What Does a Strata Fee Include?

Every month a strata fee is paid by each strata lot owner to cover budgeted common expenses of the strata corporation. Much like any corporation - there are many operating and maintenance costs. Those costs are divided up amongst owners through unit entitlement. Larger units will pay a higher proportion of shared costs, as unit entitlement is based on habitable square footage of each unit. 

In buildings that are mixed use it is common to see strata corporations sectioned into residential, commercial and joint sections. In a sectioned strata there will be different fees and operating budgets allocated to each section. 

For example, a commercial unit might not have access to the common property gym for the residential section of the building. Therefore, the commercial strata fee may not go towards its upkeep and repair. Sectioning a building ensures that each section is only paying for the costs associated with their use and enjoyment of areas they are entitled to access. However, every strata building is different and it is important to read the bylaws to see how that building is set up to share costs between each section. 

When reviewing the strata documents for a building, the latest annual budget will be included. This document gives a full breakdown of all costs the strata corporation or the sections face throughout the year.

Common expenses typically covered by the strata include:

• Property management fees

• Common property maintenance 

• Strata insurance

• Caretaker

• Janitorial services

• Gardening

• Exterior window cleaning

• Water & sewage

• Common area electricity and utilities

• Fire alarm monitoring

• Legal & professional fees

• Garbage disposal and recycling

• Sometimes gas & air conditioning costs for each unit

In addition to regular operating expenses, 25% of the operating budget should go into the CRF (contingency reserve fund). The CRF is the “savings account” for the building. Some strata corporations will allocate a higher percentage to the CRF to build up the fund for expensive special projects (ex. re-piping, roof replacement, or membrane). Generally, the more money sitting in the CRF, the lower the amount of potential special assessments. A healthy bank account for the strata corporation means less strain on owners when a special project becomes due. 

What is not typically included in my strata fee?

• Electricity inside unit

• A/C & heating, depending on building

• Homeowners insurance

• Cable, internet, home phone, security monitoring

• Upkeep of any LCP (limited common property) if you have exclusive use of a back or front yard that you are required to maintain as per strata bylaws

It’s important to fully review all strata documents including bylaws and the operating budget prior to purchasing a stratified property. Bylaws will outline what the strata corporation is responsible for maintaining and what sections can be held responsible for. Form B(s) will indicate the total CRF(s). All of that info combined will provide you with an outlook on how the strata corporation functions and plans for the future. 

To recap: Your strata fees pay for maintaining and operating the building as a whole throughout the year. A portion of the strata fee also gets contributed to the CRF or the “savings account” for the building. You are responsible for the upkeep of your own unit and the strata is responsible for maintaining common areas that all residents can enjoy. In general, you can expect strata fees to increase on a yearly basis. An increase to strata fees generally comes from the approval of a new operating budget that must be voted on at an AGM or SGM, vetted by a 3/4 owners vote.