Maintenance Fees: A Dilemma

The automatic thought regarding maintenance (strata) fees in a building when buyers are looking to purchase a condo is: The lower the strata fees, the better.

But before you jump into a conclusion, there are a few things to consider:

1) Make sure you find out what is included in the strata fees. Is natural gas included for example? Do you have a gas fireplace which heats up the whole house, thus cutting down on your hydro bill?

2) Understand where the strata fees are going in the building. Is the money going towards maintenance and upkeep of the building, or towards repairs? If the building is maintained very well, then it is likely that you will not be asked to pay for special assessments very often or not at all.

3) What is the insurance on the building? The maintenance fees pay for the insurance on the building so make sure you understand what is covered under the insurance. How much is the deductible? The owners are responsible for the deductible which does not come out of the maintenance fees. 

4) How much is there in the Contingency Reserve Fund (CRF)? This fund is used to pay for some of the long term repairs on the building, like painting after 10 years or resealing the windows. A portion of the strata fees go towards this fund.

So the next time you feel like the strata fees of a condo are too high, look more closely and make sure this doesn't cost you more in the long run. And vice versa, if they're too low, make sure your investment is protected by way of regular maintenance.