Get a free, no obligation personal loan quote with rates as low as 6.99%
Get Started You can apply with no effect to your credit score

If you’re in the process of shopping for a home, you may have come across something called strata fees. Strata fees are most commonly applied in housing communities, such as a condo. As you probably noticed, strata fees are not cheap. They are yet another cost you need to consider and assess when purchasing a property. To understand what strata fees are composed of and how to determine the reasonability of the fees, continue reading below.

Learn about the importance of insuring your condo, click here.

What Are Strata Fees?

When you purchase a property, there are sometimes common areas that can be used by everyone in your building or area. For example, there may be a pool, outdoor areas that need to be maintained, or a concierge service. Naturally, these amenities are not free, they are paid for through something known as strata fees. Strata fees are most often paid monthly and are mandatory and non-negotiable.

What Factors Are Considered When Determining Fees?

A number of factors are considered when the property management of your building or area determines the monthly strata fees. Below are common factors that apply to nearly every property that incurs strata fees.

  • Utilities. Strata fees cover some of the water, heat and hydro, if not all of it. In older buildings, heat may be centralized instead of controlled in each unit. If this is the case, then heat would likely be included in your strata fees. 
  • Size of Building. How large the building you live in will play an important role in how expensive your condo fees are. Generally speaking, larger buildings tend to have lower condo fees because the cost is split among more people. 
  • Reserve Fund. A portion of your condo fees is contributed to a reserve fund every month. A reserve fund is mandatory for every building to have under the Condominium Act in Canada. In the event of an emergency within the building, the reserve fund is used to cover the cost of an unexpected repair.
  • Repairs and Maintenance. Regular repairs and maintenance required for basic operation of your building’s common amenities are always included in your strata fees. A couple of examples include landscaping, snow removal, garbage disposal, and cleaning of common areas. 
  • Available Amenities. The more amenities a building offers, the higher your condo fees will be. Some buildings come with a gym, pool, party rooms, security system, and a valet, all of this is paid for through your strata fees. Your condo fees cover the usage, operation, and upkeep of these amenities. 
  • Building Age. Older buildings tend to cost more to maintain than new buildings. This is because older buildings break down easier and more often than newer buildings do. That being said, new buildings don’t always have the lowest strata fees, it all depends on what else is included in the cost. 
  • Increase in Fees. Strata fees can increase at any point in time by any amount. The building’s board controls the strata fee amount and if they deem that it needs to be changed, they can do so. An increase in strata fees could be for an array of reasons, but be sure to consider this factor when determining the affordability of the place you’d like to live in. 
Cost of Buying a House in Canada
Want to know how much it costs to buy a house in Canada? Check this out.

Are Condo Fees and Strata Fees the Same Thing?

The short answer is yes, condo fees and strata fees are the same thing. However, you can expect to pay this type of fee in a number of common interest developments (CID). A common interest development is defined as any housing area where owners are a part of an association that owns and maintains the common areas.

Many Canadians are turning to CIDs since the cost of an individual, freestanding home is so expensive. Let’s explore the different types of CIDs below which are all subject to strata fees, also known as condo fees.

  • Condominium. With a condo, the homeowner owns their individual unit within a complex. All of the homeowners share interests in the common areas, such as elevators, hallways, patios, parking garages, and lobbies. The common areas are managed and owned by a condo corporation and the owners of units. 
  • Strata. Unless you live in British Columbia, condos and stratas are the exact same thing. In BC, strata refers to apartments that have two or more levels within an apartment community. Despite this minor distinction, the management of a strata and a condo is essentially the exact same. 
  • Co-op Association. A co-op owns a particular property including its facilities and common areas. The residents of the co-op own a share of the co-op association which is a requirement to occupy the unit. The difference between a condo and a co-op is the residents don’t actually own their unit, they merely have a share within the co-op. Once a homeowner has a share in a co-op, they have the right to lease their unit within the community. Shares in a co-op are considered to be an intangible personal property which usually cannot be used as security for financing, unfortunately. 
  • Home Owners Association (HOA). An HOA is a non-profit organization that oversees developments or alterations of shared property. The goal of an HOA is to improve the overall community and related experiences. They generally have more responsibilities and objectives than a regular condominium association. HOAs are composed of homeowners within the housing community and they are actively involved in the maintenance of the shared areas and enforcement of the rules of the community. The HOA owns the common areas of the development and is responsible for charging homeowners their monthly fees. 

What are first time home buyers really worried about? Check out this article

How to Tell If Your Strata Fees Are Too High

To determine if your strata fees are too high, you will first need to assess the age of the building and what is included. Once you know that information, you can gauge how reasonably the fees are for what you are getting. If you’re having trouble gauging the reasonability of the fees, try looking for similar properties and compare the strata fees. If one set of fees is completely different from the other set of fees, that could be a cause for alarm.

What About Strata Fees That Are Too Low?

We all want to pay as little as possible when it comes to our living expenses. If you found a property with low strata fees, you might be marvelling at the great deal you found, but not so fast. Strata fees that are too low can indicate poor management and inadequate building maintenance. The last thing you want is to invest in a building that is not being maintained properly because it could impact the value of your individual unit.

Before you complete your purchase, you might want to hire a realtor or real estate lawyer to assess your strata fees. Not only will they be able to tell you exactly what you’re paying for, but they can also assess the reasonability of the fees and give you a professional opinion.

Do you know what the hidden costs of buying a home are? Find out here.  

Why Strata Fees Aren’t Always a Bad Thing

Knowing that you need to pay strata fees on top of a mortgage and other housing costs can be daunting, frustrating and discouraging. However, strata fees aren’t all bad, in fact, there are actually benefits to paying strata fees. Let’s explore some of these benefits below.

  • Split Costs. The repairs and maintenance and other costs of your building are split among all the residents. If you were to live on your own, you (and only you) would be responsible for these costs which can be pricey.
  • Amenities at Your Disposal. If you want access to a home security system, pool or gym, you will have to pay for it some way or another. If these kinds of amenities are included in your building, the cost is paid for within your strata fees. If you want these amenities while living in a regular home, you would be paying someone else for them. Either way, you will pay someone for these perks.
  • Either You Pay or They Pay. Strata fees mainly pay for repairs and maintenance of your building. If you own your own place without strata fees, you’d be paying and doing the repairs and maintenance on your own. It’s actually beneficial having someone else manage the repairs and maintenance for you.

Are Strata Fees Right for Me?

Living in a community with strata fees has its benefits, but these advantages aren’t always right for everyone. For instance, if you’re a handy individual who is easily capable of repairing and maintaining a property on your own, you may think strata fees are a waste of money. Alternatively, if you don’t want the burden of repairs and maintenance on your hands, then strata fees are worth your while. Whether or not strata fees are right for you all depends on your home buying goals and financial position.

Veronica Ott avatar on Loans Canada
Veronica Ott

Veronica is a writer who specializes in creating unique and educational personal finance content. She has extensive experience writing blog posts for companies in the financial sector. Veronica's background is in accounting as she graduated from Western University in 2017 with a degree in accounting. She is passionate about using her accounting expertise to help others with their personal finance questions and issues and enjoys using her writing to educate Canadian readers. When Veronica is not writing, she enjoys film, reading, travelling, going to the gym, and listening to music.

More From This Author

Special Offers

More From Our Experts
Loans Canada places No. 228 on The Globe and Mail’s fifth-annual ranking of Canada’s Top Growing Companies.

By Caitlin Wood, BA
Published on September 29, 2023

Loans Canada is excited to announce it has made it onto the Globe and Mail’s Top Growing Companies list for the second year in a row.
Finder Awards Finalists: Personal Loans Customer Satisfaction Awards 2023

By Priyanka Correia, BComm

Loans Canada is happy to announce it received the finalist award in the Best Personal Loan Search Platform category.
Beware of Fraudulent Lenders Impersonating Loans Canada

By Caitlin Wood, BA

A note to our clients about fraudulent lending practices and illegal upfront fees.
Do You Qualify For The New Brunswick Disability Benefit?

By Bryan Daly

The Disability Support Program is a personalized service offered to disabled New Brunswick residents to help alleviate related costs.
Alberta Aids To Daily Living (AADL)

By Corrina Murdoch

Many who are eligible for the Alberta Aids to Daily Living program remain unaware of it, despite the assistance it can supply.
GenuTax Review

By Trevor O'Hagan

Discover our GenuTax review: a user-friendly, free Canadian tax software. Perfect for simple filings with step-by-step guidance and CRA certification.
Should You Choose A Short-Term For Your Mortgage In 2024?

By Lisa Rennie

*This post was created in collaboration with Mortgage Maestro. Homeowners with mortgage terms coming due soon could be faced with significantly higher...
HSBC Mortgage Fraud: Has It Affected The Housing Affordability Crisis?

By Maidina Kadeer, BA

Have you heard about the HSBC mortgage fraud? Check out how this complex scam may have affected mortgage prices in Canada.

Recognized As One Of Canada's Top Growing Companies

Loans Canada, the country's original loan comparison platform, is proud to be recognized as one of Canada's fastest growing companies by The Globe and Mail!

Read More

Why choose Loans Canada?

Apply Once &
Get Multiple Offers
Save Time
And Money
Get Your Free
Credit Score
Expert Tips
And Advice

Build Credit For Just $10/Month

With KOHO's prepaid card you can build a better credit score for just $10/month.

Koho Prepaid Credit Card