I dodge a bullet the other day. A few months ago, I wrote up an apartment building which was advertised as R4 zoning. All creative issues were dealt with, financing lined up, game plan developed for hold and rent with a strata title and sell exit for a few years down the road. Last Friday I went to my lawyer to sign the docs and provide cash to close. During the meeting, my lawyer advised me that the property was actually R1 zoning. My heart stopped. How could I have missed this? How would this affect my plans to strata title? What if the property was destroyed? Would I be able to build the same building or would I be stuck with building single family? I got so caught up with the advanced details, I missed one of the most basic checks on any property. Subsequent discussions with city zoning revealed that the property has an exemption in the legislation that I would be able to rebuild if a catastrophy happened and there was no problem with the condo conversion. How do you spell relief?!?
So I implore you to be ever vigilent when you are buying any property. Pull the title, check zoning, get the rent estoppel from the tenants, read your appraisal and inspection. And actually look at all the details, don`t just gloss over them, so you know exactly what is going on with your proposed investment. I have an excellent team of realtors and advisors that I work with but the final analysis still rests with me. I got lucky this time but I will never be lured into complacency again.
I have another apartment block under contract which we checked after this fiasco and found it to have R1A zoning. We were advised that, although we could strata title, we would only be able to build a duplex if the building was destroyed. The seller didn`t even know this. Luckily I have not removed conditions on this property so I have an out if he can`t change zoning.
So learn from my mistake and be dilligent with your due dilligence!!!
Harry
So I implore you to be ever vigilent when you are buying any property. Pull the title, check zoning, get the rent estoppel from the tenants, read your appraisal and inspection. And actually look at all the details, don`t just gloss over them, so you know exactly what is going on with your proposed investment. I have an excellent team of realtors and advisors that I work with but the final analysis still rests with me. I got lucky this time but I will never be lured into complacency again.
I have another apartment block under contract which we checked after this fiasco and found it to have R1A zoning. We were advised that, although we could strata title, we would only be able to build a duplex if the building was destroyed. The seller didn`t even know this. Luckily I have not removed conditions on this property so I have an out if he can`t change zoning.
So learn from my mistake and be dilligent with your due dilligence!!!
Harry