January 2018
Few talk about selling an entire condo building.
In British Columbia, where condo buildings have been around longer and are older, there is growing interest in selling.
Selling a condo building may make sense when repair or maintenance costs are high, or when proceeds per suite from a building sale are likely to exceed the sale price of selling suites on the open market. For many, selling a condo building may be preferable to higher condo fees and special assessments to pay for replacement of a boiler, underground garage repairs and pinhole leaks.
These are times when condo owners can and perhaps should work together to sell their building.
This is not an easy process. It requires support of 80% of owners. This will likely require numerous notices and meetings.
One condo building that chose this route obtained 100% support for about a day. The building required replacement of a boiler, underground garage repairs and sealing of pinhole leaks. Their reserve fund was underfunded and unable to pay these costs. Had this situation been allowed to continue, owners would have found the value of their property declining. Increased condo fees plus special assessments were required. Owners then started discussing their options.
Selling the building seemed like the best option. Some disagreed and felt they could get a better selling price on their own. Others were concerned about maintenance costs until the building was sold. A number or owners preferred the status quo. A final holdout to selling the building didn’t want to move for fear of being unable to find another place to live.
The sale was agreed on after the developer agreed to pay about double the assessed value and allowed residents to remain in the building rent-free for a year after closing.
The entire process took a couple of years. When completed, both parties were winners. Owners received more for their properties than was likely on the open market and lived rent-free for a year. The developer was about to obtain land where they could build a larger building in accordance with density allowances.
For condominium corporations facing huge repair costs selling the property may be an attractive option.
