Before making the decision to purchase a strata unit, whether it’s a condo, townhouse or bare land strata, make sure you do your research. If you plan on making the jump to strata ownership, here are 4 key things you need to know what buying a strata unit.
Buying a strata unit
- Does the strata have a Depreciation Report? Legislation now requires that Stratas obtain a Depreciation Report from a qualified company (unless the unit owners vote to defer the report each year at the AGM). This report details each building component such as boilers, windows, roof and so on, their expected lifespan, current condition, and estimated replacement cost. It’s usually a 25 or 30 year look down the road, to assist with budget planning, contingency reserve fund allocations and special assessments. If one is available, read through it and confirm if the Strata plans to follow up on any of the recommendations in the report. If they do, what are the ramifications – timing, financial, construction disruptions and such. If they don’t plan to implement any recommendations or have voted to defer obtaining the report, find out the reasons.
- How much is in the Contingency Reserve Fund? The Contingency Reserve Fund is set aside to pay for capital improvements to the strata complex. Items like roof replacement, parking lot paving or things which are not annually recurring in nature all get paid out of this fund. If it’s low, find out why – did they recently make a large expenditure or do they only make minimal contributions to the fund each year?
- Can you access two years of minutes from monthly council meetings? This usually gives a fairly clear picture of the condition of the strata property and you’ll see if there are any ongoing issues that might be a concern down the road. It might also show if there are problems that seem to go on forever without being resolved. After reading the minutes you’ll have an idea of whether or not the strata is proactive or just lets things slide until they become larger, more costly issues to deal with.
- What does the strata fee cover? For some, it covers everything from hot water, which is especially great if the unit has hot water and in-floor radiant heat, gas, maintenance, landscaping, garbage removal, insurance and so on. Compare the rate against other similar Stratas in the area to see if they are in line, or if they seem too high or too low. If there’s a big discrepancy, see if you can find out why.
If you’re looking at purchasing a strata unit, go into it with as much information as possible before signing on the dotted line. Make sure you read the Bylaws, Rules and Regulations as well because you don’t want to be caught unawares after you move in.
Call Ian Thompson today (250) 751-1223