Vancouver City Council and the Strata Leaseholders Society (the Society) have concluded negotiations supporting a proposal to extend the leases in False Creek South for an additional 20 years. The Society is the bargaining agent for over 2/3 of the 669 strata leaseholders in the area, with the purpose of promoting the interests of its owners. The proposal forms part of the overall lease renewal package that requires agreement to:
- rent prepayment amounts for each leasehold unit, and
- an agreed method for calculating the Leaseholder’s Interest in the Strata Lot (LISL), the value that is payable to the leaseholder at the lease end.
The proposal includes lease extensions for 20 years, with those:
- originally ending in 2036, extended to 2056;
- those originally ending in 2040, extended to 2060 (including Harbour Terrace); and
- those originally ending in 2046, extended to 2066.
In the proposal, the rent and prepayment would be based on (1) the mutually agreed-to current market value of the bare land for its current purpose on which the buildings have been constructed, and (2) agreed methods of determining the rent for the period of the lease extension and of discounting the rent in consideration of its advance payment. And (3), the provision for lease end value that provides a clear market-based method to calculate the lease end value – something that was absent in the original leases that refer to a value as if the lease did not end.
This is good news for current owners and prospective purchasers looking to acquire False Creek South real estate, but trepidatious about the uncertainty surrounding what will happen to their interests at the end of the lease term. It can cost upwards of $150,000 to extend the lease, yet prior to the proposal, most of the residents decided not to. It’s predominantly a lifestyle decision to purchase one of these leaseholds, as some of the main features that draw buyers to False Creek South are its proximity to Granville Island, walkability, price per square foot, and terrace-style balconies overlooking the scenic landscape.
The only way a lease renewal offer will be extended to an individual strata leaseholder is a 75% vote in favour of the package by Society members. If the vote rejects the package, no offers would be extended to anyone. The Society will be holding information sessions over the coming months to review the proposal and answer questions. If you have questions or comments, you can email email@example.com, or submit a question anonymously (https://forms.gle/tvgAzWYcSyCwLQyW7).