Monday, March 21, 2011
When buying real estate in BC it is important to look at how much the strata fees are, as they can range from low to high and can include different benefits such as heat or hot water. Not all buildings have strata fees. A strata title building is a multi-residence complex or multi-suite building, where all the units are owned by their individual owners.
What are strata fees?
Strata fees are basically the monthly fees collected from each owner, usually in proportion of the square footage of the units, or which are calculated in accordance with the requirements of the Strata Property Act. The strata fees for a strata lot's share of the contribution to the operating fund and contingency reserve fund are calculated as follows: unit entitlement of the strata lot, divided by total unit entitlements of all strata lots, multiplied by the total contributions and then divided by 12. The expenditure is administered by the strata council. The strata council sets the budget for the year, with a breakdown of costs.
Strata fees cover ongoing costs and general maintenance (hallway cleaning, lights, security, insurance) and contingency funds accumulated for large expenses, like re-roofing, snow clearing or parking lot paving.
There are two concepts here that often get confused: the strata council and the strata corporation.
The Strata Council:
The strata council’s role is to:
The Act states that the strata council’s role is to: “exercise the powers and perform the duties of the strata corporation, including the enforcement of bylaws and rules”.The strata council can hire a strata manager to perform some or most of the functions of the strata council. However, if a strata council has delegated its powers to a strata manager, the strata council is still ultimately responsible for ensuring that its obligations under the Act are fulfilled.
The Financial Institutions Commission (FICOM) strata council guide.
Strata Corporation: The strata corporation is a legal entity with all of the powers of a natural person who has full capacity. This means that it can sue others, be sued by others, enter into contracts with others and hire employees.
The owners of the strata lots are the members of the strata corporation. The strata corporation is responsible for managing and maintaining the common property and assets of the strata development for the benefit of all of its owners.The specific obligations of the strata corporation are usually performed by the strata council, or agents or employees which it hires.Additionally, the strata council will also perform its own obligations which are imposed by the Act and Regulations on the strata council, and will benefit the strata corporation.
The Financial Institutions Commission (FICOM) strata corporation guide.
What if I don’t pay my strata fees?
If an owner fails to pay their strata fees they are contravening the strata corporation’s bylaws and are subject to fines. The Strata Property Act requires a strata to give two weeks written notice demanding payment and noting that further action may be taken. This further action can be in the form of suing, seeking arbitration or putting a lien against the owner’s strata lot.
Kristy Mattiazzo, REALTOR®, ABR®,SRES®, CCSP™