There are many attractive qualities of choosing an apartment as your primary dwelling. They are often more affordable than a detached house, and there is a seemingly endless amount of choice in a continuously growing market such as Metro Vancouver’s. However, first-time buyers should be wary of, and budget for, the mandatory monthly strata fees.
What are strata fees?
These non-negotiable fees are collected from all the units and pooled together, used by the building’s strata corporation to pay for a wide range of common expenses. For example, to partially cover utilities like water and gas, and to maintain shared spaces including the lobby, hallways, lawns, amenity rooms and so forth — these can vary slightly from development to development. A portion is also diverted into a contingency reserve fund (CRF), used for major infrequent repairs, i.e. the roof and hot water boilers, as well as emergencies.
How are strata fees calculated?
The size of your individual condo, or strata lot, is referred to as the unit entitlement. The cost is determined by taking the total amount of strata expenses divided by the unit entitlement. In other words, the larger your living area, the higher the number gets. Expect older buildings, which likely require more upkeep, to be more expensive, as well as those with expanded amenities (swimming pool, steam room, etc.)
Things to think about
As previously mentioned, not all strata fees are created equal, so when shopping for an apartment check to see which of the common utilities are bundled. If purchasing resale, find out how much money is being contributed to the CRF, and whether there will be a withdrawal in the near future for any big-ticket items coming due. Or have some already been completed? Peeking into the minutes of previous strata meetings is definitely recommended. When it comes to as big an investment as this, it’s worthwhile to do your homework.
Check out our first-time condo buyers post for more valuable info.
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