Homeowner Protection Office Faces Challenges – What Does It Mean To You? | Vancouver Real Estate Blog

You probably have never heard of the Homeowner Protection Office. It’s an agency that most of us never hear about unless we find ourselves in dire straights (facing a large assessment on a condo, for instance). The HPO was created out of the height of the Leaky Condo crisis that leveled the Vancouver real estate market in the mid-1990s.

Protecting consumers of new construction is the mandate of the HPO. Since 1998 it has given out $670 million in loans that have helped over 16,000 homeowners. Unfortunately, due to the slowdown in construction in Vancouver real estate (as well as the entire province) it has entered into it’s own crisis and may need to seek it’s own protection.

Funding for the HPO comes from the constructions of new homes. Every time a unit is built $750 goes to the HPO. This money is used to fund it’s operations, but is also used as interest free loans to consumers that purchased leaky condos.

Last week the government announced that the HPO had run into financial difficulty. In fact, leaky-condo repair loans had been halted in some cases. This was a direct result of the slowdown in the Vancouver real estate market and the resulting cutbacks in construction. Without a funding source, the money in the bank began to quickly dry up.

The result is that many condo owners have been put in a precarious financial position. How will this situation be resolved? It would appear that the provincial government will step in and fill the funding gap. Given the cyclical nature of real estate and construction, it would appear to be a wise decision to look at alternate funding methods.

If the provincial government steps in quickly to provide funding to the HPO, I doubt that this news will have much impact on any of us (other than the handful of owners currently inconvenienced by the delay in loan payments). However, if the province does not step in there could be dire consequences for us all.

The most direct impact could be a significant lose of consumer confidence. Consumers need to feel confident in the products they are buying for a robust market to exist. Should that confidence falter in new buyers we may find that we all suffer from the effects.

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On June 22nd, 2009 I broke the record for the most ascents of the Grouse Grind for charity. The Royal LePage Shelter Foundation is an incredible organization which is there to help women and children suffering from domestic abuse. Of every dollar donated, 100% goes directly to those in need (Royal LePage covers all administrative costs of the charity).