Richard Bergeron

June 30 has come and gone and along with it the deadline for paying our property taxes in Calgary (if you are not on the TIPPS program). Most of us know that our taxes are based on the value of our property as of the previous year. Take a moment and think ahead to, June 30, 2007. The amount of that tax bill will be based on the value of your condo now. We all know what has happened to property values in Calgary over the past 12 months. If the average price of property has increased 40% it stands to reason that your tax bill will go up 40%, as well. This doesn’t take into account the planned increase the city has already budgeted for.

Does the Fair Market Value method of taxation calculation put an unfair burden on condominiums, especially inner city condos? The values of inner city condos have seen phenomenal increases over the past 24 months, due in large part to their proximity to the city core. Have these properties put any additional strain on the city budget? Do they require or need new roads to be built, new utility services installed, new schools built, additional transit and garbage pick up planned, or even shopping centres to be developed as is the case in numerous subdivisions being constructed around the city? The obvious answer is no. The inner city condos already have infrastructure in place to accommodate the residents in them. It seems inequitable then that the tax collected from them is being used to subsidize further urban sprawl.

Our city is grappling with the growing pains of a successful economy (road congestion, children being bused long distances to school, longer commutes to work, etc). What if City Hall were to turn the question around. Instead of focusing on better ways to move people into the suburbs, why not find a way to get more people closer to the core, where they obviously want to be!

If you want to people to pay attention, make it financially attractive to them. One suggestion is to offer a reduction or subsidy on condominium property taxes if the condo is located within a certain distance from the city centre. This would encourage people to look at property ownership closer in nd would help alleviate the strain on the city of providing additional infrastructure in outlying communities.

This may seem a controversial option now. 12 months from now, when a 900 SF 2 bedroom condo in the Beltline is saddled with a $4000/year property tax bill, this option may gain a great deal of support!

Are we there yet? On March 28, the city’s Standing Policy Committee voted in favour of a “new” curbside recycling program policy, which is to be voted on by city council on April 16, 2007. This new and improved version will see 300,000 homes (including up to 4-plexes) see weekly pick up of recyclables, including plastics, but excluding food and yard waste. The existing city run recycling depots, totaling nearly 50, located across the city will continue to be operated. This is a great step towards achieving the city’s goal of recycling 80% of the city’s waste material by 2020.

The 2006 city civic census reported a total number of 408,543 residential units. Yet only 300,000 residential units will be served by the new recycling policy, if adopted. More than 25% of the city’s residential units will not have curbside recycling offered to them. It is safe to assume that this number encompasses condominium buildings over 4 units and their residents.

What recycling options are there for condominium dwellers? The city has said the existing recycling depots will remain in place. However, how practical is it for a person who may not have a vehicle to transport their recycling materials to one of these depots, either by foot or on the bus? Other options must be analyzed. Condominium corporations need to look at implementing a recycling program of their own.

As the city has found, there is a monetary cost that accompanies any recycling program. It must be taken into account, however, that an expenditure outlay for a recycling program is accompanied by monetary savings in other areas (not needing to build and maintain another land fill for example). The same is true for condominium buildings. Keep in mind the City of Calgary does not pick up waste from condominiums. This expense is paid for by the owners through their condo fees and can range from a few thousand dollars a year to tens of thousands of dollars for large buildings. By decreasing the amount of “waste” picked up at a decreased cost and allocating those funds for “recyclables” to be picked up would most likely not be any more expensive for the average condo building.

There are already numerous buildings doing exactly this. If yours isn’t, ask the question why. Then put a plan in place to begin. Recycling in condos: Because we can!

Condo plan or proposed condo plan, bylaws, annual general meeting minutes, last 12 months of board minutes, monthly unaudited financial statements, reserve fund study, plan and amount in the fund, management agreement, insurance certificate, percentage of owner occupied units, lease agreements pertaining to parking stalls. These documents and perhaps more depending on the condominium building form the package that all potential condo owners should review and be satisfied with prior to finalizing a conditional offer on a condominium unit. If the list seems a bit daunting (and it should) there is good reason. In addition to purchasing the unit you are also purchasing part ownership in the condominium corporation, a corporation that can have a great impact on your quality of life (ie bylaw restrictions) and your pocket book (potential cash calls).

Any sound, professionally prepared offer to purchase should contain a buyer’s condition that the buyer is given all condominium corporation documentation and upon receipt of all documents have the opportunity to review and be satisfied with them. Where most offers fall short is that the time frame to review these documents is time specific and not tied to when the final document is provided to the buyer.

It’s more often the case than not that sellers do not have on hand all the required documentation to provide to a buyer when an offer is accepted. The scramble begins to locate or order from the management company the required information. If the condition date is a specific calendar date this puts the buyer at a disadvantage in terms of having enough time to review the documents. In the case of new condominiums this situation is resolved by the Alberta Condominium Property Act which states any prospective buyer has 10 days, upon receipt of all documents to review them and be satisfied with them.

As condominium ownership has become a greater segment of the real estate market the awareness of the importance of the condominium corporation documents has increased. This is evident in the number of companies a buyer can hire to review these documents on their behalf. Only seven years ago there were a handful of companies in the city that offered this service. If a buyer thought to have anything reviewed more often that not they consulted with their lawyer. Although lawyers play an integral role in the buying and selling of real estate, their expertise is not in deciphering condo documents. Today buyers have a choice of more than a dozen reputable companies capable of the task.

Given the scope of the financial commitment a buyer is making with condo purchase and that a buyer has to abide by the corporation’s bylaws (can you have a pet, are there age restrictions) the old adage “Assume Nothing” is most appropriate to adhere to. The cost of having documents professionally reviewed will pay dividends in the future!

Recently I worked with a client looking to purchase a condo in the Beltline area. My client, a lawyer from Ontario, has had significant experience in condo living, serving on the condo board in the building where he lives in Toronto. After viewing many properties, the decision came down to one of two units in two different buildings.

Both buildings were nearly identical in age, number of units, style and size of units and parking (part indoors and part outside). The first building was located in a very desirable area with many amenities such as shops and restaurants steps from the door and offered a strong reserve fund, but had outdated common areas. The second building was in an emerging neighbourhood, with substantial construction of upscale condos and amenities in the works, but currently not as good a location as the first building and it did not have as strong a reserve fund. The suite in the first building was a penthouse and the suite in the second building was not.

While in different buildings, each condo met the client’s needs in terms of size, layout and number of bedrooms and price point. Which one to choose? After much research on my part it may surprise you that the client chose the unit in the second building with the less superior location and smaller reserve fund! Here’s why.

The sale statistics for the building he chose showed a trend of buyers repeatedly paying more for units in this building than in the first building which offered the better location and large reserve fund. It was obvious from first entering the chosen building that the owners and management had invested a lot of time, money and effort into their building. The elevator had been replaced, the lobby updated with new, longer lasting materials in contemporary colours, new window coverings were in the lobby, hallway lighting had been improved, silver hardware replaced the older brass style, there were updated fire exit signs, new parkade lighting installed and the parkade had been painted. In addition, after reviewing the condominium documents it was revealed more improvements where scheduled. It was evident the owners were proud to call this building home by wisely spending money to update and maintain the structure and common areas of their building.

Although the reserve fund was not as strong as the first building, it was clearly demonstrated that the owners in this building were actively involved in maintaining and increasing the collective value of each owner’s investment. The proof of higher value in the second building was demonstrated through sales of $20,000-$40,000 more for the same type of condo as compared to the first building. Through research and analysis my client bought a condo in a superior building which will protect and increase his investment in the future.

When condo buildings were constructed in the 1970’s and 80’s it was very popular for a building to have amenity areas for the owners. These may have included group/party rooms, saunas, hot tubs, exercise areas and change rooms. Over the years many of these have fallen into disuse or disrepair. On average, a small percentage of owners utilize these amenities. The emphasis placed on keeping them maintained and updated is diminished.

There is a financially rewarding option many condominium corporations are currently exploring. More and more are looking to sell these areas, either renovated or not, as individual residential units. There are several factors driving this trend in condo buildings.

The first is obviously the great increase in condominium property value Calgary has experienced over the past several years. Condo boards are eyeing the large sums of money that the corporation could realize from selling the unused or under-utilized common areas in the building as individual units. This money could be used to re-furbish other common areas such as the halls and lobbies or be put to major capital expenditures such as replacing old elevators or roofs, thus alleviating the need for special assessments or higher condo fees. Remaining funds could be allocated to the reserve fund for future use. Updating and upgrading the building would increase the overall property values of units in the building, thereby benefiting all owners.

The second reason for this trend is that these underutilized areas are usually a drain on the collective expenses of the building. They still need to be heated, cleaned and maintained. Boards are looking to turn this expense into an asset.

A third reason is that with another unit in the building paying condo fees, each owners monthly fees may actually decrease.

The process to convert common area to individual ownership is a lengthy one and involves the services of a qualified condominium lawyer as well as the guidance of the management company. A special resolution needs to be passed by 75 % of the ownership (not always an easy number to achieve). The condo plan needs to be resurveyed with new unit factors assigned to each unit. A title needs to be created for the new unit and each title in the building needs to be amended with their new unit factor. This whole process can take over a year and in some cases several years! Given the Calgary real estate market, the financial rewards for the corporation can be great and outweigh the time, effort and expense required.

Currently there are several buildings in the Beltline in various stages of this process. Over time buyers will see more of these situations as they look to purchase resale units, or even one of the former common area suites.

Recently I was showing suites in an upscale, newly constructed condo building in Eau Claire. When I stepped out of the elevator it was like walking into a bright sunny day; the amount of hallway lighting was the most I had ever seen in a condo building. Every 4 feet a wall sconce was on either side of the hall as well as 4 overhead pot lights. You could almost feel the heat coming off the light fixtures. Later I was informed that the condo fee for the suite my clients were interested in had just jumped 30%, due mostly in part to electricity costs! With the amount of lighting in the common areas I saw and the type of light bulbs used this was no surprise.

Here is a classic example of how choosing a greener approach to our lives can actually pay dividends, rather than costing consumers more. The budgeted amount for electricity for this building prior to the condo fee increase was $110,000 for the year. Image if the condo association board for this building chose to change all the common area lighting to compact fluorescent (CF) bulbs. True, there would be an initial cost outlay to purchase new bulbs, at approximately $2 per bulb. However, the CF bulbs have a lifespan of 6,000 hours compared to 750 hours for incandescent bulbs and the energy usage is roughly 25% of incandescent bulbs.

Under this new scenario, the board would be able to reduce condo fees rather than have to increase them! When was the last time that happened? By thinking “green”, the owners of the building could actually save money. The board could go a step further and put in place a building policy that individual unit owners use a minimum number of CF bulbs in their suites as well. In the case of this building, the electricity for the suites is not individually metered and the condo association pays for everyone’s electricity. This small change would be a cost savings for the owners year after year.

The promise of saving a few bucks a year by using 1 CF bulb may not send you rushing out to replace your bulbs. But consider the wider impact when this is applied on a broad scale, as in a condo building. The green benefits suddenly become very tangible, especially to your pocketbook!

There are hundreds of condominium buildings in Calgary. Each one is unique in its own way. Some have very distinguishing features such as a great architectural design, a swimming pool, running track, or maybe retail shops in the buildings. But can you name something that less than 10 condominium buildings in Calgary possess? The answer is a building concierge. This person is, by definition according to Webster’s dictionary, a caretaker or doorkeeper. In today’s age of busy lifestyles a concierge is so much more to the people who are lucky enough to reside in a building featuring a concierge service.

“Knowing that Arnold and Elaine, our building’s concierge’s, are on the job to ensure my guests are warmly greeted and know where to find my condo gives me great peace of mind. Not to mention the added sense of security I have because everyone who enters the building is received at the front desk” says Chateau La Caille resident Carol Bennet.

For Don Skelton of 500 Eau Claire, having a concierge in the building meant he could renovate his condo without taking on a scheduling nightmare. “When we moved into the building we had no idea of the value that having a concierge would bring. We spent months having work done on our condo, and if we had to let each tradesperson into the unit day after day, I would have had to quit my job. With our concierge there to let each tradesperson into the unit, our renovation went much smoother than expected. We couldn’t have done it without their service.”

Service is what the job of concierge is all about. For the owners and residents in the building, service can mean different things to each one. A smiling face to greet you after a gruelling day at the office, co-ordinating tradespeople for your renovation, facilitating fire equipment testing, disseminating condominium corporation information to all owners, having someone to accept your drycleaning when it is dropped off are a few of the many responsibilities and services a concierge has to offer. Most importantly, the concierge is the face of your building’s community that the rest of the city sees on a daily basis. The concierge is also a reflection of those who reside in the building.

With so few buildings in Calgary offering this dynamic service it is not surprising that these buildings are so desirable for people looking to buy condominiums. And this demand seems to be increasing. Of the few buildings offering concierge service, all but two have been built in the past seven years. Currently, there are 2 new concierge buildings under construction in the Eau Claire area alone and a third in Connaught. Maybe you see a need in your life for the services a concierge has to offer! Find out which concierge will meet your service needs.

The face of the real estate market place in Calgary is once again changing. Just when it seems there couldn’t be any more real estate rules to be broken, a new twist has been thrown into the mix. Auctioned real estate has come to Calgary!

You may have read that a home in NE Calgary sold recently through an auctioning process. In other parts of the world auctioned real estate is common due to the lack of a successful MLS system. In the past auctioning real estate in Alberta has been mostly limited to estate sales. An auctioning mentality is not new to Calgarians.

Many resale properties marketed through the MLS system are currently being sold under a multiple offer situation, where all the buyers know that all competing offers will be presented to the seller at the same time. This heightens the excitement around the offer process and buyers get caught up in the energy of the unknown. What will it take in terms of price to “win” this property? In order for their “bid” to win out, buyers need to know the maximum they will pay for a property to win out in the bidding process. This process is very similar to that experienced at an auction.

As the supply of resale residential property in Calgary continues to remain low, buyers will continue to compete for new inventory. So the benefits to the seller in the auctioning format may initially appear obvious: they are guaranteed the best price for their property.

Is this really the case? The seller is vulnerable by only exposing their property to a fewer number of prospective buyers than if the property was marketed on the proven MLS system. Especially today Calgary is experiencing a real estate frenzy where by there are 1,000’s of prospective buyers working diligently with real estate professionals through the highly acclaimed MLS system. By not taking advantage of the proven MLS system using an experienced and reputable real estate professional the selling price may in actual fact be limited.

What is outrageous is the seller without realizing it may be leaving money on the table! Another drawback for the seller is the lack of information regarding the perspective buyer who places the highest bid. Using an auctioning process anyone can bid on the property. For Sale By Owner in this situation does not have the backup of a real estate professional representing the buyer to make sure that the deal closes without incident.. A buyer working with a Realtor is more likely to have been guided through the qualifying and pre-approval process for purchasing a property, thereby minimizing the possibility of a sale collapsing through due to the buyer not qualifying for a mortgage.

It appears Calgary will be seeing more auctioning of real estate before long. People love to try new things! But keep in mind, a new format doesn’t automatically mean more money for your property. Auctioning your valuable property may in fact mean less!

As diverse as the population is in Calgary, so are the communities that make up the inner city. Over the past 10 years as each area has seen an increase in new development, each has also been defining and refining it’s own identity.

Beltline – the communities just south of downtown include Connaught, Mission, Cliff Bungalow and Lower Mount Royal collectively make up the Beltline. A perennial favourite with the younger crowd due to it’s proximity to downtown jobs, restaurants and bars, shops and coffee houses. Many residents live here without requiring the use of a vehicle, all amenities are so close! There is always something to do, someone to meet or somewhere to go in the Beltline. There have been numerous new condo developments here over the past 10 years, as well as many older rental buildings being converted to condo ownership.

Victoria Park/East Village – this is an area to watch over the next several years. As the Calgary Exhibition and Stampede continues it’s land expansion and re-development, the surrounding community will have new life and vitality to spare! A ton of new, high rise, high end condo and commercial buildings are slated for the new Stampede Station area, offering upscale urban living at the gateway to Downtown. The city’s plans for the East Village will offer new and exciting condo opportunities for future residents, while also providing the services and green space inner city dwellers crave. Victoria Park also offers a unique selection of warehouse/loft condo buildings, not found anywhere else in the city.

Kensington – across the river the area of Hillhurst and Sunnyside are always on the cutting edge of trendy. Smaller condo developments, rental conversions and renovated character homes give this area a flair all it’s own. With Prince’s Island park and the Bow River Pathway system on it’s doorstep, a multitude of Kensington shops, services and restaurants to choose from and Riley park at the back door, it’s easy to see why so many people are clambering to live in Kensington.

Bridgeland – another area that has seen it’s share of redevelopment in it’s recent past with even more on the horizon, is Bridgeland. What used to be a predominately single family home area has been jump-started and energized with new condo construction, including the re-development of the former General Hospital site into The Bridges. If an ethnic flair is more to your liking, you will love the Italian groceries and restaurants, Tai food and other great services Bridgeland has to offer. And don’t miss out on some of the best skyline views this city has to offer, all from Bridgeland.

As you can see, no matter what your lifestyle, tastes or budget, the inner city has the perfect match for you.

Dreaming of Luxury? Calgary’s condominium market has many buildings and units that fit the luxury criteria. Even though luxury can mean many things to many different people, chances are, there is a condominium that matches your definition and requirements.

When “luxury” is discussed, most people picture in their mind a high-end level of finishing. Features like gleaming hardwood floors, stainless steel appliances, gourmet kitchens, marble and granite counters and floors, sumptuous ensuites, oversized casings and mouldings, soaring ceilings and non-stop views are but a few of the images that you would expect to see in a “luxury” condominium. Calgary offers many buildings both new and established that automatically fit these images, but there are many individual units in a variety of buildings across the city that have seen spectacular renovations that place them firmly in the category of “luxury”. All you need to do is look at the number of condominiums that sell for more than a half a million dollars these days (nearly 70 in the past year alone on the MLS!).

Perhaps your version of luxury has more to do with a great location or proximity to amenities than with finishing. Adding the luxury of more time to your life may be what you are after. Many people are moving into inner city areas to facilitate an increase in personal time. With people’s busy lives, a shorter work commute, being walking distance to the gym, grocery store, movie theatre, restaurants and other services is what many people consider a luxury. There are many condominiums that match this criteria without being accompanied by a hefty price tag!

And don’t forget the luxury of additional services that a condominium building can offer owners. More and more buildings in the city are offering concierge services for their owners. For some, a concierge can be a true luxury, facilitating a multitude of services, not the least of which is security for the building. Additional amenities in some buildings now include fully equipped exercise facilities, car wash bays, whirlpool saunas, lap pools, wine cellars, meeting and board rooms, party rooms, hobby rooms, movie theaters and guest accommodations.

Almost all condominiums offer owners the luxury of having maintenance done for them. The management company co-ordinates snow removal, lawn and garden maintenance, garbage removal, building maintenance including parkade and carpet cleaning, elevator maintenance, administrative duties and many more behind the scenes jobs that owners don’t have to worry about. All this is looked after through the owners condominium fees.

So is luxury on your mind? Look to condominiums and let your dreams come true!