All About Condos

In the midst of the current real estate slump in the US, condos are still doing better than houses, according to the Boston Globe. There were 80% as many condominium sales as single-family home sales in Metropolitan Boston, and condominium prices are not falling as sharply as those of detached homes. They fell by only 3.3% to 3.8% in the first 3 months of this year.

If you live in Massachusetts or are looking into purchasing a condominium unit in the state, a table can be found here that shows the comparison between real estate prices in January to March 2008 and the same period last year.

Since condominiums are a relatively new trend in San Antonio, Texas, the San Antonio Business Journal featured an interesting article about the main difference between traditional detached housing and condominium living: the principle of common ownership and maintenance requirements for the condominium developer even after all units are sold. Often, these requirements and ownership of common areas is transferred to a homeowners’ association by the developer.

Under the Texas Condominium Act, the condominium owner owns rights to the unit itself however specific rights and controls must remain with the developer. Thus, the developer must have a comprehensive document containing the rights and obligations of owners in order to protect the vision for the project.

4. Laches. This defense says that the board did not enforce the rules in a timely manner and it would be unfair to force the resident to comply too late. For example, if you did some renovations that clearly extend your unit or condo space out into the hall or other common areas, the board cannot ignore this and only reprimand you when it is too late to stop the renovations without incurring financial loss.

5. Change of Circumstances. Neighborhood or societal changes can render certain rules useless or unfair. A good example is home businesses, or work-from-home arrangements. Some older buildings may originally have had strict policies about non-residential use of property, however since telecommuting is now commonplace these rules should be scrapped.

2. Waiver. If the association allows rules to be broken by some members then it would be waived, at least temporarily. However the board can still choose to enforce the rules again against all unit owners at any time, with timely notice, proper follow-up, and consistent and fair enforcement of the rules.

3. Estoppel. This is very similar to the previous defense, waiver. The gist is that the board has previously waived or gone against the rules and the unit owner took this as a sign that these rules no longer apply. For example, if the rules state that only residents are allowed to use the pool, but a new condo owner notices that his neighbors bring in their friends and have pool parties every weekend, it would be reasonable for the new owner to assume that this is allowed.

To be continued…

When engaged in an argument with your homeowners’ association about building rules that they think you are not following, it would be helpful to consult this page on condolawyers.com and know your rights.

The basic equitable defenses are explained briefly below, but consult a lawyer in order to ensure that they apply to your particular situation.

1. Unclean Hands. Also known as “selective enforcement”. Simply put, if the association board members are violating the rules themselves or allowing others to violate the same rules they are accusing you of not following (for example, if the building rules say that grilling on balconies are not allowed but the board members themselves enjoy barbecuing hotdogs on their balconies), they have no right to enforce these rules on you or to single you out maliciously.

To be continued…

Condo sales activity in three of Canada’s eight major markets – Ottawa, Calgary and Edmonton – is expected to drop this year, according to the Metropolitan Condo Outlook Winter 2008 report. At the same time, prices are expected to increase at a more modest rate than previously in all cities in the study except Montreal in 2008.

“In many cities condominiums are filling a need for relatively affordable housing close to the city core. Since prices for single-detached bungalows, for example, are pushing $500,000 in some Toronto and Calgary neighbourhoods and at least $650,000 in Vancouver, condominiums represent an important first step for many housing market entrants,” the report says.

A slowdown in price growth could finally bring a bit of relief to the country’s priciest markets, Vancouver and Victoria, where condos are the only option for many buyers.

In Wellington, New Zealand, housing space is at a premium, and realty developers are likely to be told to build up because there is not enough room to build out, and it is significantly cheaper. The Wellington City Council hopes to house more people in apartment zones at low cost instead of the free-standing houses with lawns that are common to the area.Most of the new apartment dwellers are older people and childless couples. “The next challenge is going to be housing families in apartments,” says Ernst Zollner, the council’s urban development and transport director. The council is putting more thought into building playgrounds and parks, to make sure children are not “cooped up” indoors.

The other critical issue is size. “We need apartments that have more than two bedrooms. At the moment, once you go to three bedrooms it becomes dramatically more expensive.”

The concept of a small business owner purchasing a small space for use as an office is not new, but the owners of a business condominium project in West Des Moines see this as a great opportunity. Small business owners will purchase smaller condo spaces to increase the equity of their company while controlling building and maintenance expenses, providing a good balance between buying an office building and leasing.

“This provides a person with an opportunity to own a small space, which is impossible anywhere else,” developer Jan Berg said. “It provides an opportunity that just doesn’t exist out there; smaller office space is difficult to find.”

Japanese condominium sales may fall for a third year in 2008, according to the Real Estate Economic Research Institute, a Tokyo-based industry publisher. This is another sign that the Japan’s condominium market has “deteriorated”.Building code changes last year delayed projects and construction costs soared, said Akira Mori, chief executive officer of the developer Mori Trust Co. Mori said in an interview on March 24 that “there is a high probability for bankruptcies among condo builders.”The collapse of the subprime market in the U.S. has made it harder for Japanese developers to borrow. At the same time, building materials and land have become more expensive.

In a recent survey from a leading Financial Company i cooperation with the Board of Canada, Toronto Condos are set to increase 2.9% in 2008 compared from 7.6% in 2007.

Median resale prices are expected to go up in 2008, due to the reasonable prices compared to detached homes and semi-detached homes. Vancouver condominiums in comparison are expected to rise to a median resale price of $346,713 in 2008, an increase of 5.7%. Vancouver Condos have risen in price by an average 15.4% every year over the last 3 years and will likely increase 3.5 per cent per year to $389,344 until the year 2012.

Condominiums in Toronto will continue to offer sound opportunities to all segments of the new and resale market including first-time buyers and empty nesters. More importantly, new segments of the market like single Female prospective Condo Buyers are also beginning to enter the exciting market.