Additional tips when purchasing a Condo

Some final points of advice when looking to purchase in a Multi-Family building


1) Like mentioned in the Vancouver Courier articles (Condo Pitfalls & Condo Nightmares) that inspired these blog entries, any lack of documentation is an automatic Red Flag! If the building is more than 4 years old, and does not have a extensive building envelope review completed in the last 5 years, you should think twice about continuing with the purchase.

Fortunately the lack of report should become a rarer situation going forward now that Bill 8 of the Strata Property Act has been enacted requiring all Strata’s in BC to commission a ’depreciation report’ within the next 2 years.

Note: On a side comment, it is important for Condo owners to realize that the implementation of these studies will most likely culminate in significant Strata Fee hikes as the full cost of maintaining a multi-family-building is better understood by Strata’s.

2) Never allow yourself to be pressured into a purchase. Subject removal dates are arbitrarily defined periods of time with no relation to a logical time period required to properly vet your purchase. They often can represent hype the agents impart into the process to make purchasers feel they need to ‘act fast’ or loose their buying opportunity. This is far too big of a decision, with far too large a potential liability, to be rushed into without due diligence. Take the time to due it right. If it falls through, it probably is for the best. Any vendor who is seriously interested in selling will ensure the buyer has ample time to vet the purchase as they do not want the buyer coming at them later. In markets where there is a buying frenzy, do not be pressured to buy without subjects, you are already buying at what is often the top of the market and can usually ill afford to take on the additional responsibility of unknown liability.

3) At the lower end of the liability scale is a fully rain-screened dwelling. In general, these buildings are more tolerable of faults in the design of the primary water shedding surface and will usually represent a much lower level of potential liability. At the upper end of the liability scale is a face-sealed stucco building without any significant overhangs and a complicated exterior design with lots of penetrations and architectural ‘features’. For a discussion on these two exterior styles see this HPO bulletin.

4) Remember that just because a building is not leaking now does not mean it will not leak down the road. There is a reason that a face sealed building is no longer allowed by code. It does not work! It is usually not a matter of if problems will develop but a matter of when. There is also the issue where many older buildings (pre-1990) are now looking at energy upgrades to the building to reduce the cost of heating bills as energy costs rise. This is often having a negative and unanticipated impact on the building’s health because as more and more of the interior heat is blocked from reaching the exterior sheathing and cladding, that wall assembly’s ability to survive infrequent wetting is substantially reduced. So as the general housing stock is updated to be more energy efficient, it will be increasing more important to ensure that the walls have a continuous water shedding capability.

I hope these entries have helped. I would be happy to discuss these issues further with you at any time. As some final guidance for you, when purchasing a Condo, I recommend you review this bulletin I send all my Condo clients as part of my inspection process.

BC Home Warranty Program - CBC Story

After reading yet another news storey about home owners that have not found relief from their home warranty provider, you have to ask - Is the system working???

The concept of having builders pay a premium to have their homes covered by a warranty program, in case problems arise post construction is sound. But it will only protect the public if the following is in place:

• The program is not relied on as a catch net for shoddy workmanship (this should be caught by the municipal inspectors and they should have the jurisdiction to comment on workmanship, something they are currently not authorized to do)
• The home actually gets inspected throughout the construction by the warranty provider inspector to ensure compliance with warranty specifications
• The warranty inspectors are required to be trained to the same levels as a municipal inspector and required to update their training on an ongoing basis (they need to be Certified or preferably even Licensed)
• The specifications for the finished structures need to be improved significantly. Homeowners would be shocked at what is not considered a 'defect' by the warranty companies policies. These specifications should be set by public and industry consultation, and not be some big secret locked in the warranty companies vault. There should be a panel of industry experts that sit around a table and discuss what makes a good long lasting dwelling. This panel should include members from the building enclosure science industry. Why not make a home covered by a warranty, a sign of building excellence instead of the same minimal standards represented by the building code.
• The fees paid by the builders need to reflect that particular builders track record (and this should track the head contractor personally and not just a company name). If they build poorly, require a lot of supervision, and their structures result in a lot of call backs - they should be charged more.
• In general, the fees collected should be able to cover the industry re-work required. We do not want another repeat of what happened when the HPO pulled the interest free loans for leaky condo owners because the work required exceeded the money collected.

As a home inspector, I have performed milestone inspections for owners coming up to a warranty milestones, and have always been disappointed at how loose the warranty policies are. Things I would consider a deficiency during a regular pre-purchase home inspection are items the policies do not cover and my clients have no coverage for. I regularly hear from other owners who have had the same concerns in their struggle to get items addressed by the builder to only be told the deficiency is not covered.

We are coming into a new way of building homes in 2011, when the building code introduces changes for phase 1 of a push for more energy efficient homes. These changes come with a need to fundamentally change how walls are constructed (the increases in thermal insulation of walls will require externally insulated assemblies in most cases) and as such, we are going to need the industry to understand the science behind these changes. Externally insulated walls require a fundamental change in how we address vapour barriers and how we build to ensure homes are more air tight and there is less likelihood of warm interior air condensing somewhere within the wall assembly. I believe the vast majority of builders are building things 'the way we have for the last 30 years' and as such, we are setting ourselves up for the next big mass of residential building failures. As such, it is more important than ever, to ensure the consumer is protected from the liability that may be present in these new structures.

My recommendation is to hire your own inspectors. Talk to your municipality - they may have a recommendation for retired municipal building, plumbing or electrical inspector that provides supplementary inspections for home owners who are contracting to have a home built. You can usually also just pay for extra municipal inspections. Some home inspectors may also be able to provide this service, but most do not have the building code training or do not perform building code inspections enough to remain current.

Lastly, make sure your specifications provide a house that YOU will be comfortable with, this often means a home built to best practices, as opposed to minimal building codes. Be willing to invest a little more money and have a building envelope scientist look at the design and have all parties listen carefully to their recommendations. Do not let aesthetic design requirements override fundamental good building science. Make sure your builders/contractors are aware that you will be holding them to a higher standard.

In closing, I support the concept of a home warranty program. But the system, as it stands right now is not working, and even if it was would in my opinion, not result in a guarantee of well built homes. We need improvements to how homes are built, what is covered by the warranty, transparency in the program, and accountability by both the building community and the warranty providers.