Condo maintenance and strata fees: what’s included?
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by Richard Morrison
- June 29, 2022
- News
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Your monthly mortgage payment and purchase price are only part of the equation when you buy a condo. Your monthly expenses could be significantly increased depending on how big the building is.
The maintenance fees for a condominium building include snow removal, trash pickup, and common areas cleaning. They also cover certain amenities and property management. Lastly, they cover some utilities.
Although most condo buildings cover these expenses, you may find that you’ll have to pay more if your condo is older than those built in newer buildings. The maintenance fees for a condo building vary depending on the size of the unit and the amenities offered. Higher-end buildings usually have upscale amenities and more expensive monthly fees.
There are many other items included in the condo maintenance fees for your condo complex. Read more below as we explain.
Are you unfamiliar with this term? The monthly condo corporation maintenance fee in Metro Vancouver is calculated based on how big your unit is. These monthly costs covers everything, from cleaning carpets to servicing AC units. Everyone shares in the maintenance costs, just as if you’ve owned a home. The strata fees are determined by the Condo Board.
Table of Contents showQuick Takeaway
In British Columbia, the strata fees for condominiums usually include different expenditures for taking care of the building and shared areas. Generally speaking, these fees cover the costs of running your building such as insurance premiums, utilities (water, heat), garbage removal, landscaping and common area upkeep, management services and repairs to any shared facilities like elevators or parking areas. Operating fund costs may involve regular utilities, periodic landscaping, weekly cleaning, minor servicing, and strata property. The amount can depend on the size of the condo and the amenities present, but it generally lies between $0.30 and $1.00 for every square foot in the Greater Vancouver region.
Typical Inclusions in Average Strata Fees in Vancouver, BC
You may ask what is included in the average strata fees in BC and strata fees in Vancouver? Condo fees are usually based on the square footage of the unit. However, the cost per square feet can vary between buildings. The price per square foot will vary depending on the building’s amenities and age. Foot could cost as little as $0.30 per square foot. Ft., or as high at $1.00 per square. For example, the average monthly maintenance fee for condo apartments in Vancouver or the west part is $0.30 to $0.75/sq. Maintenance fees for a condo measuring 600 square feet could be between $360 and $450 per month. Some condos in North Vancouver are also in the same category. In case you didn’t know, condo fees are paid monthly, not yearly.
This monthly mandatory average condo fee covers utilities (such garbage collection and water), building insurance, maintenance of common areas such as hallways, swimming pools, front desks, landscaping, and the reserve fund.
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Items Covered with the condo fees
Condo fees can be divided into three categories: utilities and common areas, as well as the reserve fund. Let’s have a closer look.
However, a portion of your condo fees goes towards utilities like water, heat and hydro. New condominiums have individual heat pumps, which are owned and controlled by the owners. Before you purchase, make sure you are fully informed about your condo fees.
Remember those wonderful amenities that you and your friends can use? They are your responsibility. Your condo fees will go up if you have more amenities. You can think pool, gym, hobby room, sports courts and an in-house theatre. There are also outdoor and indoor areas. You’ll have to ask yourself if you will actually use the amenities in your condo.
Condo unit fees can also be used to pay for snow, garbage, and cleaning of common areas.
As a savings account, a portion of your condo fees is put aside in a reserve bank. This fund must be maintained by every condo board. This fund is vital as a roof replacement can be expensive.
A status certificate will also indicate if there are any “special assessments”, which are significant expenses that are not included in the regular budget.
Property Management
The maintenance fees condo residents pay monthly will cover both the maintenance of indoor and outdoor common areas, as well as property management, staff and some utilities.
These are not the only costs that condo buildings have to face – sometimes there are unexpected expenses and other additional expenses like a roof repair.
The age of your condo building is also important. Older buildings are often more expensive than newer ones.
These aren’t all the costs that a condo building must bear – there are other minor items like garbage removal which you dont have with single-family houses.
The age of your condo building is also important. Older buildings are often more expensive than newer ones.
Determining Who Sets Monthly Maintenance Fees
The condo association or strata corporation is responsible for maintaining the community and building. The association is made up of condo owners. It meets to discuss projects and improvements. The monthly maintenance fee is paid by condominium owners to the association.
This money is used to cover the expenses. A reserve fund is also maintained by the association to cover unexpected costs. By paying the monthly condo fee, condo owners are able to save money which can be used for regular repairs, major repair, unexpected repairs like a lawsuit requiring the use of a real estate lawyer and other amenities or repairing common spaces.
Apart from the monthly mortgage payment, there is an additional cost to owning an apartment/condo – and sometimes home owners do face potential increase of these fees.
Apart from the monthly mortgage payment, there is an additional cost to owning an apartment/condo.
Understanding the Calculation of Condominium Fees
Condo fees are calculated on the assessed value for each unit within the building. If your condo’s value is less than 7%, you will be charged 7% of common costs.
In the declaration of coownership, each unit’s value is stated as a percentage or fraction. This value is determined by many factors, including the square footage of the unit and its location in the building. A 1,000 sq. A 1,000 sq.ft. condo located on the top floor with a great view of the park will be more valuable than a condo located on the first floor with a parking lot view.
Expenses Not Covered by Strata Fees
The downside to owning an apartment/condo is that you are responsible for any damages or repairs that may occur in your unit. Condo owners would be responsible for any damage to their units if the tile floor falls apart. Renters, on the other hand, would not be required to pay as the landlord would cover the cost – assuming the damage was not the renter’s.
Condo owners could be left with large bills for roof repairs or flood restoration because the buildings reserve fund does not always cover these costly maintenance jobs.
Property taxes are not usually included in MLS listings.
Special Assessments
Condo fees do not usually cover special assessments.
You will need to pay special assessments. Understanding the reserve fund health is crucial in order to make informed purchasing decisions.
Debunking Condo Fee Myths
Condo Buyers are most likely to be reluctant to pay condo fees or maintenance fees. Condo fee is often misunderstood and misinterpreted.
Condo fee is not the only thing that can be used to benefit from living in a condominium.
Condo fees and maintenance fees may seem like an additional monthly expense to some, but it is not true when you consider the many benefits you get in return.
Are condo fees higher in larger buildings?
Sometimes, not always. Many buildings with multiple units benefit from the economies-of-scale principle. This means that amenities costs are spread across many apartments. This is why larger buildings that have many amenities often have a lower maintenance cost than smaller ones with fewer amenities.
Condo fees for condo townhouses include roof, windows and outside structure. Condominium apartments have higher fees, but the fees are much lower than those for condominium apartments.
Comparing Condos and Freeholds: What About Maintenance Fees?
Think about how much freehold property owners could spend if they paid someone to do the above tasks. My freehold clients pay $500-$1,000 annually for snow removal, lawn maintenance, etc.
Condos don’t have to worry about major repairs in the future if the reserve fund is managed well. This is 10% of monthly condo fees that is set aside for reserve fund. You won’t have to spend a lot of money on roof replacements, window replacements, etc.
Some readers may argue that they would prefer to pay $80,000-$100,000. (only if they can secure a mortgage approval on an additional amount) to purchase a similar freehold property. They will also be able to get the mortgage amount with their bank. A loan of hundred thousand dollars can be converted to monthly mortgage payments equal to $473 per months (25-year amortized loan, 3.0% rate).
A freehold home is more appealing because it offers a variety of floor plans; it’s an excellent move-up option for people who are looking for a new home, but don’t want to live in a single-family home.
The former allows you to live in peace and enjoy all the benefits of condo living without worrying. The latter will require you to pay a higher monthly mortgage, which will make banks richer, as well as extra money for your roof, driveway, landscape, deck, A/C furnace replacement/ repair, and other expenses.
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Frequently Asked Questions
What Are The Consequences If Strata Fees Are Not Paid?
It is often theorized that strata fees have no consequences if left unpaid. However, this theory could not be farther from the truth. As a real estate agent, I can tell you first-hand that there are indeed some serious penalties for late payment of strata fees or leaving them completely unpaid.
If strata fees are not paid on time, they will usually incur additional late charges and interest rates. Furthermore, owners who do not pay their strata fee arrears may be subject to legal action by the Strata Corporation which could result in fines or liens placed against the owner’s title. This means that until all outstanding payments are made, an owner won’t be able to sell their property as the lien would need to be cleared before ownership transfer can take place.
Therefore it’s important for condo owners to stay up-to-date with their strata fee payments in order to avoid any potential negative repercussions associated with unpaid fees. Property owners should also remember that while these consequences might sound daunting, many Strata Corporations offer flexible payment plans and options so make sure to reach out if needed!
How Often Are Strata Fees Due?
Strata fees are usually paid each month by owners; however, keep in mind that if there is an increase or decrease in cost from one period to another, then adjustments must be made accordingly. It’s also important that all parties understand their responsibilities as they relate to paying their respective dues when it comes time to settle up. As a real estate agent, I always strive to ensure my clients have a clear understanding of how often they’ll need to make payments so that any surprises down the road can be avoided!
Are Strata Fees Tax Deductible?
Strata fee deductions may be available depending on your individual circumstances. Generally speaking, if you use the unit primarily for residential purposes then these fees do not qualify as a deduction against rental income for tax purposes. When filing taxes, it’s important to keep track of any expenses related to maintaining and managing the property – from minor repairs to insurance premiums or legal bills – in order to maximize potential deductions. Here’s what else you need to know:
- Strata fees paid by landlords are considered operating expenses which can help reduce taxable income;
- Condo maintenance fees may also be eligible for deductions depending upon its purpose;
- Property owners should ensure that their records accurately reflect how much money was spent on strata fees each year;
- Repairs and improvement made to rental properties can often be added onto the original purchase price when calculating capital gains tax;
- Owners must have receipts readily available at time of filing taxes in order to substantiate their claims.
What Is The Difference Between Condo Maintenance Fees And Strata Fees?
Strata fees cover all common areas such as landscaping, exterior building maintenance, insurance premiums, management services, snow removal, garbage disposal, water/sewer bills etc. These expenses must be shared equally among all owners in accordance with their unit entitlement which is established by the Strata Property Act. Generally speaking, they are tax deductible if used for repairs or regular upkeep on your property.
Condo maintenance fees vary from complex to complex but typically include items like utilities (heat & electricity), janitorial services or cleaning staff salaries and administration charges related to managing the building operations. They may also include recreational facilities such as swimming pools or gyms that some complexes provide. Maintenance costs can go up depending on how many amenities there are within a particular development so it’s best to check with local real estate agents before making a purchase decision.
Conclusion
As a real estate agent, I know that condo maintenance fees and strata fees can be confusing. It’s important to understand the differences between them as well as when they are due.
If you’re worried about not being able to pay your strata fees on time, don’t worry! There are always options available such as negotiating with the board or seeking financial assistance. Failing to make payments could have serious consequences so it’s best to stay on top of things!
At the end of the day, condo maintenance fees and strata fees are here to serve an important purpose – keeping our condos safe and up-to-date for years to come! So if you ever find yourself facing any questions related to these topics, give me a call; I’d be more than happy to help out in any way I can.
Ready to turn your real estate dreams into reality? Contact Richard Morrison, Vancouver’s top realtor with 20+ years of experience. As a Medallion Club member and RE/MAX Hall of Fame award winning agent, he’s the expert you need on your side. Whether buying, selling, or investing, Richard’s personalized approach and deep market insights ensure a successful transaction. Reach out to Richard today at (778) 900-2235 and make your real estate journey seamless and rewarding.
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