With strata-titled properties outstripping detached homes in terms of property sales in the Fraser Valley, chances are most FVREB Realtors will have had at least several – if not scores – of clients for this type of listing. And as more and more first-time buyers enter the marketplace, the attractiveness of strata properties as an alternative or stepping-stone to owning a detached house will only continue to grow.
More complexity = more risk
However, unlike detached homes, strata properties can be considerably more complex to transact due to the increased volume of documentation and the greater variety and number of parties involved. Accordingly, the transaction involves a higher level of risk, both obvious and not-so-obvious. For example, strata properties typically involve reviewing three times as much documentation compared to detached homes, much of it requiring specific knowledge. Strata corporation minutes, financial statements, engineering reports, depreciation reports, and disclosure statements are just several examples of documents needing careful scrutiny. Any one of these reviews could uncover deficiencies or identify areas of concern that could, in turn, put you at risk down the road if you fail to flag them for clients.
Another consideration particular to strata-titled properties is the number of parties involved. Whereas detached homes usually involve a single buyer/seller and their licensees, strata properties often involve multiple actors including the strata corporation, the strata council, a property manager, possibly a strata manager, and potential tenants – all in addition to the buyer and seller. This, along with the greater volume of documentation increases the complexity and only serves to elevate the potential risks. And if that weren’t enough, because of more stringent by-laws and legislation in British Columbia, Realtors in this province actually bear more of the risk compared to Realtors in other provinces if a transaction goes sideways.
Arm yourself with expertise
Although strata property education is not currently mandatory in the real estate profession, given the prevalence and growth of strata property sales, it may be only a matter of time until it becomes so. Just as the Real Estate Council of BC has made Legal Update, Rule Changes: Agency & Disclosure, Anti-Money Laundering in Real Estate, and Ethics for the Real Estate Professional part of the mandatory curriculum for Realtors, a strong case could be made for adding a course on strata-titled properties to the list.
Until then, the best way to protect yourself and your clients is by enrolling in the Strata Fundamentals courses offered by the BC Real Estate Association. Comprehensive and detailed, Strata Fundamentals 1 & 2, employ case studies, group work and self-assessments to help you grasp the complexities of strata properties so that you can provide clients with accurate information.
Strata properties require a unique knowledge base compared to selling single-family homes because many of the challenges are category-specific. Without proper training and preparation, Realtors could be placing themselves at risk, yet only about one-quarter of FVREB members have taken BCREA’s Strata Fundamentals courses. The best advice to the remaining 75%: sign up today – you’ll be doing your clients a huge service and protecting yourself in the process.
FVREB is hosting the BCREA Strata Fundamentals Part 1 course on July 9 and Part 2 on July 23. Each course is valued at 6 PDP Accredited Hours. To enrol, please visit the TLC Calendar.
Source: FVREB Education