Strata Tip of the Week - Are These Strata Fees High?

A common question we hear from buyers is: “Are these strata fees high?” At first glance, it might seem like a straightforward question, but the answer isn’t always simple. Whether strata fees are “high” depends on what they include and what you’re comparing them to.

If you’ve read our previous email titled “The Risks Associated with Low Strata Fees”, you’ll know that some strata corporations prioritize keeping fees low in the short term, which can lead to higher costs for owners down the road.

While lower fees might seem more appealing at first, higher strata fees aren’t always a bad thing and might still result in a lower overall cost of ownership.

So what kind of factors impact a strata corporation’s strata fees?

1. More Components, More Costs

A strata’s fees may be higher if it has more shared amenities and infrastructure to maintain.

For example, a small 20-unit townhouse complex with minimal common property will generally have lower fees than a high-rise condo with:

• A pool, hot tub, sauna, and gym

• Elevators and underground parking

• Landscaped courtyards and fountains

• On-site security or concierge services

The more amenities and services a strata corporation maintains, the higher its strata fees are likely to be.

That’s why comparing strata fees across different buildings isn’t always straightforward. What you’re paying for may be vastly different.

2. What’s Included in Your Fees?

Strata fees don’t just cover maintenance, they may also include utilities or services that reduce your personal expenses.

For example, in some buildings:

• Natural gas for fireplaces is included, while in others, owners pay for gas separately.

• Water and hot water may be covered, or each unit may have separate utility meters or hot water tanks.

• Caretaking, security, or concierge services may be included in some buildings but not others.

A strata with more services will likely have higher fees, but this doesn’t necessarily mean owners are paying more overall. Sometimes, a building with higher strata fees provides better value when factoring in included costs.

3. Older Buildings Often Have Higher Maintenance Costs

While not always the case, older buildings may require more frequent maintenance, which can lead to higher strata fees. Some examples include:

• Plumbing repairs – Older pipes and fixtures may need more frequent servicing or replacement.

• Door hardware maintenance – Common area door closers, locks, and handles are likely to wear over time, needing more maintenance.

• Mechanical system upkeep – Aging HVAC systems, ventilation fans, and sump pumps often require more frequent servicing.

• Elevator maintenance – Older elevators tend to need more repairs and regular adjustments.

In contrast, newer buildings generally have fewer maintenance costs, at least in the early years. However, while a newer building may have lower strata fees initially, buyers should also consider the total cost of ownership. Newer units often come with higher purchase prices, so the savings on strata fees may be offset by the higher price you’re paying for the unit itself.

4. Higher Strata Fees May Mean Fewer Special Levies

Another key consideration is how strata fees impact future special levies. Take two identical buildings:

• Building A charges lower strata fees but contributes only the minimum required to its Contingency Reserve Fund (CRF), meaning owners may face higher special levies in the future.

• Building B charges higher strata fees but contributes more to its CRF, reducing the likelihood of special levies.

Neither approach is right or wrong, and each has its pros and cons. However, buyers should consider not only monthly strata fees but also the likelihood of special levies in the future.

That’s why at Condo Clear, we provide buyers with a custom projection of the special levies they are likely to face over the next 10 years, based on:

• The strata’s current CRF savings

• The strata’s annual CRF contributions

• Anticipated future expenses from the strata’s depreciation report

This helps buyers get a clearer picture of the true cost of ownership beyond just monthly strata fees.

To Sum It Up

These are just a few of the factors that impact strata fees. As we hope it’s now clear, it’s important to not only look at the monthly strata fee amount but also consider:

• What’s included in the strata fees

• The full cost of ownership (including potential special levies)

• The financial planning approach of the strata you’re considering buying into

Strata fees are just one piece of the puzzle. Looking at the bigger picture will help buyers make a more informed decision on whether they think a specific strata corporation is the right one for them.

That’s it for this week. If you have any suggestions for other topics you’d like us to cover, please let us know at info@condoclear.ca.