High Strata Fees vs Low Strata Fees

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What You Need to Know About Strata Fees

Every building has different strata fees, though the purpose of these fees is the same – to pay for the maintenance and monthly expenses incurred by the building. I’m here to tell you what the difference is between buildings with high fees and low fees, and why you shouldn’t dismiss buildings with high fees.

The amount of the strata fees are calculated based on the building’s yearly budget, which is determined by the Strata Council and approved by Owners at the AGM. Budget items include regular maintenance, heat and electricity for the common areas, Strata Management fees, gardening, upkeep of the amenities, etc. To give you some examples: buildings without an elevator will save some money on regular elevator maintenance and future repairs which will lower strata fees, buildings that are self managed will save money on management fees, and buildings that decide to put a lot of money into the Contingency fund will have a higher budget for that item than buildings who aren’t focused on saving as much. There are a number of other factors that come into play, and each one has its own pros and cons.

After the yearly budget is prepared and approved, your strata fees are calculated based on your unit entitlement (found on the Strata Plan) which is the size of your unit compared to the size of all other units. For example, the biggest unit in the complex will have the highest strata fees. A unit double the size of another will pay double the strata fees.

The Yearly Budget and Financials Statements are two documents you’ll get to review if you look over the Strata Documents for the building. This blog post is only one example of why having an agent who can understand the documents is really important in your home search.

I find a lot of Buyers balk at a building with high fees before they understand why that’s the case. Here are some reasons why a building may have higher strata fees (than you’d want), and why it’s not a bad thing!

  • A higher sqft compared to other units you’re considering! A 900sqft unit will likely (though not certainly) have lower Strata fees than a 1200sqft unit, so keep in mind the size of unit compared to the fees when you’re viewing different units.


  • A small number of units in the building: If the building is boutique, there are fewer people to split the costs of managing the building and covering monthly expenses. Overall, the cost to manage a small building will be less than a larger building, but certain expenses may still be high. For example, a 20 unit building with an elevator means owners will pay a higher share of the elevator costs than a 60 unit building with an elevator. Boutique buildings have their own benefits and certain cost saving opportunities. For example, they are typically self managed and are more simple to maintain. I suggest you weigh the pros and cons and get a feel for how the building is managed.


  • How much the building wants to put towards their Contingency Fund every month: Every building will contribute a small portion of monthly strata fees to the Contingency Fund, but some buildings decide to increase that amount to ensure the building has more money set aside for unavoidable maintenance. There is another Strata document you may know about – The Depreciation Report – which became popular a few years ago. The whole purpose of this Depreciation Report is to ensure Owners know what maintenance the building will need and how much it will cost over time. The last section in the report always presents 3 different scenarios: Low Strata Fees and High Special Assessments, an Increase in Strata Fees and some Special Assessments, and High Strata Fees to Avoid Special Assessments. No building in the city will choose the High Strata fees route because it’s too high for people to manage. However, a lot of buildings do take to heart the idea that raising strata fees will ensure the building has money for projects when they need it, which is a good idea if you ask me. Far too many building’s are unprepared for the future, so a strong Contingency Fund is what I want to see, and you get there with higher strata fees.

At the end of the day, I am certainly not dismayed when I see a building with high strata fees, but I always want to know the full story. That story comes from the strata documents and knowledge on how other buildings operate and what works best.

Let me know if you have any questions or comments!