Strata condominiums or townhouses are a popular home options with many benefits including providing little personal maintenance, the ability to live in a more populated area, among others.
10 Things you should know about Condo and Townhouse Strata Properties
1. Each Strata lot typically has one vote.
2. You may have a monthly strata fees which will cover common area maintenance, management expenses, maintain the contingency reserve funds minimum requirements and more.
3. Rules will be in place regarding things such as if pets are allowed, where you can park, what can be placed on your patio, if you can rent the unit and more.
4. Rules can be changed. Typically a 3/4 vote in favour of a change will be required.
5. You can be fined if you break the rules.
6. Age restricted properties are more difficult to finance as lenders believe it affects marketability.
7. The Fire Insurance covered by the strata fees is for common property and buildings. Personal belongings are not covered under the Strata’s insurance.
8. For mortgage qualifications half of the strata fees will typically be used in your debt servicing calculations.
9. Unless a 3/4 vote opposes the requirement for a Depreciation Report a Strata’s with 4 or more strata lots is required to have a Depreciation Reports done every 4 years. The report covers all common areas and structures which help determine long term maintenance requirements and costs.
10. Special assessments where you have to pay lump sum amounts may happen if the strata votes for major upgrades or if contingency accounts need to be topped up.
Always best to do your due diligence by reading through the last two years of strata minutes, the depreciation report and analyze the financial reports before you buy a strata unit. Once you have purchased, be proactive in protecting your investment by attending strata meetings or joining the strata council.
Looking to buy a Strata Property? Get started by contacting your local Mortgage Professional at Dominion Lending Centres!