Realtors, condominium owners and prospective condo buyers in British Columbia have slowly had the rug pulled out from under them since autumn 2019, when word first started seeping out that the province’s strata corporations – essentially the owners of multi-family projects like condo towers and townhouse complexes – were facing enormous increases to their insurance premiums.
As more news outlets have latched onto the story, anxiety among condo owners has only intensified. Those with mortgages coming up for renewal are facing the prospect of having their financing pulled – no lender will fund the purchase of an uninsured building – while others are seeing their monthly strata fees increase by hundreds of dollars.
The situation remains fluid, with no course of action having been laid out by the provincial government or the Canadian Council of Insurance Brokers. That means realtors in the province will be facing a flurry of questions from their clients.
In an attempt to prepare BC’s realtors for the looming crisis, the British Columbia Real Estate Association has added a clause to its contract of purchase and sale that will help clients determine the insurance status of the condo they’re looking to buy.
“It’s really protecting prospective buyers, so [a building’s insurance history] is not a mystery, so that they don’t sign on the dotted line before they know, full disclosure, what the situation is around insurance,” says BCREA CEO Darlene Hyde.
Hyde, who bought her own condo ten years ago without even considering her strata’s insurance situation, says the information available to consumers has never been as available or as transparent as it now desperately needs to be.
“[This new legislation] brings it to the front,” she says, adding that realtors need to make their clients aware that if they’re considering the purchase of a condo, they have the right to view two years’ worth of strata corporation meeting minutes.
“There’s lots of data. There’s lots of paperwork.”
Hyde says the BCREA has lobbied the province’s Ministry of Municipal Affairs and Housing to adopt the Association’s bylaw as a provincial statute, making a strata corporation’s claims history and insurance packages visible to the buying public.
“Those are specific things we are doing to make more transparent to prospective buyers what the situation is with respect to insurance,” says Hyde. “We’re trying to give [our members] tools to be able to protect and inform their own clients. We are collateral damage to this insurance problem. I know the insurance industry and the condo world are at the heart of this in terms of what practices they might have to change. That’s not really in our bailiwick, but it is something we’re keenly watching.”
Although BC’s real estate industry has come under fire for the unethical behavior of a number of its agents over the past several years, Hyde is confident that a deflated condo market won’t lead to a rise in desperate, potentially illegal conduct.
“I don’t see that,” she says. “Realtors have had ebbs and flows before in markets, whether it’s single-family or commercial or whatever. I don’t see this as an impetus for bad conduct at all.”