Archive for November, 2019

Creekside 24076 112 Avenue Maple Ridge 130 three bedroom homes by StreetSide Developments

Saturday, November 30th, 2019

Creekside has family-friendly allure

Kathleen Freimond
The Vancouver Sun

Back in 1874, about 50 families decided at a group meeting to incorporate and established one of British Columbia’s earliest municipalities, Maple Ridge. They were optimistic that the community would be a great place to raise their children. That attitude hasn’t changed and over the years as new residential developments have continued to attract young families to the area.

Creekside, a project by StreetSide Developments, is a good example.

Located on a six-and-a-half-acre site on 240 Street and 112 Avenue, Creekside will have proximity to Siegel Creek and the green space in the southwest corner of the site.

The finishing touches are being made to the first few homes in the 130-unit project, says Jonathan Meads, vice-president at StreetSide Developments, adding that the development will be completed in planned phases starting in the northeast corner and progressing southwards.

While Creekside is attracting interest from across Metro Vancouver, most potential buyers are from the Maple Ridge area, Meads says.

“Typically, it’s families moving up from smaller townhouses who are looking for some extra space, or downsizers who no longer want to maintain a large single-family house, but still want to live in a roomy home,” he says.

Buyers can choose from five floor plans ranging in size from 1,424 to 1,714 square feet. While the A and A1 plans offer three bedrooms and three-and-a-half bathrooms with a downstairs (at grade) rec room that can be a comfortable guest suite or fourth bedroom, the two B plan choices comprise three bedrooms and two-and-and-half bathrooms. The smallest option, the 1,424 square feet C plan has three bedrooms and two-and-a-half bathrooms. Garages, tandem or side byside depending on the floor plan, have extra space to accommodate a workshop or for additional storage, says Meads, adding all homes have outdoor space.

For the interior design, Jamie Judd at Portico Design Group, took her inspiration from the setting.

“Creekside is uniquely nested within nature, yet close to schools and shopping. I kept the look clean and contemporary while utilizing natural-looking materials,” she says, adding her goal was to create a design to appeal a wide range of buyers.

“The architect [Bingham Hill Architects] did a great job of incorporating large windows – it helps to bring in a great amount of natural light as well as showcase the beautiful nature that surrounds the buildings,” Judd says.

Complementing the natural sunlight, all lighting fixtures are LED and energy efficient.

The two showhomes at 24076 112 Avenue each display one of the colour palettes: warm and cool. In both schemes, the backsplash is a standout: two-inch-by-nine-inch ceramic tiles laid in a chevron pattern.

“I wanted this to be a feature in the kitchen, something a bit traditional done in a contemporary way,” notes Judd.

The clean lines of the slab cabinet doors and drawer fronts in the kitchens and bathrooms enhance that up-to-date ambience.

The major appliances are by Whirlpool, including the gas range, counter-depth refrigerator, chimney-style hood fan and dishwasher, as well as the front-loading washer and dryer.

In the A-plan display home, the interiors show the warm scheme with white quartz kitchen countertops and taupe-tone cabinets. In this layout, the double-bowl stainless-steel sink is below a window, leaving the island to serve as extra workspace and a convenient place for the kids to enjoy a snack.

The interior design in the B-Plan townhouse features the cool palette. For this scheme, Judd specified white cabinets in the kitchen to contrast with the dark wood accent cabinets around the refrigerator and the spacious full-height pantry cupboard.

The double undermount sink in the island, with its elegant Grohe faucet, creates one point in the work triangle in kitchen, while the refrigerator and the slide-in gas range with cast-iron grates mark the other two positions.

The contemporary design extends to the bathrooms where the glass shower enclosure in the ensuite bathroom gives the space an airy feel, while the double sinks and storage in the vanity ensure its functionality. The main bathrooms feature soaker tubs.

Creekside will also include a clubhouse, scheduled to be constructed during the second phase. The internal space will be vaulted, says Meads.

“It will offer a kitchen, dining and living area designed for families to gather for parties, groups to get together for meetings, or a Grey Cup party,” he says.

Double doors will open on to a patio that looks across the outdoor space.

“In summer, the patio will have tables and chairs and a barbecue and will be a natural extension of the indoor space. Beyond the patio will be a lawn for games and a children’s play area,” he adds.

Meads says his favourite aspect of the whole project is the design of the interior space, as well as the placement of the homes on the site.

“The space – inside with the high ceilings and oversized windows that let in lots of natural light – and the layout of the site itself with less density than many developments, makes it a hidden little gem,” he says.

All the homes have separate driveways and entrances and are close to a green space or path that connects them to the natural surroundings.

Creekside

Project address: 24076 112 Avenue, Maple Ridge

Developer: StreetSide Developments

Architect: Bingham Hill Architects

Interior designer: Portico Design Group

Project size: 130 three-bedroom homes

Unit size: 1,424 — 1,714 square feet

Price: Starting from low $500,000s

Sales centre: 24076 112 Avenue, Maple Ridge

Sales centre hours: noon — 5 p.m., Sat — Thurs

Phone: 778-572-8218

Website: livecreekside.ca

© 2019 Postmedia Network Inc.

Anatomy of money laundering in B.C. real estate: 12 cases, $1.7 billion, 20 countries and 30 banks

Friday, November 29th, 2019

As British Columbians confront, understand and quantify the effects of money laundering in real estate, there remains skepticism over whether, and to what extent, illicit money can be laundered in real estate

Gordon Hoekstra
The Vancouver Sun

It started with a huge hash bust.

Following up on a tip, the RCMP set up a stakeout and pounced when a freight truck left a warehouse on Mitchell Island in Richmond.

The haul: six tonnes of hashish (a drug made from the resin of cannabis), wrapped in cellophane and carefully packed in wooden boxes.

More concerning — the traffickers’ books showed it was the tail end of a 40-tonne shipment with a wholesale value of more than $140 million.

The RCMP did not know it at the time — and would not find out until a couple of years later, when the U.S. Drug Enforcement Administration corralled a major drug-trafficking kingpin — that the hash shipment was part of a global cartel that had profits of $165 million a year.

Even after being arrested in the warehouse bust, the B.C. ringleader, George (Lorry) Burden, sold off 20 tonnes of the shipment already stashed in B.C.

The cash proceeds from the drugs were laundered in part in real estate in the Lower Mainland: at least seven houses worth more than $7 million.

The year was 1993.

Land and money

As British Columbians attempt to confront, understand and quantify the effects of money laundering in real estate, there remains skepticism over whether, and to what extent, illicit money can be laundered in real estate.

A B.C. government-commissioned report released this spring estimated that as much as $5 billion was laundered in real estate in 2018. But it was based on an economic model and not actual data of money laundering. In response to the report, Vancouver lawyer Garth Evans wrote to Postmedia: “Lawyers and banks aren’t allowed to accept large amounts of cash, so what is alleged to have gone on? The buyers were paying with bags of cash? I don’t think so. It behooves the authorities to provide evidence of real-estate money laundering rather than making allegations.”

It is a valid point.

How money is laundered in real estate is also an important question for an inquiry launched by Premier John Horgan’s B.C. NDP government that will begin hearing evidence next year.

The fact is that laundering money in real estate is not a new phenomenon.

A Postmedia compilation and analysis of 12 cases over the past three decades, including the hash bust in Richmond, shows there are a number of ways to get money into the financial system, ultimately resulting in property purchases that are made with money in electronic or digital form and not, generally, with bags of cash.

Postmedia’s conclusions are the result of an examination of thousands of pages of U.S., Canadian federal and B.C. court records; B.C. property and corporate records; archived Postmedia News reports; and interviews with those familiar with the cases.

The cases — big and small, domestic and international — paint a much wider picture of money-laundering in real estate than has been reported in the past three years in B.C., where the focus has been on B.C.’s biggest money-laundering case, involving the underground bank Silver International in Richmond, where allegedly as much as $220 million a year of largely drug-trafficking cash was cleaned.

Postmedia’s analysis shows laundering methods have included placing cash in multiple banks in exchange for bank drafts, a lottery scheme that produced winning tickets, and stuffing money into suitcases and flying it abroad to jurisdictions where financial institutions ask fewer questions about cash. Other methods include the use of currency exchanges and underground banking schemes.

The analysis also shows that money was often laundered with the use of shell companies and nominee directors, where the true owner or owners were hidden.

The illicit money was generated from an array of offences and alleged offences: stock fraud, bank and company embezzlement, phishing email fraud and drug trafficking. In another case, millions were raised in an alleged cryptocurrency fraud.

The proven and alleged illicit activities generated as much as $1.7 billion, a huge sum that points to the amount of domestic and global money available to be laundered.

Postmedia tracked nearly $100 million that was plowed into real estate.

“It is pervasive,” says Denis Meunier, a former deputy director of Canada’s financial intelligence gathering agency, in response to Postmedia’s compilation and analysis of the 12 cases.

“It doesn’t matter whether it is drugs, or whether it is fraud or pump-and-dump schemes; as long as it’s dirty, the source is illegal, people will want to hide it,” said Meunier, also a former director general responsible for criminal investigations at the Canada Revenue Agency.

Added Meunier: “Real estate is being used, has been used and will continue to be used.”

Buying real estate

While most of the money invested in real estate was sunk into Metro Vancouver properties, the analysis shows money also ended up in other places, including Whistler and Kelowna.

The analysis also underscores the global nature of illicit activities and laundering operations.

The cases involved more than 20 countries and territories: the U.S., Canada, Australia, Pakistan, India, Japan, New Zealand, Taiwan, Mexico, China, Hong Kong, the Bahamas, Singapore, Bahrain, Panama, Belize, the United Kingdom, Mauritius, Malta, the United Arab Emirates, Switzerland and Germany.

Major banks are almost always the conduit to move money, through legally established accounts and often in the names of companies also legally established. In the 12 cases, money moved through more than 30 banks, including all the major banks in Canada: CIBC, Royal Bank, Bank of Montreal, Toronto Dominion and Bank of Nova Scotia.

The money also moved through other major banks: HSBC, the Bank of China, the Industrial and Commercial Bank of China, Credit Suisse, Credit Lyonnais, Citibank, Wells Fargo, DBS Bank, Barclays Bank, and Deutsche Postbank.

In the global trafficking scheme that Burden was involved in, huge amounts of cash were laundered both inside and outside of Canada.

French-American Claude Duboc led the global cartel, which shipped the hash from Pakistan to Canada, and also to the U.S. and Australia.

Duboc had couriers move cash from Canada to banks in Europe and Singapore, where fewer questions were asked about the origin of the currency. The cash was stuffed into suitcases for flights out of Vancouver or Montreal. One courier moved $80 million out of Canada using this method on 39 separate trips.

Duboc also used a money trader in Hong Kong to launder money into banks in Bahrain.

Some of the money Duboc moved globally was sent back to B.C. to help fund further operations — $5 million from a bogus company in Bahrain called Arab Lumber Products to Burden’s business, Coastal Forest Products, to outfit ships and barges to transport drugs.

The money was sent to a Richmond branch of CIBC.

Money from Duboc’s profits was also used to purchase drug stash houses on Vancouver Island and the Sunshine Coast.

The profit from Burden’s share of the hashish, also cash, was placed in banks in amounts that would not trigger suspicion. Cash was also cleaned using a lottery ticket scheme that guaranteed payouts.

Russ Lefler, a now-retired RCMP officer who headed the Burden money-laundering investigation back in the ’90s, said he remembers when he mapped the various cash bank deposits, it showed a criss-crossing pattern along Kingsway as multiple transactions took place. It’s a classic money-laundering scheme called smurfing.

At the end, “they come out with a bank draft,” said Lefler.

A problem with the lottery scheme was for the gangsters to find enough different people to cash in the winning tickets, said Lefler. When police raided Burden’s house — purchased by his lawyer though a shell company set up in the Bahamas called Taipei Trading Corp. — they found stacks of winning tickets, worth about $500,000.

“They get it down to an art, to dilute the money, so you don’t get the big picture. It’s designed to confuse investigators,” said Lefler.

Burden, who has since died, was handed a five-year sentence in 1997. The properties used to launder money were forfeited. Duboc is serving a life sentence in the U.S. and also forfeited his wealth.

Using the banks

Even today, cash is placed in banks by those accused of money laundering.

In another case examined by Postmedia, the B.C. Civil Forfeiture Office is suing to seize a Burnaby home owned by Matthew Thomas Borden and wife Chia Yin (Vicky) Wang, alleging drug trafficking money was laundered through the property, which B.C. property records value at $677,000. 

Borden and his stepfather, John Michael Canning, were arrested on Aug. 29, 2019, for alleged drug trafficking, according to a police affidavit filed in B.C. Supreme Court in support of the civil forfeiture suit. Neither Borden nor Canning has been charged and the police investigation is continuing, according to the affidavit from the B.C. Combined Forces Special Enforcement Unit.

During police raids of the Burnaby home, Canning’s home in Surrey and several vehicles, more than $30,000 in cash was seized, along with a money-counting machine, scales, nearly two kilograms of cocaine, almost three-quarters of a kilogram of heroin and 260 grams of marijuana.

The police investigation alleged Borden was observed depositing two large cash deposits at a Scotiabank branch in Burnaby, both in August of this year. One was a three-quarter-inch-thick sheaf of cash (the top note was a $50 bill) and the other was a half-inch-thick stack with a $5 bill on top, according to court filings.

In the second deposit, police allege in the affidavit that Borden was overheard saying to the teller to deposit $6,500 into a bank account. That is less than the $10,000 amount that triggers an automatic large transaction report to Canada’s financial intelligence-gathering agency, the Financial Transactions & Reports Analysis Centre or Fintrac.

But a Fintrac disclosure report filed in B.C. Supreme Court in support of the civil forfeiture suit alleges the Toronto Dominion bank already had concerns about the activity in Borden’s accounts in 2016 and 2017. The bank filed a suspicious transaction report to Fintrac flagging potential money-laundering activity. The report alleged that $110,000 was deposited during a six-month period, some of which came from cash deposited at bank branches in Saskatchewan and Newfoundland as well as email transfers ranging from $175 to $3,000. “The origin of the cash, connection to the third parties and final distribution of the funds are unknown,” said the report to Fintrac.

The Vancouver model

If laundering cash has always been a problem for criminal organizations, as police investigators have observed, it’s why the so-called Vancouver model was so ingenious. It was the name given by an Australian academic to the scheme allegedly run by the underground Richmond bank, Silver International.

Under the scheme, drug-trafficking money — and proceeds from other crimes such as illegal gambling and extortion — was lent to high-roller gamblers from China to be used in Metro Vancouver casinos, according to B.C. court documents. The money provided was largely in bundles of $20 bills wrapped in rubber bands, a key marker of money collected in the illicit drug trade.

In exchange for the cash, the high rollers would wire money into foreign bank accounts, for example in China, to cover the debt. The drug-trafficking money, now in electronic form, could then be moved as profit back to those involved in drug trafficking and money laundering to finance their operations, or to buy assets such as houses, allegedly laundering the drug-trafficking proceeds.

Postmedia tracked more than $47 million in Lower Mainland properties linked to the underground bank scheme and related police probes into allegations of drug trafficking, illegal gambling and money laundering.

Peter German, a former RCMP deputy commissioner and a lawyer with a doctorate in law, said once the cash is in the financial system, depending on the complexity of the scheme and the amount of money involved, it can “whiz” around the world.

“If you are talking about real estate, in most cases you are talking about money that is already in the system. People aren’t walking into lawyers’ offices or realtors with tons of cash,” said German, who is the lead author of two B.C. government — commissioned reports on money laundering.

Cashless money-laundering

There are criminal schemes where it is not necessary to place cash in the financial system because the money is already in electronic or digital form.

Of the cases that Postmedia analyzed, this is true of the bank and China state-owned company embezzlement, stock fraud, alleged cryptocurrency fraud and email phishing fraud.

It removes a step from the classic money-laundering process. No placement of cash into the system is needed, just layering and integration.

One of the cases examined by Postmedia was a massive embezzlement at the Bank of China between 1992 and 2001. A trio of senior executives — Xu Chaofan, Xu Guojun and Yu Zhen Dong — stole $670 million at the branch of the Bank of China in Kaiping in Guangdong province where they worked. Chaofan and Guojun and their spouses were convicted by a federal jury in Las Vegas in 2008 of racketeering, money laundering, international transportation of stolen property, as well as passport and visa fraud. All four have since been deported to China.

While the fraud itself was not simple — requiring the perpetrators to mobilize staff to create a new and separate set of books before a major bank audit — moving the hundreds of millions was in some ways a straightforward matter of transferring the money from bank account to bank account.

The trio of bank executives used their positions to cover up false loans and illegal transfers, according to the U.S. court proceedings.

The money moved into Bank of China accounts of Chinese shell companies, including Kaiping Polyester Factory and Zhong Hui Filament Co., under the guise of the purchase of equipment or supplies. From there, the money was funnelled to bank accounts of shell companies in Hong Kong controlled by the trio of executives, including Everjoint Ltd. and Everjoint Properties Ltd. The money was then moved from Everjoint to bank accounts in Hong Kong in the names of the executives, their spouses and relatives, including through a Hong Kong account at Credit Lyonnais. Getting the money to Hong Kong was important because it has fewer constraints on transferring money out of country than China.

From Hong Kong, at least $8.5 million was transferred into accounts at the Royal Bank, HSBC and CIBC in B.C., according to a successful claim to recover money filed in B.C. Supreme Court by the Bank of China.

Some of the money was used to buy three Richmond houses: two on Udy Road and one on Mang Road. The houses were purchased in the early 2000s in the names of the Bank of China executives’ spouses, B.C. court and property records show. One house still remains in the name of one of the spouses, B.C. property records show.

Pump-and-dump

In another case examined by Postmedia, there was also no need to place actual cash in the financial system because the more than $300 million in illicit proceeds from a stock fraud were also already in electronic funds.

There was no cash — no $20 bills — involved.

U.S. court proceedings — including a civil suit brought by the U.S. Securities and Exchange Commission and a criminal case led by the U.S. Attorney’s office — showed that mastermind Gregg Mulholland had dozens of shell companies created in the U.S. and Canada to move millions of dollars from pump-and-dump schemes. In a pump-and-dump scheme, the stock fraudsters falsely promote a penny-stock and then sell off their chunk of the shares when the price rises. The stock then often plummets, leaving other shareholders with a loss. A Calgary businessman helped set up more than a dozen of the shell companies in Canada, according to B.C. court records.

Mulholland used two of the shell companies — Vision Crest Consulting Group Ltd. and 2943 High Point Drive Whistler Holdings Ltd., neither of which showed him as the true owner — to purchase a $4.85-million West Vancouver house in 2014 and a $2.5-million parcel of land in Whistler in 2013, according to the U.S. Securities and Exchange suit filed in B.C. Supreme Court to recover money.

Both properties had been paid for in full with no mortgages.

To purchase the houses, $5 million was wired from the U.S. to a Vancouver law firm, and another $2.94 million was wired to a CIBC account in the name of Vision Crest, according to the B.C. court proceedings.

In 2016, Mulholland pleaded guilty in a criminal action brought by the U.S. Attorney’s Office in the Eastern District of New York and agreed to forfeit his illicit gains, including the two B.C. properties.

In 2017, he was sentenced to 12 years in a U.S. jail.

In another case examined by Postmedia, money was moved from Canada to Hong Kong and back.

In 2017, fraudsters used an email phishing scheme to trick Grant McEwan University into sending $11.88 million in builder contract payments to a bank account in Montreal in the name of a company called Mono Shoes, whose sole director was Jehad Al Batniji. From there, some of the money was transferred to a bank account in Hong Kong in the name of company Kinglong Commerce Development Ltd., according to B.C. court documents.

In a separate transaction, a B.C. property developer, Hoi Fu Enterprises, arranged to borrow $1 million from a Chinese company, Yangjiang City Jixie Zhulu Engineering Ltd. to help with the $30 million purchase of land in Richmond.

Because it was difficult to get the $1 million out of China, the engineering firm used an underground banking channel to do so, shows information filed by Hoi Fui in its defence of a B.C. Supreme Court claim by Grant McEwan University to recover money. 

Under that scheme, the engineering firm deposited about $1 million in Chinese currency in China to the accounts of two men. In return, the two men made arrangement to have $1 million sent from Hong Kong to the property developer in Richmond, to accounts at CIBC and Toronto Dominion. It turned out the $1 million from Hong Kong was sent from the account in the name of Kinglong Commerce Development, according to the B.C. court proceedings.

The Richmond property developer, Hoi Fu, said it had no knowledge that the Hong Kong money was obtained from Grant McEwan University. The parties reached at an out-of-court settlement.

In another B.C. Civil Forfeiture Office case examined by Postmedia, a portion of $30 million raised in an alleged cryptocurrency fraud was allegedly laundered in real estate in Vancouver and Toronto.

Money in the form of bitcoin was converted to U.S. dollars through an American crypto-asset trading company, Cumberland DW LLC, according to an RCMP affidavit filed in B.C. Supreme Court in support of the civil forfeiture suit.

The U.S. currency was then transferred to owners of the Vancouver-based cryptocurrency company and used to buy a $4.1 million Coal Harbour condo and a $3.74 million condo in Toronto, according to the police affidavit.

The owners, including Kevin Patrick Hobbs, deny any wrongdoing and say they run a legitimate business.

A growing problem

Louise Shelley, a professor at George Mason University and the lead at the university’s Terrorism, Transnational Crime and Corruption Center, has a sobering conclusion.

The use of real estate to launder money is a growing problem, she says.

Criminals have ever-larger amounts of money to be disposed of — and skyrocketing prices of real estate in a growing number of places in the world, including in Vancouver and Toronto — makes it a “really choice” way to store and grow their illicit money, said Shelley.

Of the illicit money flowing into real estate, she says: “Nobody seems to have cared … It was good for business.”

© 2019 Postmedia Network Inc.

Vancouver announces boost for supply of affordable rental homes

Thursday, November 28th, 2019

Rental only zones and up to 6-storeys in residential areas

Steve Randall
REP

Several policy changes proposed by Vancouver City Council could deliver thousands of new rental homes over the coming years.

The council approved recommendations this week that will enable faster development of rental units and in more areas of the city.

Councillors backed measures including include rental-only zoning, allowing up to six storeys in commercial zones, a new family-friendly housing pilot program for four to six storey buildings close to schools, parks and shops.

“Vancouver residents told us loud and clear to take action on the housing crisis so that’s exactly what we’ve done,” said Mayor Kennedy Stewart. “Together, these policies could help build upwards of 8,000 new rental homes over the next seven years, including nearly 5,000 homes geared to middle-income households, helping more of our friends and neighbours stay in Vancouver.”

Plans to increase affordability include incentives to provide more rental housing for households that earn less than $80,000 per year, by continuing to process and evaluate applications under the Moderate Income Rental Housing Pilot Program.

Environmental impact The Climate change emergency will be at the heart of all policies, by promoting wood-frame construction, lower embodied emissions, and meeting green buildings standards to reduce energy needs for the building through its lifetime.

The rental only zones will be close to local amenities to ensure walkable communities.

“All parts of the City organization play a role in addressing the housing crisis in our community,” said City Manager, Sadhu Johnston. “Council’s support for this package of initiatives to increase rental production and support energy upgrades on existing buildings with a focus on keeping tenants in their homes, demonstrates our collective commitment to tackle this challenge head-on.”

Copyright © 2019 Key Media Pty Ltd

Agencies want to improve home financing for First Nations

Thursday, November 28th, 2019

CMHC and LAB changing policy for First Nations

Steve Randall
REP

First Nation families are expected to benefit from two policy changes announced by CMHC and the Lands Advisory Board (LAB) this week.

The enhancements are aimed at making it easier to access home financing for First Nation or Indigenous Settled land.

They include CMHC mortgage loan insurance for home financing secured through the LAB-led A to A leasing, and the agency will also establish lower down payment requirements for insured home financing on-reserve.

“The Lands Advisory Board supports initiatives of CMHC which will make it easier for First Nation governments to support their members in improving housing on reserve lands,” said Robert Louie, Chairman of the Lands Advisory Board. “A to A leasing is an innovation first developed in my community, Westbank First Nation, and it is good to see that CMHC recognizes the potential benefit of this option for other First Nations and is now able to provide mortgage loan insurance for A to A leasing.”

CMHC says that together, these adjustments will mean easier access to homeownership without the traditional requirement of a Ministerial Loan Guarantee and provide greater access to the First-Time Homebuyer Incentive.

“These policy enhancements will provide First Nations borrowers more access to insured financing for homeownership, including through the new First Time Home Buyer Incentive,” said Romy Bowers, CMHC’s Senior Vice-President of Client Solutions. “We commend the Lands Advisory Board for championing innovative housing solutions for First Nations, such as the A to A leasing concept.”

Copyright © 2019 Key Media Pty Ltd

Prudent to do homework before contracting out work

Thursday, November 28th, 2019

Get quotes and qualifications for major repairs

Tony Gioventu
The Province

Dear Tony:

Is there anything in the Strata Act or legislation that requires a strata council to get three bids for projects of a certain value?

Our strata council is negotiating with a contractor to replace our siding and our decks and several owners are raising concerns about the price and the reputation of the contractor. From what we can see, it looks like basically a blank cheque with no real understanding of what is going to be done.   

It’s one thing to call in a contractor to replace a broken window or a hot water tank or a broken entry door, but removing our siding and replacing decks that are over other living spaces may have grave consequences if there is a problem. 

Asiz M., North Vancouver

Dear Asiz:

One of the benefits of living in a strata corporation is the collective power of purchasing and negotiations. If the purchasing process is administered well, the community can look forward to secure pricing, confidence in the construction and contingencies that address potential risks and problems before they occur. 

Strata councils are volunteers and are generally held to that standard of a comparable volunteer under the same circumstances in the legislation.

This does not excuse the responsibility of a volunteer to ensure they have sought advice and counselling on their actions and decisions. The B.C. lottery slogan — “Know your limit, play within it” — applies to many facets of life. Purchasing and negotiating contracts and services is a perfect example.

There are few strata council members who have sufficient knowledge and experience relating to procurements and negotiations of major construction. While there is nothing within legislation that requires multiple bids on projects within strata corporations, a prudent council member will acknowledge they have an obligation to obtain the optimum pricing for the best services with the all of the terms and conditions of the contractor and services clearly defined.

It is a small investment to retain a consultant to set the specifications identifying the scope of work, and consult a lawyer before you issue the project for bids.  

If your community is considering construction, the value may be the only factor that determines the scope of services you require. Seeking multiple bids on a project is only reliable if there are published specifications of the scope of work and terms and conditions of the contract. At least all contractors are bidding on the same project.

For major construction such as decks, siding, balconies, windows and roofing, a consultant is always recommended to ensure the project is detailed, construction is inspected and the strata corporation is not left with a construction disaster, endless expenses or a contractor who leaves a site before the project is complete.

The moment a contractor informs you they are not interested in the work if they have to compete with other contractors and bid on a scope of work, it is apparent their intentions are not credible.

Strata councils routinely comment they had not budgeted funds for a consultant or legal services, yet we often don’t know the cost of construction until we have completed the bidding process, so how did they reach a budget amount in the first place?

Before your strata council starts a major project, determine the cost of a consultant to set up your specifications. This will help you budget for professional services in the coming year. The cost varies depending on the scope of work, condition of buildings, and the amount of supervision that may be required as the project proceeds.

Next, consult your lawyer on the bidding process. Are the bidding documents sufficient? Is bonding insurance required for the scope of the project? Are the terms and conditions sufficient? How is the value determined? Are there cost allocations for unknown conditions, such as rotting wood? Are there specific site conditions that require details?

If you don’t secure terms and conditions in the bidding process, it becomes difficult to negotiate in a contract and impossible and costly to correct after a contract is signed. 

© 2019 Postmedia Network Inc.

BC housing market recovering faster than expected says Central 1 Credit Union

Tuesday, November 26th, 2019

Lower mortgage rates, the first-time homebuyer incentive, and international immigration give the market a helping hand

Steve Randall
The Vancouver Sun

The housing market in British Columbia is benefitting from a cocktail of positive influences which are aiding its recovery.

The deputy chief economist of Central 1 Credit Union says that the rebound is happening faster than expected as lower mortgage rates, the first-time homebuyer incentive, and international immigration give the market a helping hand.

In his latest outlook, Bryan Yu says that these factors are driving buyer demand and affordability for the province’s housing market, with sales higher than last year in 7 of the 8 months since February.

Lower prices in urban centres, coupled with more favourable mortgage rates have been supported by the strong labour market.

However, despite improvement, homes are still out of reach for many would-be homebuyers, due to government policy that constrains supply says Yu.

This may be temporary, but for now he sees increased rental demand, with low vacancy rates boosting rental rates.

And the lower buyer demand seen in the past two years is likely to lead to constraint of affordable homes as Central 1 anticipates and undersupply of construction in response to the previous weakness.

Copyright © 2019 Key Media Pty Ltd

Vancouver condos continue to impel demand, despite muted annual growth

Tuesday, November 26th, 2019

The year-over-year price trend is declining, demand for Vancouver?s condos is still driving growth

Ephraim Vecina
Mortgage Broker News

While the year-over-year price trend is declining, demand for Vancouver’s condos is still driving growth.

Fresh Statistics Canada data covering the third quarter showed that the market’s average condo prices are down by 3.49% annually, but up by 17.9% from Q1 2017. New build condos were up 1.05% year-over-year and up 15.63% from Q1 2017.

A major driver of the phenomenon is the particularly volatile resale apartment segment, Better Dwelling explained in its analysis of the StatsCan figures.

Resale condo prices fell 5.87% annually, but still 18.87% higher than the levels seen in Q1 2017.

For perspective, single-family home price growth has been considerably muted. During Q3 2019, the average price of this housing type fell by 5.95% from a year before.

Compared to Q1 2017, single-detached prices are 5.74% higher, roughly just one-third of the growth exhibited by the condo market during the same time frame.

Earlier this year, a RE/MAX survey conducted by Leger pointed to the fact that Vancouver, along with Toronto and Calgary, boasts of multiple positive attributes that consistently draw in housing demand.

RE/MAX cited particularly strong public transit options, including the Skytrain and bus system, as factors that make Vancouver among the most liveable in the world. The city also ranked high in RE/MAX measures of walkability, especially in Yaletown.

Copyright © 2019 Key Media

Christies International chief expects global downturn in 2021

Monday, November 25th, 2019

Once the next US president is sworn in, things are likely to take a turn

Steve Randall
Mortgage Broker News

A global recession would bring challenges for the global real estate market but it is unlikely next year according to one major firm’s leader.

Dann Conn is chief executive officer of Christies International Real Estate and he is not expecting a recession in 2020; but once the next US president is sworn in, things are likely to take a turn.

“If you looked at it in the ordinary course, my guess would be 2021 at the earliest, but probably not much later either,” he told Bloomberg.

Conn believes that lower interest rates would be a good thing to protect real estate from current challenges including the US-China trade dispute, Brexit, and tax factors that are impacting real estate investors.

On geopolitics, he says two of the biggest world real estate markets are seeing different outcomes.

For London, UK, where Brexit uncertainty has been a factor for three and a half years, Conn says that the battering that home prices have taken in recent years could result in a strong rebound for investors.

“If you’re a buyer now, you can take advantage of the last four or five years that have been not so great,” he said.

But there was a note of caution with current prime minister Boris Johnson considering a Canada-style tax on foreign investors to cool the market which is overinflated even after the recent declines. The tax is expected to be 3% on top of the usual land tax known as stamp duty.

“Evidence shows that by adding significant amounts of demand to limited housing supply, purchases by non-residents inflate house prices,” Chief Secretary to the UK Treasury Rishi Sunak said in the statement. “That is why we are introducing a higher rate of stamp duty for non-UK residents that will help to address this issue.”

Buying in Asia
Meanwhile, in Hong Kong, the civil unrest means that the economy – and home prices – are weak. Conn suggests those investors looking at real estate in Asia should consider Taiwan as “a perceived relatively safe place to deploy capital because it has great infrastructure, and there’s a good concentration of wealth.”

Copyright © 2019 Key Media

Residential site in Vancouver’s Shaughnessy sold for $12.7M

Wednesday, November 20th, 2019

Land parcel totalling nearly an acre, in Vancouver’s most exclusive neighbourhood, has potential for 85 rental units

Mark Goodman
Western Investor

Breakdown:

Property type: Residential development site

Location: 1464 West 32nd Street and 4750 Granville Street, Vancouver

Property size: 37,938 square feet

Zoning: RS-5 (low-rise residential)

Potential: 85 rental suites

Price: $12.7 million

Date of sale: October 25, 2019

Brokerage: Goodman Commercial Inc.

Broker: Mark Goodman    `

Copyright © Western Investor

Ontario tribunal hands down ruling in appeal of Toronto Airbnb regulations

Tuesday, November 19th, 2019

The city’s rules regulating short-term rentals will remain in place

Clayton Jarvis
Canadian Real Estate Wealth

On October 15, Ontario’s Local Planning Appeal Tribunal (LPAT) concluded an appeal of Toronto’s short-term rental rules brought forth by landlords who charged that the almost two-year-old guidelines restrict their rights as property owners.

On Monday, LPAT delivered its decision. The city’s rules regulating short-term rentals will remain in place.

LPAT found that Toronto’s regulations provide a reasonable balance between the needs of the city’s tourist population and its cohort of renters. During the appeal, arguments against the regulations were made on the grounds that short-term rentals help fill an important gap where Toronto hotels, no longer able to handle the surging number of guests visiting the city, fall short.

The ruling comes as a blow to Toronto-area Airbnb entrepreneurs, who have been using short-term rentals as a way to greatly increase cash flow. Landlords renting out their entire properties on a nightly or weekly basis will now have to limit their short-term stays to no more than 180 days per year. Individual rooms in a landlord’s residence can be rented out with no limit.

Advocates for more stringent regulation of Airbnb have to be pleased. The ruling comes down definitively on the side of city’s residents, who have, by some estimates, 10,000 fewer properties to choose from because their status as entire-property Airbnb listings has removed them from the market. But it’s unclear just how closely the rules, first approved by Toronto city council in December 2017, will be enforced.

“Is there going to be a new department that’s going out there to make checks? Are they relying solely on complaints? Are they making the fines really high for people if the complaints do come in?” asks Sahil Jaggi, a Toronto investor and Mink Realty agent.

“There should be proper rules in place so we’re not paying more tax payer money to create a new board,” Jaggi says. “At the same time, I think there’s should be heavy fines if people aren’t following the regulations.”

Jaggi is surely not alone in that sentiment. Just how seriously Toronto’s growing number of Airbnb barons take the regulations remains to be seen.

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