When is comes to living in a strata building, it’s really up to you as an owner to pick your poison. You can either choose to have low strata fees and not beef up your contingency reserve fund, or you can choose to have slightly higher strata fees and build up a healthy balance in your CRF.
Which is better; low strata fees, and special levies, or higher strata fees and no levies?
Our opinion as a Vancouver strata management company is that it’s better to have slightly higher strata fees and a healthy CRF balance. Think of it like building up your retirement account. It’s much easier to take 10% of your paycheque each and every month and stuff it into an RRSP or savings account, then to come up with a huge bulk sum at the end of the year, isn’t it? You will never notice a few hundred dollars, will you?
Gone are the days when strata lot sellers could fleece buyers with ultra-low strata fees. With most strata buildings now having depreciation reports completed, this has really opened up the eyes of condo buyers out there. When they go to buy, the CRF balance on the Form B needs to look something like what is required on the depreciation report, or there are going to be issues selling the property.
To summarize, it’s our opinion that it’s better to have slightly higher strata fees and a healthy contingency reserve than it is to have extremely low condo fees, but the argument could certainly be made from a marketing perspective, it’s better to have low fees. When we see ultra low strata fees and notes of multiple special levies in the strata minutes, this is an indicator of a poorly management strata corporation. It’s like a company continually doing cash calls to their investors.
Looking for some strata management assistance? Please reach out to our property management company here!