If you haven’t bought a condominium before, or any property for that matter, you’ve probably never seen a purchase contract.  It’s a pretty important piece of the puzzle when you’re looking to buy a property so let’s not wait until you’re ready to write an offer to start getting familiar with it.  Here is a brief overview of the general terms and conditions: 

The first bit of information we will need to include is the legal names of anyone going on the offer, who will also be on title assuming you go firm on the purchase.  This means what it says on your ID has to match - spelling and all - not an alias or preferred name, including your parents or anyone else who needs to be on it need to be on it for financing purposes, or if you are buying it under your business/corporation name/number (which will require proof of signing authority so we know that you have the right to act on behalf of the company).

1. THE PROPERTY

• 1.1(a): Describes the specific details of the condo unit, including address, project name, and legal information.  I '(or your Realtor) will fill this out, referencing the Title, ensuring accuracy.

• 1.1(b): Outlines parking and storage details - might be titled or assigned, your Realtor will fill this out

• 1.1(c): Mentions any unattached goods - this includes any appliances, window coverings, keys, furniture, electronics, anything you expect to stay with the property on moving day and is negotiable (meaning the seller could strike or add certain items they intend on keeping or leaving).  If there is any gray area with attached vs. unattached goods (common ones are TV & wall mount, garage shelving, etc.), it’s better to itemize it out if you have strong feelings one way or the other to make sure there is no confusion or disappointment on moving day

• 1.1(d): Specifies excluded attached goods - this is often left blank, it could include something like a light fixture (ie. chandelier) that is a family heir loom and the seller plans on taking & may offer to replace with something else that matches the rest of the decor. If there is something intended to be excluded that is typically left behind on move out, the seller usually discloses that at the showing stage so we can prepare the offer properly, or if there is something you very specifically want removed, we will include it here and follow up with verbal communication to the Seller’s Agent to make sure they don’t miss it since it’s commonly left empty.

2. PURCHASE PRICE AND COMPLETION DAY

• 2.1: States the purchase price - this is ‘the number’ that matters the most, it’s what you’re offering and the seller may counter before hopefully coming to an agreement and moving forward to an accepted offer.

• 2.2: Confirms if the price includes taxes - most residential re-sale does not need to acknowledge GST in the price.  Only new construction, a ‘flipped’ property that has been extensively renovated to sell, short term rentals (looked at as commercial properties by CRA) and commercial property does assess GST in the sale.  Only condominiumized short term rental properties (Airbnb/VRBO style rentals) use the contract we are currently breaking down, the others will be on a different contract which we are not looking at right now.  Feel free to reach out if you wanted to talk more about GST and when it does and doesn’t apply, the above is an overly simplified ‘list’. 

• 2.3: Specifies the completion day - aka moving day.  Your Lawyer will need to have all your down payment funds + lender instructions by today at the latest and you will get keys and can start moving in that afternoon… assuming all goes to plan.  The Seller could counter this if they have a specific date in mind.  It has to be a business day where the banks & lawyers are working.

• 2.4: Ensures the property's condition remains the same on completion day and all goods (attached or unattached) must be in good working order - this term is my favorite term to point out.  It is what protects Buyers but also sets expectations. The property DOES NOT have to be in BETTER condition than when you achieve an accepted offer.  It is not a new build (or it wouldn’t be on this contract) so it will have a little wear and tear; it can’t be in worse condition but it doesn’t have to be in better condition either.  If you are concerned about the cleanliness or negotiate that the seller will replace something like the carpet or re-paint a damaged wall, these things need to be included under 9.3) Other Terms or there is little recourse on the completion day if the property is, for better or worse, in substantially the same condition as it was on acceptance.  That being said, the appliances, as the included unattached goods, need to be in good working order so if we show up on the completion day and the fridge is not working, we can expect a remedy to that because of this term. 

3. GENERAL TERMS

• 3.1: Lists general agreements, including the use of agents, applicable laws, time sensitivity, and mutual responsibilities.

• 3.1(f): Requires the seller to disclose significant known defects (the word ‘known’ is key, if a seller isn’t aware of an issue, they can’t disclose it.  This is a big reason a home inspection is a good idea, you might find something the seller had no clue about before you brought it to their attention.  Once they know about it, there are requirements for remedy or we negotiate a term to ensure the seller addresses the issue prior to closing or a price reduction but all these things require it being or becoming a known/disclosed issue).

• 3.1(h) and 3.1(i): Outlines due diligence responsibilities for both parties.

• 3.1(l): Emphasizes the importance of reading and seeking advice before signing.

• 3.1(m): Allows brokerages and listing services to use transaction information.

• 3.1(n): Establishes who will provide contract and related documents/information to the Lawyers.  This is typically the Seller’s brokerage unless they are unfit to do so or there is some other reason to assign it to the Buyer or a Law Firm.

4. DEPOSITS

• 4.1: Establishes terms for deposit trust.

• 4.2 to 4.8: Details deposit-related procedures, responsibilities, and disbursements. 

  • The Seller’s Brokerage typically holds the deposit funds unless they are unfit to do so (like in a For Sale by Owner deal) and we assign it to the Buyer’s Brokerage or a Law Firm.

  • The Deposit is held in trust and is typically around 5% of the purchase price to show capacity - over simplifying here, but if you can’t come up with 5% you can’t get a mortgage so showing the Seller you have that ready to go is a show of confidence.  

  • The Deposit typically needs to be guaranteed funds (bank draft or wire transfer), personal cheques, e-transfers and global money transfers are not guaranteed so most brokerage policies won’t accept those forms of payment.

  • The Deposit is returned to the Buyer if they are unable to waive conditions by the specified date.  If you are successful at waiving conditions and proceed with the purchase (go firm), the funds are forwarded from the holding brokerage to the Lawyers to make up part of the purchase funds on the completion day.

5. LAND TITLE

• 5.1: Ensures the property title is free of certain encumbrances.

6. REPRESENTATIONS AND WARRANTIES

• 6.1: Seller assures legal right to sell, non-resident status, and truth of representations.

• 6.2: Specifies the timeline and enforceability of representations.

7. DOWER

• 7.1: Addresses potential dower rights and the need for specific documentation.  Dower Rights are only applicable if there is only 1 seller on title and that person is legally married and their spouse has spent the night in the property at some point throughout their marriage.  The Seller will determine if Dower Rights apply and if they do, the non-titled spouse will be included in the sale.

8. CONDITIONS

• 8.1: Requires reasonable efforts to fulfill conditions.

• 8.2 to 8.4: Outlines buyer's and seller's conditions and the process for satisfaction or waiver.  Condo doc review, home inspection and financing are typical but additional conditions could be relevant depending on your situation.  If you have a financing condition the ‘typical’ condition period is 2 full weeks, if you don’t need financing, you can generally shorten that as home inspectors and condo doc review specialists generally have availability within a few days of reaching out to them.  A shorter condition period is more attractive to Sellers and a way to ‘strengthen’ your offer in a competitive marketplace but you need to make sure you have enough time to do your due diligence and feel comfortable moving forward or not.

9. ATTACHMENTS AND ADDITIONAL TERMS

• 9.1: Lists attached documents forming part of the contract - This is often not needed, it would be typical if you are assuming tenancy or have a Sale of Buyer’s Home Condition and need to include a property schedule.

• 9.2: This is the amount for the condo fee & any additional known fees.  Your Realtor will fill it out and is generally disclosed in the listing.

• 9.3:  Other Terms - we can include any extras that aren’t already covered with the general terms and conditions.  One standard one is a include a walkthrough term on the morning of the completion day to confirm the property is in at least the same condition as when the offer was accepted and all the included goods are in good working order.  If we need a professional cleaning term or anything else, we will add it as appropriate.

10. CLOSING PROCESS

• 10.1 to 10.12: Details the closing process, including document delivery, payments, costs, and potential delays.

11. INSURANCE

• 11.1: Addresses the party responsible for property insurance until the purchase price is paid.

12. REMEDIES

• 12.1 to 12.3: Describes potential remedies in case of contract default.

13. NOTICE AND DOCUMENTS

• 13.1 to 13.4: Clarifies notice procedures and the use of electronic signatures.

14. AUTHORIZATION

• 14.1 to 14.3: Authorizes representatives for notice purposes.

15. CONFIRMATION OF CONTRACT TERMS

• 15.1: Confirms the completeness and exclusivity of the contract.

16. LEGAL OBLIGATIONS BEGIN

• 16.1: Specifies when legal obligations begin and their binding nature.

17. OFFER

• 17.1: Formalizes the buyer's offer and its acceptance timeline.  The offer has to have a timeline for response so we will give the seller usually around 24 hours to respond and if they don’t reply in that timeframe, the offer automatically becomes null and void.  If they counter, they will generally extend the time so you have time to reply back after receiving the new contract terms back.

18. ACCEPTANCE

• 18.1: Confirms the seller's agreement to the terms.  If the Seller counters (changes) anything, the Buyer will have to initial off on those changes to confirm acceptance.  The offer is not accepted until all parties agree to all terms by way of written (initialed) acknowledgement. 

This breakdown should help the buyer, with the guidance of their Realtor, understand the key aspects of the condominium purchase contract before signing. It's important to seek legal advice and clarification on any terms that may be unclear.  As always, I am happy to dive deeper into any of the topics brought up in this blog post or anything else you have questions about in regards to the Buying and Selling process in Alberta.

British Columbia (really most of Canada) is grappling with a severe housing crisis, marked by a shortage of affordable long-term rentals and attainable housing options. This crisis is significantly exacerbated by the rise of short-term rentals, where over 16,000 entire homes are being used for this purpose, making it increasingly challenging for residents to secure affordable housing. In response, the BC government has introduced the Short-Term Rental Accommodations Act to alleviate the housing crisis by returning valuable housing inventory to the long-term rental market. These new regulations have the potential to ripple into Alberta, as investors may seek opportunities beyond BC's borders and international visitors may look for more stable and affordable rental opportunities when planning a trip to Canada.

BC's Housing Crisis

The scarcity of affordable housing, including long-term rentals, has become a pressing issue in British Columbia. Short-term rentals, particularly entire homes, are viewed as a major contributor to the problem, occupying housing units that could otherwise serve residents seeking stable accommodations. Local governments have taken steps to regulate short-term rentals, but enforcement of these bylaws remains a challenge, prompting a call for additional resources and tools.

Primary Goals of the Legislation

The newly introduced regulatory measures have three key objectives:

1. Returning Units to the Long-Term Rental Market: The most critical goal is to return short-term rental units to the long-term rental market. By achieving this, British Columbia hopes to mitigate the housing shortage, ensuring that more affordable housing options become available to residents through existing dwellings with new construction and development opportunities not keeping up with current demand.

2. Empowering Local Governments: These regulations aim to provide local governments with the tools needed to enforce short-term rental bylaws effectively. This empowerment allows local authorities to address the housing crisis at the community level.

3. Provincial Oversight: These regulations establish a provincial role in the oversight of short-term rentals, ensuring that standards and compliance are consistent across the province.

Scope of the Regulations

The new rules encompass all short-term rentals offered to the public, including various platforms like Airbnb, VRBO, Expedia, and other web listings such as Facebook Marketplace, Kijiji, and Craigslist.  However, specific exemptions include reserve lands, Nisga’a Lands, Treaty Lands of a Treaty First Nation (unless a coordination agreement is established with the Province), hotels, and motels.  The new legislation doesn’t apply to any municipalities with a population of less than 10,000 that aren’t immediately adjacent to larger municipalities (ie. greater Vancouver area), any of the 14 designated resort communities (Fernie, Golden, Harrison Hot Springs, Invermere, Kimberley, Osoyoos, Radium, Revelstoke, Rossland, Sun Peaks, Tofino, Ucluelet, Valemount, and Whistler) or are an Agri-tourism business. 

Key Changes and Implications

The new regulations introduce several significant changes, including:

1. Strengthened Enforcement Tools: Regional districts will witness a substantial increase in the maximum fines for bylaw violations, rising from $2,000 to up to $50,000. This aligns with municipalities under the Community Charter, equipping local governments with more robust enforcement capabilities.

2. Business Licensing Authority: Regional districts will gain the authority to regulate and license short-term rentals, similar to municipalities, under amendments to the Local Government Act. This ensures a uniform approach to regulation.

3. Display of Business License: In areas where a business license is required, short-term rental hosts must display a valid business license number on their listings, enhancing transparency.

4. Platform Accountability: Listings without a valid business license, where required, must be removed by the short-term rental platform at the request of the local government.

5. Data Sharing: Short-term rental platforms are obligated to share listing information with the Province, which is then shared with local governments to facilitate effective bylaw enforcement.

Returning Units to Long-Term Rental Market

To fulfill the goal of returning units to the long-term rental market, the regulations implement a provincial principal residence requirement. This requirement limits short-term rentals to the host's primary residence, along with one secondary suite or accessory dwelling unit. The principal residence requirement applies province-wide in municipalities with a population of 10,000 and over, and adjacent communities.

Exemptions for specific areas or accommodation types may be defined in future regulations. Local governments can also request to "opt in" to or "opt out" of the principal residence requirement, depending on local vacancy rates.

Provincial Oversight

To ensure compliance with the new rules, the Province will establish a short-term rental registry. Hosts will need to include a provincial registration number on their listings, along with their business license number if required. Short-term rental platforms must validate these numbers against the provincial registry data.

Additionally, a provincial compliance and enforcement unit will be established to track compliance, issue orders, and administer penalties for violations.

Implications for Alberta

The introduction of these regulations in BC has sparked discussions about potential implications for Alberta's real estate landscape. As investors in BC navigate the changing regulatory environment, Alberta may emerge as an attractive destination for those seeking new opportunities in the short-term rental market. The possibility of a more stable regulatory environment in Alberta, combined with the potential for increased demand in this sector, could lead to investors selling their BC properties and venturing into Alberta or other parts of Canada.  The stringent limitations on short-term rentals in BC may divert tourism dollars to other regions in Canada, like the Bow Valley, where a wider range of more affordable accommodation options are available, potentially attracting more visitors and bolstering local tourism economies.

If you are looking to purchase a vacation rental property in Canmore, you may want to secure a purchase sooner than later in the event that we do see an influx of BC investors looking to move their for profit housing investments to other markets. 

For prospective homebuyers in Canmore, the impact of BC investors shifting their focus to the Bow Valley should be minimal. Canmore has been proactive in addressing short-term rentals long before online platforms like Airbnb and VRBO became popular. The town's Land Use Bylaws have already established clear guidelines for short-term rentals – a property must have "Visitor Accommodation" or "Tourist Home" designated as a permitted use. Licensing requirements, much like those soon to be introduced in BC, have been in place for years. These regulations are aimed at preserving existing residential inventory from being converted into short-term rentals and safeguarding long-term renters from potential displacement by landlords seeking higher profits through short-term rentals. While tackling the housing crisis is crucial, Canmore's unique challenges are driven by various factors, including residential properties that remain vacant and a focus on Visitor Accommodation developments rather than residential ones, which does not effectively address the town's supply issue or provide affordable housing for its residents. Adopting a similar approach to BC's Short-Term Rental Accommodation Act wouldn't provide a viable solution to Canmore's housing crisis, as the town has already implemented similar control mechanisms to prevent or discourage the conversion of long-term rentals into short-term ones.

Conclusion

BC's new regulations for short-term rentals represent a concerted effort to address the housing crisis by returning valuable housing inventory to the long-term rental market. While the impact on BC's real estate and tourism industries is evident, the implications for Alberta may include an influx of investors looking for more favorable conditions. As these regulations unfold over the next two years, it's essential to stay informed about how they shape the real estate landscapes in both provinces, working toward a balance that benefits residents, investors, and the broader community.

If you're in the market for a home in Canmore, Alberta, you may come across houses with preserved wood foundations.  In a recent purchase, I helped my Buyers navigate a preserved wood foundation that wasn’t disclosed in the listing as it is a blended foundation with a concrete wall at the front of the house but transition to preserved wood in the sides & rear wall of the home, an understandable mistake to have made but an important disclosure to have stumbled upon for my Buyer.  Luckily, we had a home inspection condition and worked with Adam of Homestead inspections, who identified preserved wood in a small crawlspace area AND the there was moisture present in the rear wall of the house.  For many Buyers, this would have been deal breaking, a non-waiver signed and delivered before the home inspection was even finished.  My Buyers however wanted to continue to pursue the home but obviously needed more information in the evolving situation so we extended our condition date and got a foundation specialist in to make a recommendation.  In this case, with the slope of the lot and some exterior landscaping features, it appears to be a drainage issue where water was pooling in one area against the foundation wall and it’s suspected no weeping tile is present because it wasn’t needed for code when the home was built so there is nothing encouraging water to move away from the foundation wall.  The wall will need to be re-damp proofed and a sump pump installed if no weeping tile is found but once the repairs are made, there shouldn’t be any more cause for concern and after some re-negotiations, my Buyers are excited at the memories they and their family will make in their Canmore home.

These foundations have a unique history and characteristics, particularly in this beautiful mountain town and working through the questions, fears and unknowns with my Buyers, it seemed like a good time to take a closer look at preserved wood in Canmore which are common in Cougar Creek, Peaks of Grassi - and now apparently sprinkled around Eagle Terrace. In recent years, preserved wood foundations have gotten a bit of a bad reputation but in the right environment with a little education and care of ownership, they don’t have to be a bad thing compared to their concrete counter part, especially in the right environment like Canmore with it’s dry climate.

A Brief History of Preserved Wood in Alberta

Preserved wood foundations, often referred to as pressure-treated wood foundations, were a common foundation type starting in the 1960’s spanning the late 90’s.  This construction technique involves using lumber that has been treated with chemicals to resist decay and insect damage. The process involves pressure-treating the wood with preservatives like chromated copper arsenate (CCA) or ammoniacal copper zinc arsenate (ACZA). This treatment makes the wood highly resistant to rot and pests, extending its lifespan significantly.

Positives of Preserved Wood Foundations

1. Durability

One of the key advantages of houses with preserved wood foundations is their durability. The preserved wood is well-suited to withstand the often harsh mountain climate, including heavy snowfall, freezing temperatures, and moisture. It resists decay and insect damage, which are common issues for traditional wood foundations.  They also have more flex than concrete which is prone to cracking as the ground settles or it goes through a few freeze-thaw cycles so it can withstand movement within a ‘normal’ range any new home experiences.

2. Low Maintenance

Preserved wood foundations typically require less maintenance than concrete foundations. They are resistant to decay and pests, reducing the need for frequent upkeep.  Concrete foundations are durable but may require periodic inspections for cracks and may be susceptible to moisture-related issues like cracking or efflorescence, necessitating maintenance and repairs.

3. Cost-Effective

While preserved wood foundations may have a slightly higher upfront cost compared to concrete or other materials, they can be cost-effective in the long run due to their extended lifespan and reduced maintenance requirements.

Negatives of Preserved Wood Foundations in Canmore

1. Vulnerability to Moisture

While preserved wood is resistant to moisture to some extent, it's not entirely impervious (much like concrete which is porous and also not waterproof, just resistant). In Canmore's dry climate, this might not be a significant concern, especially in areas that aren’t affected by the high water table or steep creek hazards. If the house is exposed to excessive moisture, such as flooding from nearby creeks, it could be problematic with costly  repairs or if it is caught early and addressed properly, it doesn’t have to be deal breaking in our dry climate but further due diligence is requited before making a decision on what to do, including getting a foundation specialist in.

2. Aging Preservative Treatments

Houses built in the 1990s with preserved wood foundations may have older preservative treatments like CCA, which have faced environmental and health concerns. Although the risk is generally considered low, some homeowners may prefer alternatives with newer, safer treatments.

3. Limited Load Capacity

Preserved wood foundations may have a more limited load-bearing capacity compared to concrete foundations. This limitation can affect your ability to undertake structural modifications or additions to the home in the future, potentially restricting your renovation options.  It is also why we don’t see it in large multi-unit buildings, they are most common in single family and duplexes but have been found on rare occasion in some 4-plexes locally.

Neighborhoods with Preserved Wood Foundations

In Canmore, preserved wood foundations were prevalent in neighborhoods like Cougar Creek, Peaks of Grassi, and in a handful of properties in Eagle Terrace and South Canmore. If you're considering a home in one of these neighborhoods, it's essential to assess the condition of the preserved wood foundation, as it has likely been exposed to the elements for several decades.

Before purchasing a home with a preserved wood foundation, it's advisable to:

1. Inspect Thoroughly: Hire a qualified home inspector to assess the foundation's condition, looking for signs of decay, insect damage, or other issues.  If further investigation is needed, a foundation specialist should be called in. 

2. Ask for Maintenance Records: If possible, request maintenance records from previous homeowners to ensure the foundation has been properly cared for.

3. Consider Future Maintenance: Factor in potential future maintenance costs and whether you are comfortable with the long-term care required for this type of foundation.  The key here is proper water management with lot slope, landscaping & eavestroughs/downspouts.  If you have a preserved wood foundation in a secondary home where you are not there all the time, making sure the person you have checking your property (which is usually required for insurance purposes anyways), is paying extra attention to any water in the lowest level of your home.

In conclusion, houses with preserved wood foundations can be a viable option in Canmore's typically dry climate. They offer durability and lower maintenance requirements but may have limitations in terms of aesthetics and vulnerability to moisture. If you're considering such a property in neighborhoods like Cougar Creek, Peaks of Grassi, or Eagle Terrace, make sure to perform a thorough inspection and consider both the advantages and disadvantages before making your decision.  If you google Preserved woof foundations, much like when you WebMD your symptoms, you end up with a death sentence but that’s not always accurate.  Education and working with the right people who know or understand the problem at hand is key.

NOTE:  There is a history of incorrectly built preserved wood panels used in a number of homes in Peaks of Grassi which have resulted in significant foundation issues because of the supplier’s poor craftmanship.  A developer in the area hired a manufacturing company to supply these pre-fab panels that were meant to be built, shipped then used onsite to erect the foundation walls, instead of building everything from start to finish in place.  We are now finding out that the Supplier of these panels used pressure treated plywood sheeting to encase the wall studs but the wall studs & hardware inside of the plywood panels was not pressure treated and that’s a problem.  If these untreated studs get wet, that can be hugely problematic to the structural integrity of the home.  The use of pre-fab panels vs. traditional on-site construction was not the preferred or common method used when preserved wood foundations were being built other than in Peaks of Grassi so it is again very situational depending on the property as to what your risk tolerance needs to be when looking at a home with a preserved wood foundation.  Abalon Foundation Repairs in Calgary are a wealth of knowledge on the topic for Peaks of Grassi and other foundation issues in the Bow Valley.

There was one builder in the preserved wood era who used it in some South Canmore 4-plexes, particularly on 5th Street, with the higher water table in the Valley floor, this is a less ideal environment for preserved wood making it a different conversation in that location as well.