REPORT:

Homeowner Protection Office reports on new leaky condo findings

September 7, 2008 –The Homeowner Protection Office’s (HPO) new report
Assessment of Demand for the HPO Reconstruction Program has been receiving a lot of attention in the media recently and its findings indicate that the bad news for leaky condo owners is far from over.

Although leaky condos aren’t making as many headlines as they did during the original 1982-1999 leaky condo crisis, that doesn’t mean the problem has been solved.

“Basically this report is an investigation into market inventory. Its purpose is to give the province an update on the leaky condo situation,” explains the Condominium Home Owners Association’s Executive Director Tony Gioventu. “The rehab program has been underway for almost ten years and in 1999, nobody really knew how long it was going to
take, how many buildings were going to be fixed or how costly it was going to be.”

The HPO’s Chief Operating Officer Bob Maling agrees. “We had suspected for some time that we really hadn’t seen a complete picture,” says Maling. “The fact that applications for financial assistance weren’t declining made us take another look at the numbers and we realized that an update
from the original Barrett Report was needed.”

Published in 1998, the Barrett Report was a full-scale investigation of the quality of condominium construction in British Columbia.

Maling believes their new report will set the stage for what will happen next in our province, though is concerned that inflation, higher priced construction materials and labour shortages will make repairs more difficult over time.

“We’re predicting significantly larger expenses than what we’ve seen in the past,” explains Maling. “The Homeowner Protection Program is minimally funded. It is wholly dependent on how many new condos are built in BC and if that Your Window to REBGV Government Relations
Homeowner Protection Office reports on new leaky condo findings
market starts to decline, this means more and more unmanageable
debt for the HPO.”

In light of these findings, Maling had some timely tips for REALTORS®:

• Always be mindful that there are a lot of multi-unit
  buildings throughout Metro Vancouver that are leaky
  condos or could potentially be leaky condos in the future.
• Always be cautious when acting for a seller or a buyer in
  a multi-unit building.
• Always make sure that your clients have access to strata
  minutes and advise that they check for any indication of
  the following:

1. Water penetration problems
2. Building repairs
3. Previous building audits where problems have been ignored; and
4. Upcoming building audits
   

“Be extremely cautious about the risks you’re taking while representing buyers and sellers in any buildings built between 1982 and 1999,” advises Maling. “Make sure your clients have their eyes wide open.”

Key findings from the new HPO report

• It indicates that 159,979 strata units were built province-wide
  between 1982 and 1999. During this period, approximately
  72,000 units suffered from “premature building envelope
  failure.” Other scenarios in the report suggest this number may
  be higher.
• It estimates that only 42 per cent of all leaky units have been
  repaired to date, which means 58 per cent (or 41,529 units)
  still require repair.
• It concludes that concrete high-rises develop water problems
  at a slower rate than wood-frame buildings and that
  approximately six to ten high-rises, often with 100 or more
  units per building, are identified as leaky buildings every year.

Source: REBGV Open House Newsletter