Just like older buildings, newer buildings have their pros and cons. Here are a few things to consider if you’re keen to buy a new(er) unit, or are considering the differences between older and newer buildings. In general I would consider a newer unit to be less than 10 years old, particularly less than 5 years old.
Keep in mind these aren’t reasons not to purchase a newer unit, just a reminder that new units aren’t as perfect as you may expect. Better to have your expectations in check so you aren’t surprised in the future.
- Information, or lack thereof
A newer building, particularly one that is less than 2 years old, often doesn’t have much information to provide prospective purchasers. The strata will be in early stages of management and they won’t have had time to work out the kinks in the building, particularly for large buildings. In the first few years of a new building’s life the strata will be considering everything from what regular and irregular maintenance is needed, their property management relationship, appropriate budgets (and thus your strata fees) and bylaw changes so important details can change as the strata settles in. There also may not be very many meetings minutes to review if the strata hasn’t committed to a regular meeting schedule.
In addition, the strata typically doesn’t acquire any professional engineering reports commenting on the quality of building construction until the 4th year, and depreciation reports typically aren’t completed until a building is much older, so you may not have a professional engineer’s opinion on the quality of the building. You may expect a new building to be in great shape, but the building may discover some major warranty issues as they do their 5 year and 10 year warranty reviews.
- Warranty Pros and Cons
There is a specific, provincial wide warranty attached to every new condo and most new houses (check out BC Housing’s New Home Registry to verify). This new home warranty is typically called the “2-5-10 year warranty” and coverage includes:
- 2 years on labour and materials (some limits apply)
- 5 years on the building envelope, including water penetration
- 10 years on the structure of the home
- More information can be found at BCHousing.org
This 2-5-10 year home warranty offers some peace of mind as it can offer new owners protection in the case of defects, though you should know that warranties can be really hard to claim. Prior to the expiry of the 5 year envelope warranty and 10 year structural warranty the building will typically hire an engineering company to do a full warranty review, which the strata can then submit to the warranty provider if there are outstanding issues that should be covered under warranty (and thus fixed by the developer). Not only do warranty providers and developers typically fight back, but there can be some fine print that may render a warranty void (for example, did the building follow the maintenance plan provided by the developer?). If a strata files a major warranty claim, it can take years to be rectified and often ends up in a lawsuit. In the best case scenario the issue is rectified at no cost to the strata but in the worst case scenario the strata doesn’t receive any support to fix an issue.
In the last few years I’ve seen a lot of warranty claims on buildings between 5 to 10 years, so if you purchase in the building in it’s first few years you may realize the building has some major defects that will need to be rectified, one way or the other. The Developer’s reputation is a big factor to consider when purchasing a unit less than 5 years old – are they known for quality builds? is the style of construction something they’ve done before? are they building other complexes in the neighbourhood? Research the developer prior to purchasing.
- Unknown neighbours
If the building is newer, you may find that the neighbouring units are still vacant and moreso, that the commercial units are still vacant. Neighbours and businesses can change anytime in a building of any age, but it’s nice to know what you can expect when you move in. In some cases, the new build may be the first in a future community, so it may be years before their promise of amenity spaces, grocery stores, transit, etc are in place for residents so consider that when thinking about your lifestyle.