james_smith99

Can someone tell me what strata fees are actually for ?? i get the general idea that if you're in a flat\apartment its for the roof etc, or in some situations you might have a pool or other shared facility that needs to be maintained. but a lot of the places i'm looking at (in kelowna, BC if that makes any difference) are detached houses - so what does the strata fee buy you ??

el_richo

What does the realtor or agent say?

I'd have thought in the context you're questioning, it'd be for gardening and other such maintenance of public areas for the immediate vicinity?

james_smith99

I'm just browsing the mls site to be honest. we were out there in the summer and a realtor showed us round quite a few properties but i don't remember talking about the strata fees in any detail. as i said, i'm ok with the idea of paying for obvious shared facilities (pools, roofs etc.), but they seem to be almost the norm so I wondered if theres something fundamental i'm missing (i.e. you always pay for the local sewers\drainage\pavements\whatever through the strata fee).

i can always email the realtor but just thought i'd ask if there was any standard things i wasn't aware of on here

cheers

R I C H

I pay a strata fee of $25 per year - it covers the cost of public liability insurance for the 1000+ acres of common land on each side of the valley that the 20 properties have access to for recreation.

Strata fees for sewers/drains are normally associated with higher density development that either the city has declined to provide services/utilities to, or that the developer has chosen to go the strata option. Where strata fees are in place, there's usually a committee of residents that take responsibility for accessing fees, engaging contractors (for snow ploughing etc) and ensuring that the strata rules are enforced.

james_smith99

Thanks. Some of the places i looked at seem to be talking about $200 a month strata so i think they may be buying a new snow plough every year !

typically these seem like newer developments so i guess that has something to do with it. in some cases i know they do have outside space so at a guess i would think the developers rent the land back to the community, otherwise i can't see what several hundred people paying a couple of thousand dollars a year are paying for. if its for grass cutting and snow ploughing at least i know what my next career move will be after i land

R I C H

When I owned a business property, it took around 4hrs to plough after snowfall. 75+hrs of machine time in a winter, plus operator cost is expensive, and I live in an area where snowfall is relatively light.

I've a friend that pays a similar amount, it covers the maintenance/gardening for communal areas, snow ploughing/removal, street sweeping, sewerage, street lighting, garbage pick up and an RV/boat parking lot (strata rules don't permit RV's and boats to be parked in residential driveways).

JonboyE

In a new development the strata council has to build up a reserve so it collects more than it needs. Once the reserve is achieved the fees may go down.

Reading the minutes of the strata council, and going through their accounts, is an important part of due diligence when buying strata property.

james_smith99

So is that in place of a rates\council tax type payment or in addition to it. It seems like those services are what we'd expect from paying council tax here so presumably you get hit with 2 payments in those areas.

R I C H

Rates/taxes from the city are proportionally lower depending on services that do/don't supply the development, so you don't get hit twice. No different than living outside of city limits where garbage collection or city water isn't supplied and property tax is therefore lower.

ExKiwilass

Jonboy E is right. Part of the strata fee should be going into a contingency fund to deal with things like roof repairs, leaks to the envelope, etc. If the strata fees are too low (depending on the kind of development it is) I'd be wary as it could mean being stuck with an assessment later when the building needs repairs. Assessments can be thousands.

Our old strata fee was 135 bucks a month. It turned out to be too low and the strata got into debt. In our case the strata fee covered:

property manager's fees (necessary for parking enforcement, checks of the property, etc)
snow clearance
gutter clearance
landscape maintenance
parkade maintenance
contingency fund
painting

Like anything you get what you pay for. Higher strata fees tend to mean more amenities, like a pool, gym, sauna, maybe a concierge, beautiful landscaping etc.

You can choose a development with lower strata fees, but it also might mean there is less landscaping, building maintenance (the building doesn't look as good as it could) etc which can effect your property value.

For instance, we went with a cheaper quote for landscaping and honestly, the landscaping looked like crap most of teh time. You def. get what you pay for.

james_smith99

Thanks for the info. As the places we're looking at are houses then i'd assume its not for the structural maintenance but for the landscaping and services; snow clearing, landscaping etc. All good to know though as strata fees are more widespread than i realised, as i thought initially it was mostly apartments that would have them.

PMM

Hi

1. If it is a house, check to see if it is a "bare land" strata where you are responsible for all the maintenance, including painting & repairs. Regular strata where the Strata takes care of all common property maintenance painting repair of the outside of the unit in which you are responsible for your maintenance of property and any limited use common property.
2. Before you buy get hold of the minutes and read them thoroughly to make sure that there are not some extraordinary expenses in the future where you will be paying a large assessment. An example is the "leaky" condos in Vancouver where unit holders had assessments upwards of $50K to pay for rain screening the property.

JonboyE

You know what they say about assume? It makes an ASS of U and ME.

You need to read the strata rules and find out what the fees cover. As PMM says you have to read the minutes as well. If the last minutes had two items:

1 the roof is leaking, and
2 we have no money left in the account

then you will expect to get a bill for several thousand dollars in the near future. Obviously, this affect the price you are prepare to offer, if you still want to make an offer at all.

ExKiwilass

JonboyE is right. You can't assume. Some single family homes are stratafied which can mean the strata does take care of building envelope, roof etc.

james_smith99

fair enough, no more assumptions from me on strata fees (i reserve the right to make lazy assumptions on everything else until someone on here corrects me though !!)

thanks for the info though, at least i have some idea what i'm looking at now