March 2020 Issue
(604) 857-1100
Gary and Lori Prince
Our Newsletter: Coronavirus Edition

Hello everyone!

What a month March has been so far!! The coronavirus pandemic has obviously dominated the news. While there has been only 138 confirmed cases in Canada including 1 confirmed death in a seniors home in North Vancouver as I write this, all major sporting events have been postponed or cancelled, and the stock market has crashed.

How will this affect our housing market in B.C.? Nobody knows for sure, but between that and the condo insurance crisis (we’ve included an article) it could have an effect.

Last month was a very good month for Real Estate sales despite very little fanfare in the local media. There was a 39% increase from January and a 38% increase from February of 2019. We’ll keep our finger on the pulse and get back to you next month. Until then, remember if you need any Real Estate advice or just want to talk, give us a shout.

Gary and Lori Prince
Gary and Lori Prince
RE/MAX Aldercenter Realty
(604) 857-1100

Condo insurance crisis: Deals falling through the floor


In case you haven’t heard, some condo owners have felt like setting their hair on fire over the dramatic rise in strata insurance recently. At the risk of mixing metaphors, that’s only the tip of the iceberg.

It turns out that some real estate deals that would normally sail through with ease, are falling through the floor due to the lack of available, affordable strata insurance.

“I have a few Realtors in the office whose deals have collapsed as a result of the insurance issue,” says Tore Jacobsen, managing broker with Macdonald Realty in South Surrey.

Kelvin Neufeld, managing broker at Sutton Premier in Surrey says he’s seen some transactions that were only needing paperwork, suddenly flop due to the cost of insurance.

Ironically, as a condo owner or buyer, that increase may mean you’re in luck. That’s right. Some strata corporations are not even managing to obtain insurance at all.

A Realtor, who chose not to be identified, says it’s not always clear why some properties can get insurance, and others not. One newer strata where she sells condos had to hunt down nearly two dozen insurance companies to get coverage, while another nearly identical strata nearby had no trouble.

Up and up

In any case, as reported previously in NewsReal, insurance rates are generally increasing by 30 to 50 per cent for condo buildings throughout our Board and other parts of BC. In some instances, the rates are increasing by as much as 300 per cent.

One such case was the Shoal Point residences on Dallas Road in Victoria, where the premium went from $265,000 to $817,000 and the deductible from $25,000 to $500,000

Of course, legislation requires strata corporations to have insurance. There’s no escaping it. And if you are buying a condo, there’s no way out of paying the newly higher cost of strata insurance, plus your own household insurance which may also be on the rise.

Neufeld says high strata insurance rates are often determined by a building’s size and valuation, such as new urban towers. His starkest example is a property recently valued at over $45 million, that was unable to get 100 percent coverage. With a few million dollars of coverage uninsured, the real estate deal couldn’t go through.

That gap, between what an insurer is willing to cover and the remainder, is not an uncommon one right now. Yes, the strata can find a second or third insurer to cover that gap and some do. But that also adds to the average cost per unit.

“The insurance issue has been brewing for at least six years,” says Neufeld who said he started hearing about buildings whose owners were unwilling or unable to pay maintenance costs and used insurance claims to cover the costs when the building failed in some way.

Some strata are now holding special meetings where owners can vote on whether to contribute to a cash fund to cover the insurance premiums as their renewals come due.

But here’s the rub. The deductible.

Deductibles are rising

Insurance companies have also raised the deductibles for claims. So, let’s say an owner’s water pipes caused damage to the floors of the strata building, and the deductible is $150,000. You can bet the other owners don’t want to pay for that owner’s failure to maintain their water hose or whatever was needed to prevent the flood.

As we explained in our previous NewsReal article, if a single owner is found liable and the strata corporation insists they pay the deductible, it could bankrupt them. And it doesn’t take much water to cause a lot of money’s worth of damage to a building.

Interestingly, under Alberta legislation, the maximum amount a strata corporation can impose on a unit owner who is liable for damage to the strata property, is $50,000. This means if the deductible is $25,000, then the owner’s liability would be $25,000. But even if the deductible was $100,000, the owner’s liability would still be capped at $50,000.

So far the solutions to the insurance crisis here in BC do not seem to be within easy reach. The Minister of Finance Carole James says she has referred the issue over to the B.C. Financial Services Authority to consider. Meantime, as a hopeful buyer, do you just sit and wait?

How to advise clients

“What we as Realtors have to do is protect our buyers and educate ourselves and make sure we find out what the insurance situation is at each property,” says Neufeld.

Check out if a strata has a history of claims or if they have had a habit of deferring their maintenance costs. Maintenance records will tell you whether the building has been proactive to replace water pipes and hot water tanks.

Jacobsen cautions strata corporations that under-insure in order to obtain difficult-to-get insurance, or to circumvent high rates.

“If you have a development that is underinsured by twenty million dollars, you’re just trading one problem for another if you need to put in a claim at some point,” says Jacobsen.

“We’ve been telling our folks to do their due diligence. Review the insurance certificates. Check the renewal dates. Has there been a history of claims? What is the age of the building, the size? The risk tolerance will vary by the client.”

In order to get a sale through, some sellers may agree to lower the listed price in order to nudge a buyer who is hesitant over an insurance issue. But Jacobsen doesn’t view that as a viable solution either.

“That’s a very short-term fix to a long-term problem,” he says. “I’m not surprised that may happen, to facilitate a sale. So that may help now, but it doesn’t mean that will help eight months from now when the insurance needs to be renewed and the costs of the premium per unit comes well over what the person saved on the purchase price.”

Insurance brokers’ perspective

On a recent BCREA podcast, The Changing Landscape of Strata Insurance in BC, Chair of the Insurance Brokers Association of BC Shawn Fehr, says insurance rates have been under-priced for years relative to the amount in payouts and what company shareholders demand in investment returns.

He says that historically insurance companies felt Canada was a safe place to do business because up until recently the claims were minimal relative to other parts of the world. But with risks from floods, wildfires and increased urbanization, Canada is no longer that safe haven for insurers it once was.

Local Events

Creativ Festival WEST – Abbotsford
Abbotsford, BC
March 27, 2020 - March 28, 2020
Show and Tell
Surrey, BC
March 19, 2020 - March 29, 2020
Easter Activites
Langley, BC
April 12, 2020

Latest Featured Listings

Just Listed
An image of MLS ID: R2441989

Looking for a great subdivision project? Brookswood Langley / R2441989

4 Bedrooms 2 Bathrooms 1,838 Sq Ft
An image of MLS ID: R2441283

Affordable investment with built-in tenant Aldergrove Langley / R2441283

2 Bedrooms 1 Bathrooms 951 Sq Ft
View more listings

Fraser Valley Real Estate Board


February home sales outpace new listings in Fraser Valley

In February, property sales in the Fraser Valley finished slightly above the 10‐year average for the month, while new listings came in 3 per cent below, keeping overall inventory at historically below‐average levels.

The Fraser Valley Real Estate Board processed 1,352 sales of all property types on its Multiple Listing Service® (MLS®) in February, a 39 per cent increase compared to sales in January 2020, and a 38 per cent increase compared to the 982 sales in February of last year.

Click here for the full report


There are 53 homes for sale right now, with an average list price of $871,312.
An image of MLS ID: R2433433

7039 272 Street, Langley, BC Aldergrove Langley / R2433433

3 Bedrooms 2 Bathrooms 1620 Sq Ft
An image of MLS ID: R2439040

2757 256 Street, Langley, BC Aldergrove Langley / R2439040

3 Bedrooms 3 Bathrooms 2439 Sq Ft
An image of MLS ID: R2444062

25214 52 Avenue, Langley, BC Aldergrove Langley / R2444062

5 Bedrooms 6 Bathrooms 3561 Sq Ft
View more listings

This is not intended to solicit properties currently listed for sale or individuals currently under contract with a brokerage. All information was current on Mar 16, 2020.

Powered by AvenueHQ
© 2020 AvenueHQ Technology Inc.