There are very few expensive risks in the real estate market here in Vancouver.
Buying into a building with a bad envelope or leaky condo is one of those few extremely expensive risks here in Vancouver.
Why there are Leaky Condos in Vancouver
Here in Canada, the federal government changed the building codes in the early 1980s to increase the Energy Efficiency of buildings in response to the energy crises of the 1970s and 1980s.
Basically, the federal government mandated that between 1981 and 1999 buildings should have airtight or sealed walls.
Traditional building technology in Canada allows for breathable walls where water can drain out if it gets inside the walls.
This change to the building code worked fine for the rest of Canada where Winters are cold and dry. In Vancouver and the south coast of BC, it did not work very well.
Vancouver and the south coast of BC are in a temperate rainforest with a lot of wind-blown rain.
Many of the buildings built between 1981 and 1999 had water blown into the walls that couldn’t drain out for evaporate.
This caused massive issues with mold, rot, rust, among other things.
There are still many buildings that have this wall system that has not been repaired.
Fixing Leaky Condos or Face Sealed Buildings
These buildings will eventually fail and/or need to be repaired and will need to be repaired with what is called rain screen technology.
If the envelope fails in the building starts leaking you have problems with financing condos in such a building.
If you can’t finance a condo with a mortgage you can’t sell it or if you can sell it, you may have to take a big discount.
Even if it doesn’t start leaking but it needs to be repaired the cost of that repair is in most cases quite high.
I am not suggesting don’t buy into an older building.
If you want to purchase an older condo, you should be very mindful of the building envelope systems.
Please have a look at this great article on Rainscreening on Wikipedia.