As a strata management company, we end up being asked this question on a regular basis. There are quite a few factors that go into setting a strata corporation budget, so it could be one of many things.
If you’re a strata owner posing this question, first and foremost we would advise you to attend the AGM where the budget is presented and voted on. This is the best way to know what’s going on with your strata fees.
Secondly, make sure that you are requesting and reviewing the monthly financials that are being prepared by your strata management company. If you’re unsure how to read them, just ask!
Thirdly, you should read and re-read your depreciation report if your strata has one. This report will give you a clear picture as to what will be going on with the finances of your building over a long period of time.
Here are a few common reasons why your strata fees might seem high in comparison with other strata properties;
1. Pools and fitness centers. Common area expenses such as recreational facilities can really add up and drive your strata fees upward.
2. Many downtown Vancouver strata properties have 24/7 concierge and security services. Guess who’s paying their salary? You are!
3. Low contingency fund. If your CRF is low, it’s likely that your strata fees will be higher to beef it up in case of any shortfall.
4. Upcoming capital projects. Rather than relying on a one time special levy, many strata corporations will elect to increase their strata fees to pay for an upcoming major project such as re-piping, elevator repairs, roof replacement, etc.
5. Legacy contracts. Many strata management companies and councils have maintenance contracts in place for years, and don’t review them on a regular basis. There is a good chance that you’re paying too much for something in your budget. Do some due diligence, and put your contracts out to tender on a regular basis to keep everyone honest!
Looking for ways to reduce your strata fees? Contact our strata management company for some strata management advice!
Chris Stepchuk
Sept 19, 2018
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