Course Description and Outline

CPD 133: Valuing Residential Condominiums

Pre-requisite: Students will benefit from an understanding of real property appraisal fundamentals and techniques (BUSI 330, CPD 130, or equivalent)

Condominiums, or stratas in BC, are one of the most common forms of residential home ownership. However, consider that a condominium is actually not a property type, but rather a legal distinction for the shared ownership of real property. In residential use, condominium ownership applies to a range of property types, including townhouses, multiplexes, low-rise buildings, and high-rises. Condominiums may also include bare land or detached houses built on shared strata subdivisions.

Real estate professionals in all areas of practice may come across condominiums for a variety of purposes: development, sales, property management, mortgage financing, appraisal, or property tax assessment. In all of these contexts, the practitioner will ideally have a working knowledge of the real estate asset and the factors that affect its market value. This course is suitable for anyone in these contexts. Students will ideally already have a basic understanding of valuation methods and techniques. The course will focus on the physical aspects of condominium/strata properties, as well as the related valuation considerations.

Course Outline

Lesson 1: Residential Condominium Inspection

  • Condominium Ownership
  • Preparing for a Condominium Inspection
    • Preliminary Research
    • Planning the Inspection
  • Neighbourhood/District Analysis
  • Design and Functional Utility: Residential Properties
    • Heritage Conversions
    • Obsolescence in Multi-Family Projects
  • Site and Exterior Analysis
  • Building Structure
    • Substructure Design and Construction
    • Superstructure Design and Construction
  • Building Envelope
  • Building Interior
  • Mechanical and Service Systems
  • Life Safety and Security Systems
  • Housing Defects
  • Due Diligence/Scope in Condominium Valuation
    • Limiting Liability Concerns for Inspection
  • Appendix 1.1: Sample Inspection Forms and Checklists

Lesson 2: Residential Condominium Appraisal

  • Condominium Value Attributes
  • Condominium Valuation
    • Highest and Best Use
    • Direct Comparison Approach
  • Case Study 2.1: Mortgage Finance Appraisal
  • Case Study 2.2: Relocation Appraisal
  • Case Study 2.3: Determining a Listing Price for a Condo
  • Case Study 2.4: Superadequate Owner-Specific Improvements
  • Case Study 2.5: Estimating Exposure Time
  • Case Study 2.6: Impact of Financing on a Condominium Sale
  • Case Study 2.7: “Red Flags”, Lack of Access
  • Case Study 2.8: Special Assessments and Reserve Funds
  • Case Study 2.9: Reserve Fund Deficiencies and Market Value
  • Case Study 2.10: Strata Fees, Reserve Funds, and Market Value

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