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