If you’re considering a home purchase in Victoria, British Columbia, it’s important to know the difference between buying a property that is Freehold versus one that is a Strata property.
When comparing the two, there are unique characteristics of each that affect both your property’s use and costs of ownership. For now, let’s focus on Stratas.
What is a Strata?
In a Strata, owners own the rights to their particular unit, or Strata Lot, while collectively owning and contributing to the shared common property (such as hallways, common exterior grounds, etc.)
Where are Stratas found?
Apartments, town homes, and condominiums in Victoria are the most common forms of Stratas, but it doesn’t stop there. Even select detached single-family homes can be part of a Strata in what’s known as a Bare Land Strata.
What are Strata fees?
The most noteworthy expense incurred in a Strata that isn’t incurred with a freehold property is Strata fees.
Oftentimes referred to as monthly fees or condos fees, Strata fees serve to (1) cover common expenses shared by each owner, as well as (2) build up the Contingency Reserve Fund (CRF) for larger maintenance and repairs down the road.
Each and every Strata will assess different fees. When looking at condo buildings specifically, this is due to differences in the:
- age of the building
- required repairs and maintenance
- repairs and maintenance already performed
- building’s insurance rate
- common amenities (pool, fitness centre, lounge, etc.)
- inclusions (electricity, hot water, gas, management fees, etc.)
How can a Buyer gauge the current state of a Strata?
There are various resources available for a diligent Buyer to assess the overall “condition” of a Strata and the building, including but not limited to
Strata Council Minutes – a summary of meeting minutes that give insight into past and current issues, changes to the Bylaws, and/or upcoming work.
Depreciation Report – a summary of the building’s physical components and recommended future upgrades.
Strata Bylaws – applicable bylaws that apply to every owner in that Strata, often covering rental and pet restrictions, usage of your Strata lot, and more.
Strata Plan – an overview of the entire building and summary of each Strata lot’s Unit Entitlement. Unit Entitlement determines the monthly condo fees for each unit. In most cases, the larger the unit, the higher the fee.
Buying into a Strata
These are just a few of many considerations when buying into a Strata in Victoria.
If you’d like to learn more about buying into or selling a strata property, feel free to contact Reiner to discuss your next move.