June 13, 2017 Strata Fees: You Really Get What You Pay For Property management fees can come with great benefits for homeowners such as this cozy outdoor theatre at Lumina Brentwood.
STRATA FEES - SHINING A POSITIVE LIGHT
For those of you who are contemplating buying a condo but are uneasy about the monthly strata fees – don’t be so concerned! Although strata fees are typically viewed in a negative light because they’re another monthly cost you must account for in your budget, these fees actually come with some huge benefits to the homeowner.
WHAT ARE MY FEES CONTRIBUTING TO?
There are two funds that every strata corporation in BC must maintain: an Operating Fund and a Contingency Reserve Fund (CRF). The Operating Fund is used to pay for common expenses that maintain the building (often these are expenses that occur more than once a year). This includes building insurance, property manager’s fees, gardening, garbage collection, water, maintaining common property, upkeep of amenities, cleaning, repairs, etc. The CRF is the fund that is typically used to pay for the larger, unexpected expenses which might include a lobby upgrade, new roof or gutters.
HOW ARE MY STRATA FEES DETERMINED?
Typically, strata fees are determined by your Strata Council and are approved by a majority vote at the Annual General Meeting (AGM). It’s important to note that the fees can be reexamined throughout the year if the Strata Council deems necessary. Within two weeks of the budget passing, the strata corporation must inform owners of the new strata fees.
Your individual strata fee is assessed by taking the total cost of the strata’s expenses and dividing that by the unit entitlement of your strata lot. This means the larger square footage of your home, the bigger your fee. In the case of presale developments, a property management company is hired by the developer and is responsible for creating the initial operating budget and strata fee schedule which can then be adjusted when the strata council is created at completion.
SECURITY AND PEACE OF MIND
Unlike single family homes where you are completely responsible for managing and paying for all repairs and maintenance, your strata fees are a fixed monthly sum that will cover all the everyday expenses associated with the maintenance of your condo building and pay for the appropriate people to manage and fix any issues. It means you don’t need to shovel or salt a driveway, clean gutters, or paint the exterior (unless you really want to!).
Remember, the next time you're in the market for a condo, keep in mind that strata fees are a way of planning and accounting for the short and long-term costs associated with your home and when it's time for those substantial repairs, you shouldn't be inconvenienced by a large bill!