Excellent summary of the market conditions, Steve. This reminds me of the leaky condo period. Developers used numbered companies to hide from liabilities. In the end, the poor condo owners took the hit.
I wonder if developers are still hiding from liability by this corporate structure? Steve, could you comment on this for us?
Here’s the condo history:
The “leaky condo” crisis in Vancouver refers to a significant construction and financial issue that emerged in the late 1980s and persisted into the early 2000s. During this period, numerous multi-unit condominium buildings in the Lower Mainland and Vancouver Island regions suffered extensive damage due to rainwater infiltration. This infiltration led to structural problems such as rot, mold growth, and, in severe cases, compromised structural integrity. 
Key Factors Contributing to the Crisis:
1. Design Choices: The adoption of architectural styles suited to drier climates, such as those in California and the Mediterranean, was ill-suited for Vancouver’s wet conditions. Features like minimal roof overhangs and stucco cladding without adequate drainage systems allowed water to penetrate building envelopes. 
2. Construction Practices: A construction boom during this era led to rapid development, often at the expense of quality. Some developers and contractors lacked experience with the local climate, resulting in buildings that couldn’t withstand Vancouver’s high rainfall. 
3. Regulatory Oversight: Building codes at the time did not adequately address the unique challenges posed by Vancouver’s climate. Additionally, enforcement of existing regulations was often lax, allowing substandard construction practices to go unchecked. 
Impact:
By 2003, the British Columbia Homeowner Protection Office had identified approximately 65,000 leaky condos across the province. The financial burden of repairs was substantial, with many homeowners facing costs in the tens or hundreds of thousands of dollars. The crisis is estimated to have cost the B.C. economy billions of dollars. 
Response and Reforms:
In response to the crisis, the provincial government established the Barrett Commission of Inquiry in 1998 to investigate the issue. The commission’s findings led to significant changes in building codes, including the mandatory implementation of rainscreen technology in new constructions to enhance water drainage and prevent future leaks. Additionally, the government introduced interest-free loans to assist affected homeowners with repair costs. 
Current Considerations:
While many affected buildings have been repaired, some structures from that era may still have unresolved issues. Prospective buyers are advised to conduct thorough inspections and review building maintenance records to ensure that any past problems have been adequately addressed. 
The leaky condo crisis serves as a cautionary tale about the importance of designing and constructing buildings that are well-suited to their environmental conditions, as well as the need for rigorous regulatory oversight to ensure building integrity.
“The cure for high prices is high prices”
Excellent summary of the market conditions, Steve. This reminds me of the leaky condo period. Developers used numbered companies to hide from liabilities. In the end, the poor condo owners took the hit.
I wonder if developers are still hiding from liability by this corporate structure? Steve, could you comment on this for us?
Here’s the condo history:
The “leaky condo” crisis in Vancouver refers to a significant construction and financial issue that emerged in the late 1980s and persisted into the early 2000s. During this period, numerous multi-unit condominium buildings in the Lower Mainland and Vancouver Island regions suffered extensive damage due to rainwater infiltration. This infiltration led to structural problems such as rot, mold growth, and, in severe cases, compromised structural integrity. 
Key Factors Contributing to the Crisis:
1. Design Choices: The adoption of architectural styles suited to drier climates, such as those in California and the Mediterranean, was ill-suited for Vancouver’s wet conditions. Features like minimal roof overhangs and stucco cladding without adequate drainage systems allowed water to penetrate building envelopes. 
2. Construction Practices: A construction boom during this era led to rapid development, often at the expense of quality. Some developers and contractors lacked experience with the local climate, resulting in buildings that couldn’t withstand Vancouver’s high rainfall. 
3. Regulatory Oversight: Building codes at the time did not adequately address the unique challenges posed by Vancouver’s climate. Additionally, enforcement of existing regulations was often lax, allowing substandard construction practices to go unchecked. 
Impact:
By 2003, the British Columbia Homeowner Protection Office had identified approximately 65,000 leaky condos across the province. The financial burden of repairs was substantial, with many homeowners facing costs in the tens or hundreds of thousands of dollars. The crisis is estimated to have cost the B.C. economy billions of dollars. 
Response and Reforms:
In response to the crisis, the provincial government established the Barrett Commission of Inquiry in 1998 to investigate the issue. The commission’s findings led to significant changes in building codes, including the mandatory implementation of rainscreen technology in new constructions to enhance water drainage and prevent future leaks. Additionally, the government introduced interest-free loans to assist affected homeowners with repair costs. 
Current Considerations:
While many affected buildings have been repaired, some structures from that era may still have unresolved issues. Prospective buyers are advised to conduct thorough inspections and review building maintenance records to ensure that any past problems have been adequately addressed. 
The leaky condo crisis serves as a cautionary tale about the importance of designing and constructing buildings that are well-suited to their environmental conditions, as well as the need for rigorous regulatory oversight to ensure building integrity.