The new rules for short-term rentals are now live:

• The Principal Residence Requirement, meaning short-term rentals can only be offered in the principal residence of a host, plus one additional unit, secondary suite or laneway home/garden suite on the property in communities where populations are greater than 10,000 people.

• The Principal Residence Requirement will function as a provincewide floor for communities with populations of more than 10,000 people, but local governments will still be able to use existing bylaws and introduce additional bylaws that are more restrictive.

• The Principal Residence Requirement will come into effect in more than 60 communities throughout B.C.

• Strata hotels and motels that have been operating in a manner similar to a hotel or motel before Dec. 8, 2023, and that meet select criteria moving forward, will be exempt from the Principal Residence Requirement.

• Non-conforming use of property will no longer apply to short-term rentals. Under previous legal non-conforming use protections, if an existing use of land or a building did not conform to the new bylaw, it would have generally continued with legal non-conforming use. 

• Short-term rental hosts will be required to display a valid business licence number on their listing, where a business licence is required by a local government.

• Short-term rental platforms will be required to share data with the Province.

• Local governments can request that a platform remove listings that do not display a valid business licence.

Full requirements for hosts and platforms to comply with the new rules have also been released and are available in Backgrounder 1 and here: https://www2.gov.bc.ca/gov/content/housing-tenancy/short-term-rentals

READ the full release here.

Spring property market brings positives for buyers and sellers in Victoria

A total of 678 properties sold in the Victoria Real Estate Board region this April, 6.4 per cent more than the 637 properties sold in April 2023 and a 15.3 per cent increase from March 2024. Sales of condominiums were up 1.5 per cent from April 2023 with 208 units sold. Sales of single family homes increased 3.7 per cent from April 2023 with 337 sold.

“The spring market in Victoria kicked off with a gentle increase in sales when compared to last year and continued stable pricing,” said 2024 Victoria Real Estate Board Chair Laurie Lidstone. “These factors, combined with growth in the available inventory, has created a welcoming and more balanced market for buyers and sellers.”

There were 3,017 active listings for sale on the Victoria Real Estate Board Multiple Listing Service® at the end of April 2024, an increase of 14 per cent compared to the previous month of March and a 47.7 per cent increase from the 2,043 active listings for sale at the end of April 2023.

“When we look back to previous spring markets, we will recall challenging conditions that are not present in the market this year,” adds Chair Lidstone. “Last year, interest rates were continuing upwards, which created unpredictability for buyers. The spring of 2022 saw record lows of inventory, which created a pressurized environment for buyers and sellers. The spring of 2021 was also marked with low inventory and impacted by the effects of the pandemic. This year, we have a much healthier supply of inventory with numbers we have not seen since the summer of 2019. Combined with more stable pricing, this market is much easier to navigate for both buyers and sellers. People who are listing their homes can have confidence that they will be able to find a new home, and sellers benefit from the stability of pricing and interest rates. If you are considering making a move, now is the ideal time to connect with your favourite local REALTOR® to create your plan.”

The Multiple Listing Service® Home Price Index benchmark value for a single family home in the Victoria Core in April 2023 was $1,295,800. The benchmark value for the same home in April 2024 decreased by 0.9 per cent to $1,284,600, up from March’s value of $1,279,300. The MLS® HPI benchmark value for a condominium in the Victoria Core area in April 2023 was $564,000 while the benchmark value for the same condominium in April 2024 increased by 0.7 per cent to $567,800, up from the March value of $567,300.

As you may have heard by now, as per Order in Council No. 204-2024, the BC Government has amended the Strata Property Act and Strata Property Regulation, specifically as it pertains to depreciation reports.

Here’s a quick summary of some of the changes:

1. As of July 1, 2024, strata corporations with 5 or more strata lots:

• Can no longer waive or defer obtaining a depreciation report, and

• Must obtain a depreciation report every 5 years.

2. Existing strata corporations without depreciation reports, or those with reports completed before December 31, 2020, have a grace period to acquire new depreciation reports:

• Until July 1, 2026 - for stratas located in Metro Vancouver, the Fraser Valley, or the Capital Regional District (excluding the Gulf Islands and other islands within the CRD).

• Until July 1, 2027 - for stratas located in other areas of BC.

One common strategy that stratas use to minimize strata fees in the present is by “padding their current budget”.

When stratas have had surpluses in previous fiscal years, they often choose to leave these surplus funds in their operating account (often labeled “Retained Earnings” on financial documents). This is common practice and is not in itself problematic, as having some cash on hand gives the strata the ability to pay its bills when they’re due. Having low funds in the operating account can cause issues, as the strata may not be able to pay its bills on time, having to wait for more strata fees to come in before it is able to do so.

So how do stratas “pad their budget”?

This tactic involves using surplus funds from previous years to artificially reduce the need for strata fee increases in the current budget. But, since it’s unrealistic to expect the strata to always have previous year surplus funds to draw from, this practice can be problematic and may require the strata to increase strata fees (often significantly) in the future.

It’s therefore important to thoroughly review the strata’s current budget, to determine if it’s employing this tactic. You’ll most often see these “paddedamounts” listed in a strata’s budget as follows (or a variation of):

• Income from Past Fiscal Year

• Previous Year Surplus

• Income Carried Forward

Supply still key to Victoria’s housing market

A total of 588 properties sold in the Victoria Real Estate Board region this March, 0.3 per cent fewer than the 590 properties sold in March 2023 but a 25.1 per cent increase from February 2024. Sales of condominiums were down 10.2 per cent from March 2023 with 177 units sold. Sales of single family homes increased 1.8 per cent from March 2023 with 286 sold.

“We’ve concluded a rather quiet first quarter and are transitioning into the spring market,” said 2024 Victoria Real Estate Board Chair Laurie Lidstone. “Many of our local REALTOR® members are noting that more shoppers are coming into the market – but this has not necessarily translated into sales numbers. This may change as we move into what is historically the busiest market of the year.”

There were 2,647 active listings for sale on the Victoria Real Estate Board Multiple Listing Service® at the end of March 2024, an increase of 12 per cent compared to the previous month of February and a 34.4 per cent increase from the 1,970 active listings for sale at the end of March 2023.

“The increases in inventory we’ve seen in recent months really help to improve the health of our market,” adds Chair Lidstone. “We have more inventory for consumers to consider when compared with recent years. This additional inventory improves both buyer and seller confidence as it means people have more options and more reassurance that they are going to be able to find their new home. As people buy and move, more properties are added to the available inventory, which supports a much healthier market. Supply really is key, and looking to the future we need to ensure that focus continues on the creation of new homes of all types and price points. If you’re considering a move over the course of the spring market, connect with your favourite local Realtor for to-the-minute insight into our market to create your strategy.”

The Multiple Listing Service® Home Price Index benchmark value for a single family home in the Victoria Core in March 2023 was $1,258,300. The benchmark value for the same home in March 2024 increased by 1.7 per cent to $1,279,300, up from February’s value of $1,247,400. The MLS® HPI benchmark value for a condominium in the Victoria Core area in March 2023 was $549,000 while the benchmark value for the same condominium in March 2024 increased by 3.3 per cent to $567,300, up from the February value of $557,000.

Property Transfer Tax exemptions - April 1, 2024

For many, buying a home is the largest purchase they will ever make, and property prices are making it harder. Every little bit helps, and Budget 2024 aims to give people the financial boost they need to bring buying a home within reach, including:

• Increases to the threshold for the First Time Homebuyers’ Program so it reflects today’s market:
• Qualifying first-time buyers can benefit when they purchase a home worth up to $835,000, with the first $500,000 completely exempt from the property transfer tax. That could mean as much as $8,000 in savings.

• An estimated 14,500 people – twice as many as before – will now be eligible for support to buy their first home, helping them move out of the rental market and freeing up rentals for others.

• People buying newly built homes worth up to $1.1 million will also see lower costs through the newly-built-home exemption.

To help lower the cost and encourage the construction of more rental units, eligible purpose-built rental buildings of four or more units will also receive a property transfer tax exemption until 2030.

Raising these property transfer tax exemption thresholds and incentivizing building of new rentals and homes will save more people more money, an estimated $100 million per year.

For information on PTT including a calculator, click here.

BC Home Flipping Tax - Jan 1, 2025

As part of the Homes for People plan, and to discourage speculators from driving up prices, Budget 2024 introduces the new BC Home Flipping Tax, effective Jan. 1, 2025. This will be a tax on the profit made from selling a residential property within two years of buying it, with specific exemptions for life circumstances, such as divorce, death, illness and relocation for work, among others. Revenue from the tax will go directly to building affordable housing throughout B.C.

For full detail on the budget, click here.

1. To start, it’s important to understand what we mean by “enough”.

If you’ve missed our email explaining how to determine whether a strata has “enough” in its contingency reserve fund (CRF), you can check it out here: Does the Strata Have Enough in its CRF?

2. So, how much can buyers expect to pay in special levies because BC stratas are not saving enough in their CRFs to pay for all their future capital projects?

Because we’ve had a chance to review so many strata corporations all across BC, we’ve gathered some metrics that allow buyers to make more informed decisions about their purchases. Based on the last 1,457 strata corporation reviews we’ve completed, as of today (March 13, 2024), buyers can expect, on average:

• To pay approximately $17,826 in total special levies over the upcoming 10 years, because most BC stratas are not saving enough in their CRFs to pay for all their future capital expenditures.

Depreciation Reports (as they’re known in BC) or Reserve Fund Studies (as they’re known in many other jurisdictions), enable strata corporations to better plan for future maintenance, repair and/or replacement of common property and common assets.

From a buyer’s point of view, depreciation reports are a tool that can help one better understand:

• The likelihood that they may face additional special levies, because the strata may not be saving enough in its Contingency Reserve Fund (CRF), to pay for all future projects.

All strata corporations in BC, regardless of size, must obtain property and liability insurance, including bare land strata corporations and strata-titled duplexes.

1. Property Insurance

A. The strata corporation’s property insurance must be for:

• Common property

• Common assets

• Buildings shown on the strata plan, and

• Fixtures built or installed on a strata lot if built or installed by the owner developer as part of the original construction of the strata lot (e.g., the original flooring, cabinets, etc.)

B. Property insurance must be for the full replacement value (which requires a current appraisal) and insure against all major perils, which include:

• fire, lightning, smoke, windstorm, hail

• explosions

• water escapes

• strikes, riots or civil commotion

• impact by aircraft and vehicles

• vandalism and malicious acts

One surprising fact is that, under the Strata Property Regulation, earthquake insurance is not considered a major peril. However, purchasing a unit in a strata corporation that does not have earthquake insurance can pose significant risks. If that is the case, it is important that you make your clients aware, and advise them to seek professional insurance advice.

2. Liability Insurance

The strata corporation must also obtain and maintain liability insurance to insure the strata corporation against liability for property damage and bodily injury, for a minimum amount of $2,000,000.

3. Strata Homeowner Insurance

It’s important to realize that strata corporation insurance is not the same as strata homeowner insurance. In order to mitigate their risks, many strata owners in BC obtain additional homeowner insurance, which often insures them for:

• Their household contents

• Upgrades made to the unit

• Strata deductible coverage (which protects them in case they are found responsible for paying the strata’s deductible(s).

What is the Form B: Information Certificate?

As per the Strata Property Act, a buyer is entitled to obtain a current and complete Form B: Information Certificate. This document is issued by the strata corporation, or the strata manager on behalf of the strata corporation, and contains:

• Some information about the strata corporation as a whole, and

• Some information specific to the strata lot the buyer is intending to purchase.

When providing a Form B to a potential buyer or a real estate licensee, strata corporations, and by extension their strata managers, must use the most current version of the Form B available.

The Issue with Outdated Form Bs:

From our experience, many strata corporations and management companies are still using outdated or incomplete versions of the Form B.

If you come across this issue, you should request that the strata provide a new Form B, which includes all the required information. This will ensure your clients have the up-to-date information they need, to be able to make an informed decision about their purchase.

Depending on how the subject conditions were written, if the strata has provided an outdated or incomplete version of the Form B, you may be able to obtain an extension for your clients. If you come across this issue, we recommend you speak with your managing broker and/or obtain legal advice.

In addition to ensuring that the latest and complete version of the Form B is provided, it is also important to make sure the Form B is current. Check out our previous email titled “Make Sure the From B: Information Certificate is Current”, to learn why we recommend the Form B should not be older than 1 month

The Latest Changes to the Form B:

As per Order in Council OIC 671-23, as of December 6, 2023, the Form B has been amended, requiring strata corporations to answer the following question, regarding electrical planning reports. If the Form B you received does not include and answer this question, the Form B used is outdated and incomplete, and you should request a new one.

What’s this new Form B question all about?

As noted in the BC Government news release titled “Electric vehicle charging in strata corporations”:

“An electrical planning report helps strata corporations to understand their current electrical capacity and their ability to meet new demands for electricity including charging electric vehicles and other needs such as installing heat pumps.”

More inventory means greater opportunity in Victoria real estate market

A total of 470 properties sold in the Victoria Real Estate Board region this February, 2.2 per cent more than the 460 properties sold in February 2023 and a 37.8 per cent increase from January 2024. Sales of condominiums were down 5.6 per cent from February 2023 with 152 units sold. Sales of single family homes increased 1.8 per cent from February 2023 with 224 sold.

“We saw glimmers of a start to the spring market over the course of February,” said 2024 Victoria Real Estate Board Chair Laurie Lidstone. “In addition to the increase in sales, more than five hundred new listings came to market when compared to last year’s inventory numbers. This much needed inventory gives buyers more selection and more time to make their purchasing decisions. We’ve also seen prices continue to remain stable, which is excellent for buyers and sellers because it makes the transaction much more predictable.”

There were 2,364 active listings for sale on the Victoria Real Estate Board Multiple Listing Service® at the end of February 2024, an increase of 10.5 per cent compared to the previous month of January and a 30.7 per cent increase from the 1,809 active listings for sale at the end of February 2023.

“We noted an increase in townhome sales this past month,” adds Chair Lidstone. “Townhomes are an important segment of missing middle housing, one that is undersupplied in the Greater Victoria area. Hopefully the fifty per cent increase in townhome sales compared to last year will encourage more development of this type of housing to meet our missing middle housing needs. If you are considering a move this coming spring, it’s a great time to connect with your REALTOR® to make a plan.”

The Multiple Listing Service® Home Price Index benchmark value for a single family home in the Victoria Core in February 2023 was $1,251,000. The benchmark value for the same home in February 2024 decreased by 0.3 per cent to $1,247,400, up from January’s value of $1,244,000. The MLS® HPI benchmark value for a condominium in the Victoria Core area in February 2023 was $549,300 while the benchmark value for the same condominium in February 2024 increased by 1.4 per cent to $557,000, down from the January value of $559,000.

A balanced market means opportunity for buyers and sellers in Victoria

A total of 341 properties sold in the Victoria Real Estate Board region this January, 22.7 per cent more than the 278 properties sold in January 2023 and a 3.6 per cent increase from December 2023. Sales of condominiums were up 10.9 per cent from January 2023 with 112 units sold. Sales of single family homes increased 35 per cent from January 2023 with 162 sold.

“Our housing market eased into the new year with a renewed sense of balance,” said 2024 Victoria Real Estate Board Chair Laurie Lidstone. “Sales were up slightly based off last year’s very low numbers, and overall, we saw the stabilization that we observed in late 2023 continue into 2024. Mortgage rates have levelled out, inventory is slowly creeping back up, and we are no longer in that highly pressurized market of recent years which created complicated and sometimes stressful conditions for buyers and sellers.”

There were 2,140 active listings for sale on the Victoria Real Estate Board Multiple Listing Service® at the end of January 2024, an increase of 0.4 per cent compared to the previous month of December and a 23.1 per cent increase from the 1,739 active listings for sale at the end of January 2023.

“I think this balance and stability in our market brings with it an optimistic outlook for the coming months,” adds Chair Lidstone. “If balanced conditions continue, buyers and sellers will have more time to make decisions and there will be less pressure on pricing. Of course, there are many factors that impact the market here in Victoria, and as we’ve seen in the past things can change very rapidly. If you are considering selling or buying, connect with a local Realtor to identify where your opportunities are as we move towards spring.”

The Multiple Listing Service® Home Price Index benchmark value for a single family home in the Victoria Core in January 2023 was $1,224,000. The benchmark value for the same home in January 2024 increased by 1.6 per cent to $1,244,000 down from December’s value of $1,268,000. The MLS® HPI benchmark value for a condominium in the Victoria Core area in January 2023 was $562,200 while the benchmark value for the same condominium in January 2024 decreased by 0.6 per cent to $559,000, down from the December value of $562,000.

1. Understanding Strata Bylaws

Strata bylaws are regulations that help govern the management, maintenance, and use of shared property and facilities in a strata development. They help maintain harmony and safeguard property values.

2. The Challenge with Some Bylaw Packages

Unfortunately, some strata corporations have bylaw packages that are hard to understand. This complexity can be confusing for everyone, from current residents to potential buyers and Realtors. A frequent challenge lies in identifying the most recent and applicable bylaws, and understanding their implications.

3.  Common Issues with Bylaw Packages

For example, we often receive bylaw packages that, in addition to the main set of bylaws, include amendments, upon amendments, upon amendments, upon… you guessed it… amendments.

This layering of amendments makes it challenging to identify the latest, enforceable bylaws. To fully understand the current bylaws, one needs to:

• First obtain the original bylaws and all subsequent amendments, and

• Read through the original bylaws and all amendments chronologically, as filed with the Land Title and Survey Authority (LTSA).

4. If Unsure, Recommend Legal Advice

If you receive a bylaw package with multiple amendments, advising buyers to seek legal advice may be wise. This can help ensure the bylaws are thoroughly reviewed and understood, and it can help identify bylaws which may conflict with the buyers’ needs or lifestyle preferences.

5. Why Bylaw Packages Become Overcomplicated

The root of this problem is often poor advice during the amendment and filing process. Ideally, stratas should follow these steps when amending their bylaws:

• Seek Legal Advice: Get professional guidance to ensure proposed changes are legally enforceable and implement current-day best practices.

• Hold a General Meeting: To gain approval for the new bylaws and/or bylaw amendments.

• Include a Repeal Resolution: This should nullify all previous bylaws, allowing for a new, consolidated package to be filed.

• File the New Bylaw Package: With the LTSA. Only once filed, do a strata’s bylaws become enforceable.

6. Advantages of a Streamlined Approach

By adhering to this process, strata corporations can maintain a bylaw package that includes only the current, enforceable bylaws. This approach greatly simplifies the review process for everyone involved, ensuring the strata’s bylaws are easy to understand and follow.

The quick answer is yes, but we’ll go into more detail here.

As per the Strata Property Act, as of December 13, 2011, strata properties in BC with 5 or more strata lots are required to obtain depreciation reports every 3 years, unless waived by a 3/4 vote of the owners.

For new strata corporations, this requirement kicks in at a specific time. As per the Strata Property Regulation, unless the owners have waived this requirement, new strata corporations are require to obtain a depreciation report within 6 months after:

a) the date of the strata corporation's 2nd annual general meeting (AGM), or

b) if the 2nd annual general meeting (AGM) of the strata corporation has been waived, the last date by which the strata corporation would otherwise have been required to hold that meeting.

While it’s not uncommon for newer stratas to defer obtaining their first depreciation report, as many of its building components are still covered under the strata’s new home warranty, buying a strata lot in a strata corporation which does not have a depreciation report may present some additional risks to buyers, due to the unknown timing and cost of future capital expenditures.

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The 2023 Victoria real estate market year in review 

A total of 329 properties sold in the Victoria Real Estate Board region this December, 2.8 per cent more than the 320 properties sold in December 2022 and a 16.5 per cent decrease from November 2023. Sales of condominiums were up 14.9 per cent from December 2022 with 108 units sold. Sales of single family homes increased 1.3 per cent from December 2022 with 158 sold.

A grand total of 6,207 properties sold over the course of 2023, 8.77 per cent fewer than the 6,804 sold in 2022.

“I’ve spoken a lot this year about our market’s return to traditional seasonal patterns,” said 2023 Victoria Real Estate Board Chair Graden Sol. “And at the conclusion of 2023 we can see that this trend continues. This is a welcome relief for sellers and buyers after an extraordinary five years of real estate market disruption. Everyone benefits from a more predictable real estate market, so it is encouraging to see the rhythm of seasonal trends reestablished. If this continues into 2024, we should see more inventory added in January and February and an increase in sales as consumers prepare for the spring market. True to seasonal form, December met expectations and was a slow month, both for sales and for new listings.”

There were 2,132 active listings for sale on the Victoria Real Estate Board Multiple Listing Service® at the end of December 2023, a decrease of 19.4 per cent compared to the previous month of November but a 26.3 per cent increase from the 1,688 active listings for sale at the end of December 2022.

“The single biggest impact on the housing market this year was interest rates,” added Chair Sol. “The increased cost of borrowing money meant that consumers had less purchasing power, which resulted in a drop in transactions. There is however still huge demand for housing in our market and as we move forward into 2024 and beyond, we need to continue to put focus on the creation of new supply so that as market activity increases prices don’t increase as quickly. The only way to moderate housing prices is to bring supply closer to meeting demand. As always, our market is subject to many influences and the purchase and sale process is complex. if you are contemplating buying or selling in 2023, call your favourite local Realtor who can create the best strategy for you and for your property.”

The Multiple Listing Service® Home Price Index benchmark value for a single family home in the Victoria Core in December 2022 was $1,236,500. The benchmark value for the same home in December 2023 increased by 2.5 per cent to $1,268,000, down from November’s value of $1,286,400. The MLS® HPI benchmark value for a condominium in the Victoria Core area in December 2022 was $565,800 while the benchmark value for the same condominium in December 2023 decreased by 0.7 per cent to $562,000, down from the November value of $577,400.