Condos and townhomes are growing in popularity so it’s important to understand what strata fees include.
Condos and townhomes are not only the top home choices for first-time buyers but are a great option for empty nesters and professionals. Proximity to amenities makes them perfect choices for a wide range of buyers. They also require little-to-no maintenance – potentially a great combo for fresh homebuyers who may not want to take on the potential work inherent with a traditional Kelowna home. But with condos and townhomes come something extra – strata fees! Scary words if you ask most. What are then even for? Strata fees are, at the very least, misunderstood. Fortunately, it’s not nearly as scary as you may think. Let’s take a look at exactly what strata fees are and what they include.
How are Strata Fees calculated?
Every condo owner pays a pre-set, monthly fee. The amount is based essentially on the size of your unit (square footage), and generally does not take into account deck space or parking spaces. For instance, we recently sold a Kelowna penthouse which had a 1,100 sq ft rooftop patio – and the owner doesn’t pay any more in strata than someone with a 200 sq ft deck.
As far as what constitutes the actual monthly amount, factors are divided into three main categories:
- Utilities and Insurance
- Common Area Maintenance
- Reserve Fund.
Strata Fees: Utilities
The condo fee goes to utilities such as water, sewer, common area heat and A/C, and sometimes heat in the individual units. Many new Kelowna condominiums are built with individual heat pumps that are controlled and paid for by individual owners. As in detached Kelowna homes, there are many ways to heat and cool your condo, so make sure you’re clear on your strata fees before you buy. Inclusions like heat & A/C can have substantial impacts on the strata fee, so when perusing Realtor.ca or looking over listings sent by one of our QVA agents, be cognizant of too-high or too-low strata fees – as the old saying goes, when something is too good (or bad) to be true…
Rule of thumb: generally you’ll be responsible for your own electricity and cable, and all other utilities will be covered by the strata fee. Bonus: strata corporations are required to hold insurance policies, including fire, etc for the entire building, so by default your insurance is covered by the strata fee as well.
Strata Fees: Common Area Maintenance
We’ve already mentioned that condo ownership means fewer hours on the roof and mowing the lawn. But somebody’s got to do it, right? Fortunately, all maintenance and repair of common areas is covered by the strata fee. They also cover snow and garbage removal, cleaning of common areas, exterior window washing, parkade cleaning, and so on.
Overall, the more amenities your Kelowna development has, the higher the fees will be. Think pool, gym, and sports courts. For this reason, some people, who know they will never use a glamorous pool deck, may choose to move to a development with fewer amenities, and a lower strata fee.
Strata Fees: Reserve Fund
Finally, a portion of your condo fee is set aside in the Reserve Fund. Every condo board must maintain as large savings account for big-ticket items that inevitably arise as a building ages, with the aim of avoiding extra expenses for the unit owners if something expensive does arise – roof & window replacement or re-paving the main driveway for instance. In the case of an inadequate reserve fund, the strata board may elect to collect a Special Assessment. These are generally reserved for a surprise or unknown issues which require immediate repair. Each condo owner will be responsible for a portion of the repair, generally in line with the square footage of their unit. This may sound like a good reason never to own a condo, but remember that owning any home will result in a surprise bill here and there. Hot water tanks don’t last forever!
So there you have it. Make sure you incorporate the condo fee into your budget. Also, make sure to leave a buffer in case your condo fees increase. Any increases are at the discretion of the condo board. Be sure to attend every meeting and vote on the important stuff.
If you are looking for strata homes in Kelowna, contact the team at Quincy Vrecko and Associates. They will guide you through the process of purchasing a home in Kelowna. They will make sure your investment in a condo or townhouse will benefit you for the years to come. Read the top reasons why you should work with Quincy Vrecko and Associates on your next purchase.