File Number:    HPO - 98-001
Date:    October 14, 1998   

RECONSTRUCTION LOANS NOW AVAILABLE TO OWNERS OF LEAKY CONDOS

VANCOUVER - The Homeowner Protection Office has launched a reconstruction program which will provide no-interest loans to owners of leaky condos unable to pay for repairs needed to fix building envelope failures, Municipal Affairs Minister Jenny Kwan and HPO CEO Shayne Ramsay announced today.

"Since the Homeowner Protection Office opened on Oct. 1, we have reached an agreement with financial institutions to consult with the HPO before foreclosing, and we have stepped in twice to prevent foreclosures," said Kwan. "Now the long-term solution is in place. For the first time, leaky condo owners in greatest need can secure financing for repairs so they can keep their homes and protect their equity."

The reconstruction program offers five-year no-interest loans to qualified homeowners who have exhausted all other financing options. The loans will cover the full amount required for repairs plus related legal costs.

"We've come up with a manageable repayment schedule that recognizes the financial difficulties faced by seniors and low-income homeowners," said Ramsay. "In addition, nobody will have to touch their RRSPs, pension plan savings or the first $5,000 of liquid assets."

The provincial government has committed up to $75 million in bridge financing to kickstart the program. This contribution will be repaid over time through a special assessment on residential builders.

The reconstruction program will apply in the coastal climatic zone, where the problem is most severe. The zone includes the following regions:

• Lower Mainland and the Fraser Valley including Hope;

• Vancouver Island, Gulf Islands, Queen Charlotte Islands and other Coast Islands;

• Sunshine Coast and areas north of the Sunshine Coast including Bella Coola, Kitimat, Powell River, Prince Rupert, Skeena and surrounding communities.

The reconstruction program is a partnership involving the B.C. government, banks and credit unions, and Canada Mortgage and Housing Corp. The Homeowner Protection Office will process applications and issue a certificate of approval to qualified homeowners. Upon presentation of the certificate, a loan for the full cost of the repairs and related legal expenses will be made by the financial institution which holds the applicant's first mortgage. CMHC will insure the loan.

An information package on the reconstruction program is available from the Homeowner Protection Office. Homeowners can call the Homeowner Protection Office in Vancouver at 646-7055 or toll free at 1-800-407-7757. The information package and application form are also available at http://www.hpo.bc.ca on the HPO s website.

"Through our partnership with B.C. financial institutions, we will have loan officers available to discuss individual cases with homeowners," said Ramsay. "Once an application is submitted, a decision will be made within two weeks."

"BC's banks are proud of their role in helping to develop this loans program. Working closely with the Homeowner Protection Office we now have a clear, consistent and streamlined application process to ensure that eligible homeowners can arrange the financing they need without a lot of red tape and paperwork," said Paul Griffin, Regional Manager of the Canadian Banker's Association.

"As a major participant in the residential mortgage market in British Columbia, the credit union system is pleased to have this program in place," said Wayne Nygren, president and chief executive officer of Credit Union Central of British Columbia. "It will certainly help those of our members in dire need of building repairs."

"The government is to be commended for responding to the plight of homeowners with construction problems who were represented at the Barrett Commission," said Nona Saunders of the Condominium Home Owners Association. "The Homeowner Protection Office will assist those most in need and help ensure that similar problems do not occur in the future."

The Homeowner Protection Office is also working with the residential construction industry, homeowners and building professionals regarding the mandatory new home warranty system and residential builder licensing program. These programs will be phased in starting Jan. 1, 1999.

Contacts:    Jan Calkins
                    Homeowner Protection Office
                    (604) 646-7050 (Vancouver)       

                    Erik Kaye
                    Ministry of Municipal Affairs
                    (250) 387-4089 (Victoria)

Last Updated: November 25, 2003