First-Time-Buyer Friday #3 – Strata Properties
In my continuing series, First-Time-Buyer Fridays, I answer a common question from a first-time buyer. If you have a question to submit, first-time-buyer or experienced investor, put one in the comments below, or fire me an e-mail at Tim@TimAyres.ca.
Q. I hear the terms “strata property,” “strata fee,” and “strata council” all the time when looking through listings and talking to real estate people. What exactly does strata mean?
A. Strata properties are just another type of property ownership. It’s a legal concept for dividing up a large property such as a condominium project into individual units that individual owners can own. Typically, a strata property will be either a condominium, townhouse, or bareland strata.
When you buy a strata property, you become a member of that project’s strata corporation, along with the other owners in the building. The strata corporation elects a strata council, which makes decisions and handles things like by-law enforcement, record-keeping, paying the common bills, and so on. Strata corporations are operated much the same as non-profit societies in this way.
A strata property is divided up into three types of property. There is the strata lot (SL), which is the unit that an individual can own; the actual townhouse or condo. There is common property (CP), which each owner in the strata corporation owns a proportion of, depending on the size of their strata lots. This would include things like the driveway, exterior of the building including the roof and exterior walls, hallways, elevators, and so on. Basically everything outside of the interior walls of the condo or townhouse. Finally, there is limited common property (LCP), which is common property designated for the exclusive use of an individual unit. For example, balconies are almost always LCP, and a parking space for a unit will often be LCP, especially in older stratas.
Strata fees are charged to each owner to cover the common expenses like heating the common areas, cleaning, maintenance, water, sewer, insurance, and so on. Strata owners are responsible to pay the strata fees (usually, once a month) levied to their strata lot. The amount each owner pays varies depending on their unit entitlement. Unit entitlement is a fancy way of saying the size of their strata lot in proportion to the other lots in the building or complex. So, the bigger in square footage you go, the more you can expect to pay in strata fees compared to smaller units in the same complex. Strata fees really to vary from property to property in Victoria and Sooke. I would budget about $200-$275 for a two-bedroom condo, and $100-$150 for a one-bedroom. I’ve rarely seen a monthly strata fee over $300 for either a townhouse or condo in Victoria or Sooke.
When buying into a strata corporation, you will be given the opportunity to read over records of all the meetings, letters, and financial statements from the last couple of years. You will also have a chance to read over the by-laws, to make sure they fit with your lifestyle. Many condominiums in Fairfield, for example, do not allow pets. Several others have an age by-law which restricts the units to those aged 19, 55, or even 65 and over. Some complexes allow rentals, and some do not, which is something to keep in mind, also.
All of this discussion about stratas has pushed me to start writing a new section on this blog focusing on strata issues. So, now we’ll have FTB Fridays, and Strata Saturdays Mondays (sorry, can’t guarantee writing on a Saturday!). For detailed information about British Columbia’s Strata Property Act, have a look at the Government of BC Website.
Thanks for reading! If you have any questions on buying your first or fiftieth home, I’d be happy to help. Call me any time direct at 250-885-0512 or e-mail me at Tim@TimAyres.ca.
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