Strata properties are a popular housing choice for people in BC. Strata housing can include: condos, townhouses, duplexes, even single family homes in bare land strata corporations. Buying a strata can come with many benefits. Usually, they come at a lower price point, allowing first time buyers a way into the real estate market. They also require low property maintenance; you only have to maintain your own strata lot, the common areas are maintained for you. Other benefits can include: heightened security, sense of community, cost sharing for repairs, and added amenities. Even though strata’s have many obvious benefits, there are a few things you should make sure you look into before you make the final decision to purchase.
Monthly Strata Fees
When living in a strata, you will most likely be required to pay a monthly strata fee. Your monthly strata fee will go towards the common expenses of the strata. It’s important to remember that this is will be an added expense and to budget accordingly.
Depending on the strata, you may also be required to pay a special assessment. Special assessments, where you have to pay lump sum amounts, may happen if the strata votes for major upgrades or if contingency accounts need to be topped up.
You’ll want to determine what you are required to pay towards the strata before you enter into a purchase agreement.
Each strata corporation will have a set of bylaws and rules that can limit what you can do in the common property areas as well as inside your own unit. Some strata’s have restrictions on rentals, pets, the minimum age allowed, and smoking. You may also be restricted on the alterations you can make inside your strata lot. You should carefully review the bylaws and rules to make sure that you can use your strata lot the way you intend to.
Strata corporations are responsible for making sure the bylaws and rules are followed. If a bylaw or rule isn’t followed, it can result in a costly and unwanted fine.
Reviewing the strata minutes is a must do before you enter into a purchase agreement. Even though it may seem like a lot of reading, you and your agent should look at the minutes from the past 2 years. The minutes will give you information as to if there are any issues within the strata, whether or not there are any major repairs that need to be done, and it will give you an insight as to how the strata is run.
In addition to reviewing the minutes, you will also want to take a look at:
- The budget and contingency reserve fund – a portion of your monthly strata fees are set aside in a contingency reserve fund. This fund is used to pay for major maintenance and repairs to the common areas. You want to see if the current contingency fund has enough to cover any upcoming expenses.
- Depreciation Report – this report outlines the condition of the building. It will include the condition of siding, windows, roof, plumbing, heating structure, and systems. It will tell you when these things will need to be repaired or replaced in the future. It’s a great way to find any upcoming costs.
- Form B – This will outline your monthly strata fees, any funds, rental disclosure, parking, storage, and more.
- Engineering Reports (if any)
- Strata Plan
Parking and Storage
If having a parking spot (or two) and extra storage are important to you, make sure you check if these features come with your strata lot. Sometimes these things are not included, or may be included for an additional price.
Strata documents can be overwhelming at times, and lots of people make the mistake of not reading them. Your REALTOR® can help you with reading and understanding these documents. They can quickly point out any red flags or areas that may be of concern. If you’re interested in purchasing a strata lot, but don’t know where to start, ask your REALTOR®. We’re here to help!