Is UBC on leased land?
In 2019, 71% of detached houses, and 98% of attached Condos & Townhouses sold in UBC were Leasehold properties. What this means is that when a Buyer is looking to buy a UBC Home or invest in UBC Real Estate, he or she will mostly encounter a leasehold property.
As a UBC Realtor working in the UBC area for more than ten years, many buyers have asked me, "What is a leasehold?" I thought I would take this opportunity to explain the concept of "leasehold" in this blog.
Please note that this blog is for information only. Buyers are advised to obtain independent legal advice before buying a real estate property.
What is Title to Land?
In common law, title to land means "ownership" of land. Historically, one can prove he/she has title to land or ownership of land by producing documents or deeds. Nowadays, in BC, ownership of land is registered in the Land Title Office.
There are two main types of "ownership" of land: Leasehold and Freehold. We will delve deeper into each below.
Freehold ownership is the most common type of ownership to land or real estate property in Canada. It is also what we ordinarily think of as ownership of real property. But what does freehold mean? According to the Real Estate Council of British Columbia's (RECBC) definition, freehold means, " ... The owner of the freehold interest has full use and control of the land and the buildings on it, subject to any rights of the Crown, local land-use bylaws, and any other restrictions in place at the time of purchase".
Confused? Don't worry, to put it in layman's term, freehold land or property simply means the owner has full use and control. Also, the owner could own the land or property for an unlimited period of time.
The two most important takeaway concepts about freehold are the idea of, full use and control and ownership for an unlimited period of time. Now let's look at the concept of leasehold and see how leasehold is different from freehold.
What is a leasehold, and what does leasehold mean? According to the Real Estate Council of British Columbia's (RECBC) Leasehold definition, "... the right to use a residential property for a long, but limited, period of time. The owner of this right of use has a type of ownership called a leasehold interest."
In the simplest term, the Leasehold title property means the owner DOES NOT have full use and control, and ownership is for a LIMITED period of time.
What does it mean when the leasehold property owner does not have full use and control of the land?
The use of a leasehold property is generally spelled out in a document called the Head Lease or Ground Lease. The Ground Lease documents set out the terms and conditions for the use of the land between the lessor (owner of the land) and lessee (user of the land). One good example is that the lessee (person who owns the right to the use of the land) cannot build a building on the leasehold land without prior approval from the lessor (owner of the land).
If you like a sample copy of UBC Ground Lease, please contact me.
How long is the lease period?
Leasehold interests are usually set for 99 years. All of the UBC Condos and Townhouses are set for 99 years. Some leasehold interests have a shorter time period. For example, many False Creek Leasehold properties in Vancouver have a lease period of 64 years.
What is a Strata property or Strata Apartment or Townhouse?
BC had strata legislation since 1966. On July 1, 2000, the Strata Property Act replaced the former Condominium Act. A strata development is a way of subdividing land and buildings into parts for separate ownership with common features. In a strata development, individuals can own separate parts of the same development, but share common areas and related expenses. The part of the property that an individual owns is called the "strata lot." Informally, we often call this part of the strata a "unit." The remainder of the property is called the "common property."
Types of Leasehold
There are many different types of leasehold real estate. We'll be looking at the various types of leasehold real estate in detail.
- Leasehold Prepaid - Non-Strata
This is non-strata, property, meaning the ownership of the property or land is not divided. The property sits on Leasehold land, and the use of land has been prepaid. Because the lease (use of the land) has been prepaid, the sale price is higher than the non-prepaid leasehold. An excellent example of this leasehold prepaid non-strata is 4114 Yuculta Crescent, Vancouver. It is a house with a prepaid lease until 2073.
- Leasehold Not Prepaid - Non-Strata
This is non-strata property, meaning the ownership of the property or land has not been divided. The property sits on a Leasehold land, and the use of land has not been prepaid. An example of this Leasehold prepaid non-strata is 10 Sennok Crescent, Vancouver.
- Leasehold Prepaid-Strata
This is a strata property where the lease has been prepaid. A good example of this is 307-5835 Hampton Place, Vancouver. This condo in UBC has a lease period of 99 years. It is a property with a prepaid lease until 2073. All the UBC leasehold condos and townhouses are prepaid and have 99 years lease period.
- Leasehold Not Prepaid-Strata
This is a strata property where the lease has not been prepaid. An example of this is 47-1425 Lamey's Mill Road, Vancouver. The monthly lease is $770.61/month until 2040.
- First nations lease
If the leasehold is on First Nation's Land, we often call it a First Nation Lease or First Name Leasehold. In the examples above, 4114 Yuculta Crescent, Vancouver, and 10 Sennok Crescent, Vancouver, are both on the Musqueam Band Reserve Land. There's a whole set of laws in BC and Canada that deals with First Nation's Land. Banks in Canada typically requires at least 50% down payment from the buyer for the purchase of a First Nations Leasehold property.
TYPES OF DWELLING
There are many types of dwelling a buyer may encounter when searching for a real estate in Vancouver. A residential dwelling can be broadly divided into two categories: detached or attached.
Detached House or Single Family home is a type of dwelling where there are no shared walls with any other residential property. The detached house has its front, rear, and side yards. The detached house is the most expensive type of dwelling in Vancouver.
Attached dwelling generally refers to a property with a common wall attached to another property. Townhouses and Apartments (or commonly referred to condos) are examples of the attached dwelling.
Thus, when you hear people talk about a "leasehold condo" or "leasehold property," it means the title to the condo or property is in the form of leasehold, and the dwelling type is a condo.
Is leasehold property common in BC?
Leasehold property is a very common type of real estate in British Columbia and Vancouver. Lessor (person or entity owning the land) can be a government entity (e.g., City of Vancouver), education institution (e.g., UBC and SFU), or private corporation.
Many condos in the Vancouver False Creek area are leasehold properties. As well, there are quite a few leasehold properties in the Vancouver West End area. Both 1251 Cardero Street and 1850 Comox Street are leasehold condos.
Why most condos & townhouses in UBC are leaseholds?
The reason that many condos & townhouses in UBC are leaseholds is that when the University of British Columbia was established in 1908, the Provincial Government stipulated that UBC cannot sell the land that was given to them.
In 1988, UBC Properties Trust was established to develop and bring out the untapped potential of its real estate holdings. Using the leasehold development model, UBC Properties Trust was able to circumvent the law that prohibits the university from selling free title to the land. Since 1988, UBC Properties Trust has generated over $1.6 billion in revenue to the UBC Endowment Fund.
Why do all UBC leasehold properties have a 99 years lease period?
The idea of the 99-year term was only an arbitrary period beyond the life expectancy of any possible lessee or lessor.
What happens to the UBC lease after 99 years?
At the end of the 99-year term, the lessee will have to surrender the Strata lot to the lessor unless the lease is renewed.
What will happen to the value of the leasehold property when I want to sell it ten years later?
It is generally hard to predict the future value of real estate prices. I generally tell my clients that leasehold property usually depreciate in value when there are less than 25 years left on the lease term. The reason is that banks do not want to lend money to a buyer buying a leasehold property when the term of the lease is less than the term of the mortgage.
The first leasehold property was built in 1992, and this means it has 71 years left on the lease. If a buyer bought the condo that was built in 1992, and owns the condo for ten years, by the time he or she sells the condo, the condo will have 61 years of lease remaining. The value of the leasehold property will be on par with a freehold property of the same age, size, and condition.
In my experience, UBC leasehold properties maintain excellent value because of the superb location in Greater Vancouver.
What is a leasehold property?
A leasehold property is any type of dwelling property built on leasehold land.
Is leasehold property easy to sell?
The sale of any real estate is contingent on the price, condition, location, supply, and demand. Thus, any of the above factors will affect the saleability of real estate. If a leasehold property is not priced well and not in good condition, it will take longer to sell.
What is the resale value of a leasehold property vs. freehold property?
As mentioned earlier, real estate is contingent on the price, condition, location, supply, and demand. The resale value of a leasehold property will start to decline when the lease term remaining is less than the term of a mortgage (usually 25 years).
Freehold vs. Leasehold
It is hard to say which one is better. When I work with a buyer looking to buy a property in UBC, I usually advise them to find a property that best suits their needs. Some buyers I have worked with could never get over the emotional hurdle of owning a leasehold property. In that case, I tell them a freehold property suits them best.
On the other hand, I have worked with buyers who value location more than leasehold properties. These are buyers who are suitable to buy leasehold properties.
Do I still need to pay property tax for a UBC Leasehold property?
UBC leasehold property owner is still required to pay property tax. The property tax in UBC is different than that of the City of Vancouver.
Leasehold properties in UBC do not pay Vancouver property tax. UBC property owners only pay UBC Servies Levy and Rural Tax.
If I want to buy a UBC Leasehold property, can I get a mortgage from the bank?
From the bank's perspective, UBC leasehold is generally considered as solid as a freehold property. Buyers can apply for the first mortgage from major banks such as RBC, Bank of Montreal, and TD Bank. Leasehold property value starts to depreciate when the term of the lease is less than the term of the mortgage. The average mortgage term is 25 years amortization period.
I have worked with many buyers and helped them obtain mortgages for buying a home in UBC. If you need any help getting mortgage finance, we have a team of mortgage brokers who can help you.
More Homes & Real Estates for Sale MLS Listings
UBC condo owners could be liable to pay for their strata's water damage deductible, even if they're not responsible for damages.
For UBC condo owners, it is important to note that Strata corporation can legally sue an owner to recover the deductible if the owner is responsible for a loss or damage; even if it is beyond the unit owner's control!
For example, if a pipe burst from within the walls of your unit or a faulty washing machine connection causes a water leak, the owner could be held accountable.
If an owner's condo insurance policy does not cover the required limit of coverage they may have to pay out of pocket, and strata building policy deductibles range from $2,500-$150,000.
Condominium insurance usually provides limited coverage for strata deductibles, but you can often increase coverage for a small additional premium.
If you have bought or are considering buying UBC Real Estate it is important to make sure you have enough coverage for your property.
Why not visit the friendly staffs at InsureBC to see if you have enough coverage? They are located at 3318 Wesbrook Mall. They can be reached at 604-558-2411
Do you have any further questions regarding this or any other inquiry regarding ownership and maintenance of UBC real estate? Feel free to contact the UBC Homes office anytime.
After accepted into UBC, many students face the daunting task of finding accommodations within or near the UBC Campus. Fortunately the Department of Student Housing and Hospitality Services provides accommodations for more than 8,000 students and faculty members.
However, due to limited number of space available, not all of the students are able to secure student housing. As a result, many Students’ parents consider purchaing a property within UBC. As UBC Realtor, I have helped many families in these situations.
In my years as a UBC Realtor, I have advised many prospects and clients that owning Real Estate within UBC is actually a very good investment considering the time a student will spend at the campus.
Alternatively, owning a 1 Bedroom condo in UBC, assuming the purchase price of $350,000 with 20% down payment, and 3% interest rate, 30 years amortization, the monthly mortgage payment is only $1,178. The monthly Strata fee is about $240. And tax is about $1,400/year ($116/month). Gas and utility maybe around $50-$100/month. Total monthly payment is about $1,584/month. However, mortgage payment of $1,178/month includes principle and interest. In the first couple years, interest accounts for about 50% of the mortgage payment. So in effect, the total monthly cost is actually about $995 ($1,584-$589). Roughly around $1,000/month.
That is why many families have opted to own either a 1 Bedroom Condo or a 2 Bedrooms Condo in UBC. If you are considering owning UBC Condos please don’t hesitate to contact my UBC Real Estate office today or call me anytime at 778-991-0649.
Aside from welcoming a newborn into the world, a visit to the hospital is rarely a pleasant experience for anyone, especially when a doctor or nurse pokes a needle in your arm. I certainly never enjoyed this experience when I was growing up.
However at the same time, living close to a hospital can be a blessing if you or someone in your family requires immediate medical attention. It is a blessing indeed for residents living in University Neighbourhood Association & University Endowment Land, as medical assistance is never too far away. As a UBC Realtor I can say that one of the most often asked questions posed to me by family units seeking homes in the area is in regards to the proximity of essential health facilities, beyond that of standard community walk-ins. While there are indeed fantastic facilities ranging from a UBC dental clinic a quick jaunt down Alma street, to a physiotherapty centre in the John Owen Pavilion, and even a holistic alternative health options in the area, our residents enjoy peace of mind outside of these convenient options.
Located on 2211 Wesbrook Mall, in the heart of UBC campus and within close proximity to UBC homes in the area, is the UBC hospital. The UBC Hospitalcr Urgent Care facility offers specialized treatment for non-life threatening medical emergencies by emergency trained doctors and nurses. This is a critical service essential to residents, faculties, and students.
The hospital is in the process of expanding as well. The new Djavad Mowafaghian centre for brain health at UBC hospital will be opening in the summer/fall of 2013. This is a new facility that will combine patient clinics and research in the area of neuroscience, neurology, and psychiatry. It is the first time that all the multidisciplinary areas of brain health are put together under one roof.
This is welcoming news as current and future UBC residents will be able to access these medical services.
With every new UBC real estate development in the area it seems that the services provided to the community grow exponentially as well. As a UBC Realtor I am happy to see that the area is indeed becoming a completely self-sufficient entity with even greater potential in the future. UBC homes will continue to provide both current and future residents with up-to-date information not only on UBC condos and the like, but valuable community information as well.
Until next time, stay happy & healthy!
In my years of working in UBC Real Estate, I have often asked by Buyers “Where should I buy in UBC?” UBC has 5 distinct neighbourhoods and each with its very own uniqueness, character, and personality.
In this week’s UBC Realty Blog, I’ll give an overview of the neighbourhoods in UBC.
Hampton Place was established in the early 1990’s. This is the oldest residential neighbourhood in UBC. In Hampton Place, there are a total of 957 residential units located in 11 buildings with each building widely spaced. This area is also close to the Rashpal Dhillon Track & Field Oval, Thunderbird Park, Save-On-Foods, and University Hill Secondary School. This neighbourhood has approximately 2,000 residents living here. Many of the original residents were retirees and older adults, but today, there are many families with children. Average 2 Bedroom UBC Condos in Hampton Place run about $630,000.
The East Campus is bound by University Boulevard on its northern border, Agronomy Road on its southern border, and Wesbrook Mall on its western border, and Acadia Road on its eastern border. This is an area favoured by families with children studying at the UBC. The reason that families find it desirable to live here is because of its central location. Also, it has many amenities within walking distances, i.e. Starbucks coffee, a Food court, Staples, Gold’s Gym, and a Grocery store. Average 2 Bedroom UBC Condos in East Campus are about $688,000. However, Buyers can find 2 Bedroom UBC Condos starting price at around $550,000.
Hawthorn Place provides a variety of housing options, including faculty and staff rental housing, faculty and staff co-development housing and family housing. This is a very Family-Friendly neighbourhood. The area incorporates a greenway and 3 parks. Families also enjoy the many activities offered at the Old Barn Community Centre. Pedestrian paths and cycling routes replace parking areas and assist in traffic calming. Average 2 Bedroom UBC Condos in Hawthorn Place are about $773,000.
Located north of the Gage Residences, Chancellor Place is bound by Wesbrook Mall on its eastern border, and Chancellor Boulevard on its northern Border. Restored to its original grandeur, the granite Iona Building stands at the head of this neighbourhood. Duplex townhomes along Chancellor Boulevard are complemented by apartment condominiums in the interior of the neighbourhood. Average 2 Bedroom UBC Condos in Chancellor Place are about $1,042,000, although you will find many 2 Bedroom UBC Condos at Chancellor Place that are less than that.
UBC's latest family housing initiative stretches across 110 acres of South Campus. When completed, Wesbrook Village will be the largest neighbourhood on UBC's Vancouver campus. Over 12,500 students, faculty, staff, parents, alumni and members of the general public will live here in a mix of townhouses and apartments. Average 2 Bedroom UBC Homes in Wesbrook Village are about $869,000.
As a UBC Realtor, I am here to help newcomers find their suitable neighbourhood and home. If you are looking for UBC Condos or UBC Townhouses and would like more information, please contact UBC Homes today or call me anytime at 778-991-0649.
Many that have previously worked or studied at UBC are often drawn back by the real estate developments in the area. The Campus landscape is not what it used to be 10 years ago. Many old buildings have been renovated while brand new buildings have been constructed. The topic of today's UBC Realty blog is in regards to the recent UBC real estate development in Wesbrook Village.
This new area, in my view, is the most exciting of them all. Wesbrook Village is the area located between W 16th AVE and SW Marine Drive. It is at the South Campus of UBC. The original Community Plan for Wesbrook Village was for 5,000 residents. However, in the latest Land Use Plan Amendment, the community is projected to grow to between 10,000-15,000 residents in 20 years.
As the community of Wesbrook Village grows, so is the number of shops and services. Currently, there is a Save-On-Foods, a Royal Bank of Canada, a BC Liquor Store, and the Mozart School of Music. Recently, the new University Hill Secondary School just opened its door to welcome its students in January.
Future development includes a new community centre, residential housing, and commercial spaces. Although the area is undergoing a tremendous change, UBC real estate and area development regulations also require that the area have certain Parks and Recreation facilities for its residents. For every brick and mortar an equal (or more) amount of green space is being created/maintained and that is one of the most important developments to the proud UBC community.
I am sure as the area grows more people will be looking for UBC Condos and Townhouses in the Wesbrook Village. As a UBC Realtor, I am here to provide valuable resources for future residents and to help them make the right move to this incredible living and learning environment.
If you are considering a return to, a transition within, or are joining the UBC Community for the first time, please do not hesitate to contact my UBC real estate office today or call me anytime directly at (778) 991-0649.
Many people living in UBC have wondered how their property value has changed in recent months. Certainly the media has painted a bleak picture of the Real Estate market in the Greater Vancouver area. I like to take this opportunity to present data from the UBC Real Estate market in 2012.
As seen from the graph, the AVERAGE SOLD PRICE OF Attached and Apartment has been going up steadily since 2008. For Apartment, the price peaked in 2011 at AVERAGE SOLD PRICE OF $812,511. And for Attached (Townhouse), the price peaked in 2010 at AVERAGE SOLD PRICE OF $1,281,516.
At the same time, looking at these figures, it is important to keep everything in perspective. As the AVERAGE SOLD PRICE combines prices of from properties in older residential area, i.e. Hampton Place, and newer neighbourhood, i.e. Wesbrook Village.
Thus, the value of a specific property may differ significant from the AVERAGE SOLD PRICE. It is always important to contact your UBC Real Estate Specialist concerning your property value.
One might ask the question "why the AVERAGE SOLD PRICE of Apartment is going down while the AVERAGE SOLD PRICE OF Attached is going up?"
One explanation for the Attached (Townhouse) price going up is that UBC is developing and building more properties. However, most of the new developments are in the Apartments (Condos). Therefore, the supply of Attached properties has been limited. At the same time, as the population of UBC grows, the demand for Townhouses is increase and translates into higher price.
Looking at the Apartment (Condo), price dropped by about 10% compared to 2011. As mentioned previously, the supply of Condos has increased steadily in UBC. Especially, new condo development in Wesbrook Village and East Campus, e.g. Pacific, Spirit, Ultima, Yu, Academy, Sage, Sitka, and Sale.
For more information about the value of your property, please contact Sam Huang at 778-991-0649.