the
     Condo
Advocate


               Restoration Project Managers
             for BC's Leaky Condos












Financing the Restoration
 

How to pay for the restoration costs is a factor that should be considered as soon as the initial assessment of the extent of the required building restoration is made. The Building Envelope Engineer should be able to give a cost estimate well before the Strata Corporation holds a Special General Meeting (SGM) and well before the Special Assessment invoices are issued. Owners who need to acquire financing for the building restoration should allow themselves four to ten weeks for this process.
 

This section deals primarily with those owners who require help in financing for their portion of the building restoration. For those owners who have cash resources to pay for the process, we would advice, at the very minimum that you consult with your financial planner and accountant so that you are aware of the tax implications involved in this process.

Sources of Financing the Restoration

Traditional,

Government Assistance,

Non-traditional

The last Resort- no funds

Traditional Sources of Financing - Banks and Credit Unions
 
  • Mortgage Financing - an owner must have sufficient equity in their home to be able to increase or re-negotiate their mortgage. Our experts advise that talking to your Mortgage holder is the first critical step to be done regardless of your equity position.
  • Personal Loan - usually a collateral loan with money borrowed against personal assets with a fixed repayment schedule and fixed interest rate.
  • Line of Credit - usually a line of credit is secured against personal assets and can be used as required. A Line of Credit has more flexible repayment terms and a floating interest rate

Contact your Bank or Credit Union for more information on traditional finance options. For Bank and Credit Union web sites click here.
 

Government Assistance - Homeowner Protection Office (HPO)

The Homeowner Protection Office is considered to be an excellent option for the financing of a building restoration. Owners may apply for a Homeowner Reconstruction Loan through the Homeowner Protection Office. This program provides "no interest loans" to eligible homeowners. It is available to:
 
  • Persons owning a home with premature envelope deterioration
  • When an owner does not have financial means to pay for repairs - however, owners are not required to use pension plan assets, RRSP's, or the first $10,000 of liquid assets.
  • When an owner does not have enough equity to qualify for a standard loan.
  • When an owner cannot afford the monthly loan payments of a standard loan to pay for repairs.
  • When the home is located in the coastal climate zone.

For more information contact the Homeowner Protection Office (HPO) at:

Phone: 1-800-407-7757 or their Website: http://www.hpo.bc.ca/Loan/index.htm
 

Non- traditional Sources of Financing - Private Funds
 
  • Friends and Family. Family and friends is an alternative source of funds that is well worth checking into. Our experts tell us however, that if you want to remain friends with your family and still have your other friends at the end of the loan period, get an independent professional third party to act as a broker for you.
  • Pension and other Institution Funds This type of financing is different, in that the lender finances the Strata Corporation and not the individual owner. The Strata Corp can choose the amount to be financed and the term over which the debt will be spread. Terms can run anywhere from two years to five years with an amortization period of up to twenty years. The advantage of this for the owners and Strata Corporation is that smaller payments can sometimes be negotiated. There are many advantages to this type of loan for the Strata Corporation and the Strata owners including:
    • Owners do not need to use personal savings
    • There is no personal credit application which means no credit inquiry
    • This loan is not an increase in your mortgage
    • And, because this is not a personal loan it is not registered on your title and there are no personal guarantee

    This type of financing option is not always available, but feel free to email us for more information and to inquire about the availability of funds at info@thecondoadvocate.com
     

    The Last Resort - No funds
     
    • The Walk Away Option. Okay, you have tried all the finance options listed above and nothing has worked out. You may now be contemplating the last option that you think is open to you, and that is to walk away from your home. Our experts tell us that this is the worst possible option for you, your family, and your credit rating. Stop, first talk to a Credit Counsellor before you make this dramatic decision. For a list of Credit Counselors click here