Whistler Real Estate – The High Cost of Being Locked Out

BAW4.2Perhaps nothing illustrates the economic and political risks of investing in Whistler Phase 2 real estate quite like real numbers. So lets use mine.

Before we get started, I’d like to clarify that I, like most people understand that with any real estate investment there is risk. And I am prepared to deal with ups and downs that go with supply and demand.  I am from BC, and I bought property there to be part of the community.  So I expected that there could be downside, markets would change, economic drivers would change…. things happen. However, in our case, something very unpredictable and unforeseen occurred that had nothing to do with supply and demand.

Our project became the target of a professional investor who bought a large block of units in the project. He then unilaterally installed himself as manager, said the agreements he assumed that required him to pay other owners weren’t valid, and locked owners out of their units in an attempt to get them to accept him as their manager.  He used my property and others for free for more than a year without paying us.  He justified his behavior by saying the City of Whistler’s Phase 2 covenant allowed him to do all of this. He says if he can’t use our rooms then neither can we.  h

We’ve tried every way we can think of to encourage a process where an independent manager would be selected.  Let’s just say the current manager isn’t fond of the idea of getting rid of himself.

I’d like to underscore that my wife and I (and other owners) are completely locked out of real estate that we own. We have never missed a mortgage payment, a property tax payment, a strata fee payment or fees to Tourism Whistler. But we are locked out and have NO access to our own property.

Did I mention I’m locked out?

Now on to the numbers……

My wife and I bought 2 Phase 2 units in the Nita Lake Lodge. Like many of the other unit owners, we purchased the units several years ago and helped finance and build the project (as is customary in many Whistler phase 2 properties).

So how did that turn out? Lets have a look…….

Total Purchase Price of 2 units –   $998,186

Our HSBC Mortgage –                     $3,264 per month   (after putting 35% down)

Strata Fees –                                     $1,645 per month

Whistler Tourism Fees –                  $1013 per year

Property Tax –                                   $3,995 per year

So my wife and I pay $63,916 per year for a Whistler investment that we are locked out of and can’t use.

If you use the last several sales of Nita Lake units as a proxy, our $1m purchase price for 2 units is worth approximately $200,000 (if we are lucky, and you can clearly see that I’m not).

The manager says this is just what Phase 2 properties are worth.  We don’t agree.  Let’s be specific: the problem from our point of view is not that Phase 2 properties are down.  This manager has used our property to build his business, while I have zero access to my own property.  The problem is Whistler, specifically its failure to administer its own Phase 2 covenant. They have the latitude within their own covenant to fix this.  The City’s inaction has both created and enabled this situation to continue.

Those of us contributing to this website plan to be part of the Whistler community for many years.  This isn’t about normal ups and downs in markets.  It’s about asking people to do their jobs: if you’re going to force yourself into a project as a manager, then pay the owners.  And if you’re going to set up rules that leave room for judgment, then apply them.  Don’t just hide.

If this can happen to us, it can happen to you.

Until we have a City that stands up and administers its own rules and doesn’t allow them to be abused…..you should think twice about buying Whistler Phase 2 real estate (see the list here)

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