Apartment Corporations
Real estate agents may talk of “co-ops” but are almost always referring to something other than true housing co-operatives.
Most apartments and townhouses purchased today are strata lots, created under the Strata Property Act. This legislation creates condominiums that allow the purchaser to hold title to a particular unit in a development, while also having access to, and use of, common facilities (i.e. purchasers are also tenants-in-common with respect to hallways, elevators, recreational facilities, etc.).
Strata property legislation in BC only dates back to the mid-1960s, but the desire for apartment ownership goes back much further in time. Before strata legislation was enacted, people were able to employ “apartment corporations” to achieve ownership.
Apartment corporations are legal entities established under the Business Corporations Act (or its predecessors), but otherwise are quite similar to equity housing co-operatives. The shareholders do not own real property directly — just as with co-operatives, and in contrast to a strata development. Residents of an apartment corporation do own shares in a company that owns the housing (usually both buildings and land). As with housing co-operatives there is a shared, indirect ownership model: the shareholders jointly own the company that owns the housing, and individual shareholders hold leases that entitle them to live in particular units. As with equity co-ops, these shares may be traded at whatever prices the market will bear.
Although the introduction of strata legislation created a more popular method of apartment ownership, there are still significant numbers of units in the Vancouver area that operate under the apartment corporation model. A 1991 report from the Law Reform Commission of BC looked at apartment corporations, and noted that, at that time, there were some 5,500 housing units of that type in the province.
This form of housing is in decline. The buildings owned by apartment corporations tend to be older, feature larger suites and are set in established neighbourhoods. Most of the apartment corporation units that remain in BC are located on the west side of Vancouver, concentrated in the West End and Kerrisdale neighbourhoods, with a smaller cluster in the South Granville area. The buildings range in size and age. Perhaps a majority are modest three- or four-storey walkups, but some buildings are apartment towers.
In part because they lack rental protections, they are ripe for purchase by developers. Several have been lost in Kerrisdale over the last decade. Modest apartments that offered an affordable home ownership are being replaced with homes put on the market at several times their former price.
Apartment corporations are unique. They share some similarities with condominium apartments, but have their own advantages and disadvantages. Potential buyers of co-ops may face greater challenges with financing, but their money will generally go further.
Although apartment corporations must comply with human rights legislation, they may have considerable power to screen potential shareholders. Apartment corporations may set limits on the ability to rent, or house pets, or have non-adult residents. These restrictions may be beneficial, or not, depending on the goals of a potential buyer, and not every apartment corporation has them.
Apartment corporations best fit those happier with older homes and who can access enough cash for a considerable down-payment (typical minimum of 35% when seeking financing).