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Condo Smarts: Tips for navigating a presales agreement

This is a contractual agreement where a buyer agrees to complete the purchase of the strata lot under certain conditions.

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Dear Tony:

How do we find out the costs and liabilities of a new strata highrise in a development in Burnaby with several air space parcels when it is a presales purchase?

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We have asked in the sales office, and the only answer we receive is “the expenses of each property are allocated to that property only.”

We lived in a strata with an Air Space Parcel Agreement (ASP), where this was not the case. The agreement can significantly impact strata fees and the obligations of the strata council and managers to administer property.

Doesn’t the legislation require the terms and conditions of the agreement to be included and disclosed prior to any sales?

— Margo Walker, Toronto

Dear Margo:

A presales agreement is not a purchase or sale of a strata lot. Instead, this is a contractual agreement where a buyer agrees to complete the purchase of the strata lot under certain conditions.

As there are no established disclosure conditions required by the Real Estate Development Marketing Act for presales, the developer has no obligation to disclose any specific details of an ASP at this time.

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Once the presales period is over, a disclosure statement will identify the legal relationships that will be created under the ASP agreements. It is impossible to disclose an agreement that does not yet exist at this point.

An Air Space Agreement indicates there are multiple properties within the base elevation that share the property, access to each property, building structures, services, cost and liabilities. Think of this as five neighbouring detached houses suddenly stacked one above the other. An ASP may have only two properties owners or upwards of five to seven or more, depending on the scope and size of the property.

They are an effective use of property densification and enable multiple uses of property. All property owners will have some portion of shared access, such as elevators that travel through multiple levels, building systems such as roofing, sanitation, heating and ventilation that are interconnected, and parking facilities.

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The ASP agreement will set out the conditions for shared costs, authority over property use, and joint liabilities such as the placement and maintenance of insurance. Once the disclosure statement is filed for the purpose of marketing the property, the air space agreement will be created.

Whether the property is a new development or existing, a successful relationship between the property owners will require all parties to understand the implications and cost-sharing obligations of the ASP.

The ASP is filed in the Land Title Registry. It is a form of easement or covenant. In addition to the monthly strata fees and contributions to the contingency reserve fund within the strata corporation budgeting, look for line items identified for the funding of the ASP obligations.

If you are shopping for a new home, check out the Home Buyer Master Class series created by Home Builders Association of Vancouver.

For further information on ASPs, go to choa.bc.ca and use the search for Air Space Parcels, Guide 600-006, for an extensive guide to understanding their function and operation.

Tony Gioventu is executive director of the Condominium Home Owners Association. Email tony@choa.bc.ca.

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