Skip to main content

One of Vancouver’s biggest developers has entered new territory in the evolving world of B.C. condos by creating a penthouse in a separate air-space parcel from the rest of the building, which will put it outside the control of other strata owners, rules and fees.

Concord Pacific, which in 2019 received permission from the city to add an 18th floor to its high-end Avenue One tower near Olympic Village, turned that floor into a 7,200-square-foot apartment with 11,000 feet of outdoor deck that includes a pool, as well as a parking space and what is labelled as a chauffeur’s washroom underground. The parcel, currently valued at $17.5-million, also includes a guest unit on the 17th floor and a dedicated cab in one of the three elevators. It has been sold and will be transferred soon to the new buyer, said Matt Meehan, the developer’s senior vice-president.

The building, a spectacular development with lush landscaping where units have been sold for around $1,400 a square foot, received initial approval in 2015 and is currently in the final stages of construction. Condo purchasers, many of whom completed their acquisitions in the fall, have been moving in the past couple of months and are only starting to hold their first strata-council meetings.

However, the penthouse is a separate legal entity from the other 238 condo apartments and six townhouses in the building. Legal specialists, marketers, planners and other developers say they’ve never seen such a separation in another building in the city. And some of those experts say people who buy condos in a building structured like that may not understand what they are getting into and how it could affect their costs and operations, including insurance.

“These are complex to create and then hard to understand who assumes the liability,” said Tony Gioventu, the executive director of the Condo Home Owners Association of B.C. “[Buyers] won’t understand any of this.”

Mr. Gioventu said the strata will need to be careful about insurance, because the strata is liable for the building as a whole.

“Residential owners have to maintain the insurance on the entire building.”

Three purchasers said they didn’t feel as though buyers understood completely what was involved when the top floor was created as a separate air parcel or how the costs would be shared, including insurance issues related to the pool that will be on the roof as part of the penthouse.

One purchaser said they knew there would be an extra floor but not that it would be separate from the strata, while others said there were concerns about access to the third elevator that has a double cab, with one cab available only for the penthouse.

The Globe and Mail is not naming the sources because negotiations about the issues pertaining to the parcel continue with the developer.

The development had five separate disclosure statements over a period of five years amounting to 404 pages of details about the building. The information about the new penthouse and its separate legal existence appeared in the third amendment that was issued Nov. 4, 2019.

Officials at Concord Pacific, the company led by Terry Hui that developed much of north False Creek, say that the separate air-space parcel is an idea that might be used in other buildings.

“We are definitely looking at this for future penthouses,” Mr. Meehan said.

This despite the cost of making that kind of arrangement: Concord paid $5-million to the city in community-amenity contributions in order to add the top floor and about another $200,000 for fees and legal work to make it a separate air-space parcel. The company also spent an extra $1-million to put in features, such as remote water shut-offs, and others to ensure strata residents below are protected from issues in the penthouse.

Concord representatives say they believe other strata residents will be satisfied with how costs are shared between the main strata and the eventual penthouse owner.

“[The company has] been very fair and generous. I think they’ll be happy,” Mr. Meehan said.

The penthouse is currently owned by a corporation called Concord Avenue One (Nominee) Ltd., set up specifically for that site; setting up separate companies for individual projects is a common practice of developers.

City of Vancouver officials said that separate air-space parcels are frequently used in condo buildings to demarcate different uses, such as when there are commercial spaces on the ground floor with condos on top. And they said there is nothing in current laws that would prevent one unit from being a separate parcel. However, no one currently on staff could recall any other building in Vancouver where a single apartment was separate from others in a building.

At least one developer, Rosebud Properties president Harvey Dales, said he was told by the city five years ago that he couldn’t have a penthouse in a separate air-space parcel in a building he was hoping to develop on Robson Street.

“We wanted to build a 32-storey building with 31 being rental and the top floor a stratified penthouse for myself,” he said in an e-mail. “The City told me to build all condos if I wanted a stratified penthouse, and wasn’t prepared to consider a separate air parcel for the top floor.”

The creation of the separate air-space parcel for a single residential unit is just the latest in the complex and evolving world of condo ownership, where public legal fights and quieter tussles are occurring in several buildings as various groups of owners are disagreeing with developers about who gets to use common spaces and what the split of shared costs should be.

Mr. Hui attracted attention earlier this year when strata owners in another building where he has a penthouse, The Erickson, got an order from the city demanding that he be prevented from taking over an area that was supposed to be common property. The building, developed by Concord, has a 6,000-square-foot space on the second floor that condo owners said was supposed to be a common space, but that Mr. Hui took over. The city recently turned down his application to amend his development permit to make the space for his sole use.

In other buildings, there have been grumblings – or actual legal cases – about having to share in expenses for common areas that they think the original developer should be paying for. A recent notable case was the strata owners at the Firenze, a set of towers near Rogers Arena downtown, who challenged the requirement that they pay for part of the upkeep of the Keefer Steps nearby. They lost.

We have a weekly Western Canada newsletter written by our B.C. and Alberta bureau chiefs, providing a comprehensive package of the news you need to know about the region and its place in the issues facing Canada. Sign up today.