If you are hunting for affordable property in Richmond, you might not be completely out of luck. A condo located on Lindsay Road is listed for just under $200,000.
But there’s a catch -- it’s a leasehold property.
A leasehold property means that the owner owns the house or condo itself but not the land it is built on. The land is leased to the homeowner by the landowner for a determined amount of time.
The lease for this ground-flour, one-bedroom condo, with a fenced yard, is good until 2087, at which time, the lease can be renegotiated or terminated.
The other catch is that the landowner can demand payment for building repairs.
Richmond-based realtor Wilson Chiu said there are currently 15 leasehold condos for sale in Richmond and nine of them are listed under $300,000.
“I believe the cost is a factor and some people choose leasehold because of that,” said Chiu.
But buyers need to do more research before purchasing leasehold properties.
The Richmond News previously reported that dozens of leaseholders living at 6420 Buswell St., a block east of Richmond Centre, were worried they might end up living on the street if they could not come up with the $40,000 per unit their landlord was demanding for repair work on the building’s exterior.
Several residents looked into possible legislation that would protect them from being forced to pay the repair fees, but found it doesn’t exist.
Another realtor Gary K. Louis said, if possible, buyers should consult with a leasehold lawyer in advance of a purchase.
“Most realtors probably don’t have a grasp of the ins and outs of leasehold property (contracts) since they can be very complicated, and most realtors don’t encounter them on a day-to-day basis,” said Louis.
The Ministry of Municipal Affairs and Housing said the province is taking steps to inform buyers about the potential risks of leaseholder properties. However, “residents of these buildings are governed by private contracts with the building owner and disputes are handled through the courts under common and contract law.”
