Condo Fees aka Monthly Fees aka Maintenance Fees
If you’re looking to buy a condo in East Van, hopefully this isn’t the first time you’ve heard of condo fees! Whether it is or isn’t news to you, I’ll detail the pros and cons of these unavoidable condo fees.
Note: This is a post in our ongoing series of everything you need to know about East Van Condos. Feel free to let us know if you have any questions, or would like to see any condos for sale in East Van.
What are Strata Fees?
Condo fees, also known as strata fees or maintenance fees are just that: a monthly fee charged by the Strata Corporation to cover common Strata expenses. These common expenses include anything from property management fees, utility bills (such as gas, hot water, etc), common city expenses (like garbage pick up) and building upkeep (which includes regular maintenance, new gym equipment, gardening, etc). Some of the strata fees often go in the contingency fund (which is kind of like the building’s bank account).
Since every building is different, what the fees cover and how much the fees are vary with each East Van condo. It’s important to know how much strata fees are in a unit you’re looking to buy because not only is the number considered when your mortgage lender is determining your affordability, but it’s a monthly fee that you HAVE to pay, and can run you into legal trouble if you don’t.
How much you pay in strata fees compared to your neighbours depends on your square footage (i.e. your percentage of ownership) – the larger units in the building have the highest fees, while the smallest units have the least expensive.
How Much are Typical Strata Fees?
Unfortunately there isn’t an easy answer that that question. Small stratas (like duplexes and triplexes) don’t often have strata fees, and prefer to deal with maintenance as it comes up (since the condo building is similar to a house, it isn’t as difficult to manage as a large building).
Large Condo buildings are often trying to maintain a good amount of money in the contingency fund to try and cover any potential building upgrades, and the daily bills to keep the building running can be high.
What Makes Strata Fees so Expensive?
Breaking down the typical factors that affect the amount of your monthly strata fees are:
Age of the East Van Condo Building
Older building generally require more upkeep than new buildings, so the expected maintenance costs are often budgeted for in the strata fees. Budgeting for large maintenance projects is difficult, so as a homeowner you may still receive a special assessment at some point to cover the rest of the cost of building maintenance and upgrades.
New Condo Buildings might do things a little bit different. Often, as an incentive to buy, developers will offer cheap condo fees for the first few years of the building. You don’t see this too often, and though it seems like a good idea, if the building needs maintenance, you’ll still have to pay for it in the form of an assessment.
Condo Building Amenities
Condo building amenities can be great if you use them. The chance of having a pool, gym, roof top patio, sauna, hot tub, party room, concierge, etc makes the building more of a community. However, these services have to be paid for by the owners, and the cost is often budgeted for in the monthly strata fees. This includes everything from pool maintenance, to deck chairs. If you don’t plan on using the amenities and what to keep your costs down, consider buying into a condo building that only has the amenities you need (some building have no amenities).
Common Utility Bills
Depending on how the condo was built, and the type of components in each unit, your monthly strata fees may cover some of your monthly bills. Gas and hot water are fairly common bills that are paid for by the Strata Corporation, meaning they will budget for these costs in the strata fees. It saves the owners from having to set up individual accounts. If you have a small apartment and a gas fireplace, you can often heat the whole unit without ever having to turn on your electric heat. It’s a small bonus, but a bonus nonetheless!
Do Strata Fees Increase?
Yes. Every year, typically at the AGM, it will be decided whether or not the monthly strata fees will increase, typically by a percentage. Strata fees can increase in order to cover upcoming maintenance, because the previous years expenses grew, or because the building wants to build a large contingency fund for emergencies.
As of the end of 2013, most condo buildings in Vancouver will have commissioned a Depreciation Report as per a new strata bylaw dictated by the city. This Depreciation Report details a 30 year maintenance and financial plan for the building so current and prospective owners will get a chance to see what maintenance will need to be done in the upcoming years. It’s understood amongst real estate professionals and property management companies that this information will lead to an increase in strata fees in most buildings, so as to start planning for the next 30 years.
Where Are Strata Fees Listed?
Strata Fees are listed on each for sale listing – it’s definitely not a secret kept from prospective Buyers. Also, the strata documents detail exactly where the building sits financially, and from a maintenance perspective so you’ll know prior to purchasing a new home.
Strata fees are a good thing in that monthly fees can help mitigate the huge cost of a possible special assessment, and can offer owners certain luxuries that only large condo buildings can offer. Come rainy season, you’ll LOVE having a gym in your building, I know I do!