Makes you go hmmmmmmmmm.
Watch the show: Video: CBC's Marketplace: What you should know before you agree to buy a condo
They also came up with a nice list of tips for condominium buyers.
A hat tip to the Vancouver Condo Info blog for the heads-up on this one.
Love to hear your comments below, or you can always email me.
Matthew Collinge: www.604homes.com - Royal LePage Westside
