Stratas and Fees
Living in a community with strata fees definitely has some great benefits, and if you are considering downsizing, then you owe it to yourself to do some learning on this topic and familiarize yourself with all things strata. If you are done doing your own repairs, or are not a handyman yourself, and you are done with the burden of maintenance of your home, then strata fees are worth your while. Sometimes the initial sticker price of the fees is a shock. However, upon a thorough review of the fees and what is included, we often see that the owners in a strata are receiving a lot of benefits for a reasonable amount of money. The truth rests firmly on your home purchase goals as well as your personal financial position.
EVERYTHING ADDS UP
You’ve heard it before right? Everything adds up. Well what exactly is ‘everything’?! That’s fundamental to the equation and the very first thing you need to know is: what is included in the fees? Each building / community is different, and a proper review of the strata documentation is absolutely necessary. Your Realtor will review this documentation, and you (the buyer) need to take this very seriously and also review the documentation. If you feel that this is way out of your comfort zone, then there is actually a service you can pay for that will ease your mind greatly. This service is provided by a company called Condo Clear and you will find the link to their website below.
Strata fees include services that would cost typically much more if you were paying for it on your own such as if you owned a single family dwelling. Things like gardening, landscaping, snow and ice removal, gutter and roof cleaning, skylight repair and/or replacement, duct cleaning, tree trimming…the list goes on and on, and like I said already, it all depends on the strata. Within a strata the costs for maintenance and repairs are spread out amongst all the residents and are usually far lower compared to doing it all on your own.
Strata buildings can have gyms, pools, community rooms, guest rooms, barbeque areas, and more. These are often common areas that are available for use by all the residents, and the upkeep is covered by the strata fees. Obviously if you had your own indoor pool at your single family home, the cost to maintain it would be far greater.
Stuff Gets Done
In a well run strata, the stuff that needs to get done, should get done. That does not mean that it actually IS getting done! Which is why a review of the Minutes is extremely important. This is how we see what is going on month to month, whether items are being dealt with or simply pushed off for sometime in the future. Remember the neighbour who doesn’t really like to do the lawn, or the garden, or…whatever?! Maybe a bunch of junk is in the yard or the house is getting really run down? In a strata, there is a process in place to ensure that the care and maintenance gets done. The management maintains the neighborhood and the owners are required to take care of any hazards that may exist.
Costs are Less
It’s safe to say that, overall, the costs to purchase a condo or strata unit are less than purchasing a single family home of the same overall size, location and age. The strata fees are typically going to cover costs such as trash removal, outside maintainance and so much more. This makes being a homeowner less daunting, the time you spend on upkeep is less and you don’t have to worry about suddenly having significant expenses come up that you alone are responsible for.
Typical Strata Fee Factors
Below is a list of common factors which apply to most properties that incur strata fees:
Available Amenities: The more amenities a building offers the higher your condo fees will be. Some buildings come with a pool, community rooms, a guest suite, a gym, party rooms, a security system...the list goes on and depends on the building. There are lots of other things that may be available for owners, and it’s paid for through strata fees. Strata fees cover the usage, operation, and upkeep of these amenities.
Age of Building(s). Older buildings tend to cost more to maintain than new buildings. Generally speaking, older buildings break down easier and more often than newer buildings. That said, new buildings don’t always have the lowest strata fees. It depends on what is included in the cost.
Utilities: Some or all water, heat and hydro. For older buildings heat may be centralized instead of controlled in each unit. In this case, the heat would likely be included in the strata fees.
Repairs and Maintenance: Regular repairs and maintenance required for basic operation of your building’s common amenities are always included in your strata fees. A couple of examples include landscaping, snow removal, garbage disposal, and cleaning of common areas.
Size of Building: How large the building you live in will play an important role in how expensive your condo fees are. In general, larger strata developments tend to have lower condo fees, because the cost is split among all the owners.
Reserve Fund: A portion of the strata fees is placed into a reserve fund each month. A reserve fund is mandatory for all stratas in Canada. In the event of an emergency within the strata building(s), the reserve fund is used to cover the cost of unexpected repairs.
Increase in Fees: Strata fees can increase at any time. The building’s board controls the strata fee and if they decide that it needs to be revised, they can do so. An increase in strata fees could be for an array of reasons. Please definitely consider this factor when determining the affordability of a potential strata home!
It can be discouraging and frustrating knowing that you need to pay strata fees on top of a mortgage and other housing costs. Remember, strata fees aren’t a bad thing, and there are benefits to paying strata fees:
Either You Pay or They Pay: Strata fees mainly pay for repairs and maintenance of the building. If you own a single family home, you will pay for and complete all the repairs and maintenance for your home. It is a benefit having someone else manage the repairs and maintenance for you.
Split Costs: Repairs, maintenance and other costs of your building are split among all the residents. If you live on your own, you are responsible for these costs. This can be very hard on cash flow and your monthly budget.
Amenities at Your Disposal: If you want a home security system, a pool, a gym, or countless other amenities, you will have to pay for them one way or another. If these kinds of amenities are included in your building, the costs are paid for by the strata fees. If you want these amenities while living in a single family home, you will pay someone else for them. Either way, you will pay someone for these perks!
Thanks for your interest in Warmland Blog. There are some links below for more information.
From my home to yours, enjoy the summer! Please keep me in mind if you are considering making a move, buying or selling a home, or simply want information! I am delighted to be of service.
Budgeting / Strata Fees:
Condo Clear Services
British Columbia Financial Services Authority (BCFSA)