The days of $400 strata fees are over!

As you can imagine, as a Managing Broker for a Vancouver Strata Management Company, we attend a LOT of strata Council meetings and AGM’s during the course of the year. Somewhere around 150-200 would be my best guess. During these meetings, we hear a lot of the same things over, and over again! For the past two years, we have heard complaints from non Council member owners at AGM’s that their strata fees are too high.

“My Realtor told me that our fees are too high, and we he won’t be able to sell our property if they go any higher.”

First of all, no disrespect to any realtors out there (I am licensed myself), but this is BS. Realtors get paid to buy and sell properties, and that’s it. They are not worried about anything else, as they earn their living solely on commissions, so please take anything that they tell you with a grain of salt. With few exceptions (such as a realtor who is also an owner), they are generally NOT experts on your building, your budget, your upcoming capital projects, your finances, etc. They are biased, and not concerned about the long term health of your building in most cases.

Secondly, in pursuit of lower strata fees, most strata buildings in Vancouver are grossly underfunded, and don’t have enough in their CRF to cover all of the things that are likely coming down the pipe such as new elevators, new roof, repiping, building envelopes, membrane replacements, etc.

Newer buildings are even worse, as the developers create unrealistic “interim” budgets that allow them to entice owners and sell lots of presales, but these are likely going to double within the first few years as they do not account for realistic expenses.

At some point, the Government will introduce mandatory funding, whereby Strata corporations are forced to save to meet their depreciation report obligations, but we’re not there yet. When this does eventually happen, fees are going to be double at least. Instead of owners cheating to keep their strata fees low and introducing special levies every year, owners are going to have to budget for much higher CRF contributions, thereby increasing strata fees exponentially.

As you can see, the days of $400 strata fees are waining. Hold on if you still can, or get ahead of the curve and start building up your CRF reserves before you don’t have a choice!

If you’re looking for some help budgeting, please reach out to our strata management company here!