For owners in two old Coquitlam condominium projects it was “like hitting the lottery” when they sold the entire complexes for real estate development – showing that bulk sales that arise using B.C.’s Bill 40 process can be quick and profitable.
Introduced in July 2016, Bill 40 is an amendment to the provincial Strata Property Act that allows strata owners to more easily disband strata corporations and sell a condo’s land and entire building to developers.
Court delays and other issues dragged out early attempts at sales under Bill 40 and, in at least two early cases, owners received little more than local market value for their individual units.
But the sales of a 36-unit condo project and a 48-unit condo project, both in west Coquitlam and close to the Burquitlam SkyTrain station, show they can be profitable under the right conditions. Those projects started out using the Bill 40 process, which enables owners to go to court to try to get court approval to sell the buildings if 80% of the owners vote that way in a strata corporation meeting.
In the end, both projects had 100% support from the strata owners, which means the sale did not require court approval and could have been completed even if Bill 40 was never introduced. Also, the sites had been rezoned for higher density and were within a block of a SkyTrain station.
The sale of both low-rise, wood-frame buildings closed in March, just six months after owners had voted to sell.
The deals were co-brokered by Casey Weeks, vice-president of investment at Colliers International. He said the buildings dated to the 1960s and 1970s, and owners were facing expensive repair and maintenance costs.
“For many of these owners, the sale was like hitting the lottery,” Weeks said. “These were all owner-occupiers, so there was no capital gains tax.”
With 36 units on a 30,980-square-foot lot, 633 North Road sold for $14 million, or an average of $388,888 per unit. The second complex, at 705 North Road, with 48 strata units, sold for $20 million, or an average of $416,666 per unit.
The benchmark Multiple Listing Service price for a west Coquitlam condo apartment was $387,700 in March, but would likely have been much less for older apartments in dire need of repairs.
Business in Vancouver covered the rise and impact of Bill 40 extensively earlier this year in a two part series:
•New condo-sale rule brings relief to many, grief to some; and