To Strata or not to Strata… Have you ever wondered if it’s the right fit for you?
Buying a home can be a confusing process, with so many options to choose from, its hard to know what is going to be a good fit for you. One of the first things you will need to decide on is whether you are looking for a freehold or strata property. There are a few key points to consider when making this choice.
- How much control do you want? Strata’s are run by a Board of Directors and governed by a long list of Bylaws. These bylaws control the use of the property (among other things) including inside your own home like pets, rentals, smoking and what is allowed on your exterior walls and windows.
- Maintenance: The common areas (lawns, hallways, safety systems etc.) of Strata properties are maintained by contractors and generally do not require much upkeep from the owners.
- Easily budgeted for: Each Strata will have monthly strata fees for each unit to pay. This is a set amount that will usually include your water, sewer and garbage usage along with the maintenance.
- Each unit is responsible for the whole building: This one has pros and cons, the nice things about this is that if the roof needs to be redone it is the responsibility of a whole complex to share the cost instead of one individual person and capital expenditures like a roof should be paid by the Contingency Reserve Fund (“CRF”). The scary things about this fact is that if there is not enough money in the CRF then the Strata can put out a special assessment (basically a cash call) to all owners to make up the difference.
If you are thinking that a Strata might be a good fit for you the most important thing you can do is research. Making sure to pick the right Strata for you can make all the difference! You want to read through the meeting minutes from the Strata Meetings and any past AGM’s, looking for things like repairs coming up, legal cases, deficiencies, upcoming bylaw changes and in general any complaints that owners may be bringing up. You also want to check the financials to ensure the Operating Fund and Contingency Reserve Fund are all properly funded. You can check the Reserve Fund Study to see what is suggested to be available to cover the planned repairs/replacements in the future.
It is a lot of information and the best way to decide is to talk it over with your Real Estate Professional and get some advice that fits your specific situation.