Understanding Strata Fees in British Columbia: What They Are, How They Are Collected, and What They Cover

What Are Strata Fees?

Strata fees, also known as maintenance fees, are regular payments made by the owners of units within a strata property. These fees are essential for the ongoing maintenance and management of the common areas and facilities shared by all residents. Strata fees are calculated based on the unit entitlement of each strata lot, which is generally determined by the size of the unit relative to the overall property.

How Are Strata Fees Collected?

Strata fees are usually collected on a monthly basis. The amount each unit owner is required to pay is determined annually through the budget approved by the strata corporation at its annual general meeting (AGM). Here's a step-by-step overview of the collection process:

1. Budget Preparation: The strata council prepares an annual budget outlining the expected expenses for the upcoming year. This budget includes both operating expenses and contributions to the contingency reserve fund (CRF).
2. Approval at AGM: The proposed budget is presented to the owners at the AGM, where it must be approved by a majority vote.
3. Calculation of Fees: Once the budget is approved, the strata fees are calculated based on each unit's unit entitlement. The total budgeted amount is divided among the units according to their proportionate share.
4. Monthly Payments: Owners are notified of their monthly strata fees and are required to make payments, typically on the first of each month. Payments are usually made through electronic funds transfer, post-dated cheques, or automatic withdrawal.

What Do Strata Fees Pay For?

Strata fees cover a wide range of expenses related to the management, maintenance, and operation of the strata property. These can be broadly categorized into operating expenses and contributions to the contingency reserve fund.

Operating Expenses

Operating expenses are the day-to-day costs of running the strata property. They typically include:

• Maintenance and Repairs: Regular maintenance and repair of common areas, such as hallways, lobbies, elevators, roofs, and exterior walls.
• Utilities: Common utility costs, including electricity, water, and gas for shared facilities.
• Landscaping: Upkeep of gardens, lawns, and other green spaces within the property.
• Cleaning Services: Cleaning of common areas and facilities.
• Insurance: Building insurance covering common property and liability insurance for the strata corporation.
• Management Fees: Fees paid to a strata management company for administrative services.
• Security: Costs for security services or systems to ensure the safety of residents.
• Recreational Facilities: Maintenance of shared amenities such as gyms, swimming pools, and clubhouses.
  
  

Contingency Reserve Fund (CRF)

The CRF is a savings fund set aside for major repairs and replacements of common property and assets. Contributions to the CRF are mandatory and help ensure that the strata corporation can handle significant expenses without imposing large, unexpected special levies on owners. Common uses of the CRF include:

• Roof Replacement: Replacing the roof when it reaches the end of its useful life.
• Exterior Painting: Repainting the exterior of the buildings.
• Plumbing and Electrical Upgrades: Major repairs or upgrades to the building's plumbing and electrical systems.
• Elevator Overhaul: Significant repairs or replacement of elevator systems.
  
  

Additional Fees and Special Levies

In addition to regular strata fees, owners may occasionally face special levies. These are additional charges imposed when there are insufficient funds in the operating budget or CRF to cover unexpected or large-scale projects. Special levies require approval by a majority vote at a general meeting.

Conclusion

Strata fees are a fundamental aspect of owning a strata property in British Columbia. They ensure that the common areas and facilities are well-maintained, contributing to the overall value and livability of the property. Understanding how these fees are calculated, collected, and utilized can help potential buyers make informed decisions and budget accordingly. If you have any questions or need further clarification, don't hesitate to reach out to your strata council or property manager.