A court case unfolding in Victoria, B.C. could set future precedent around whether stratas can charge owners for mandatory service fees. The strata corporation for a condo building in the city’s James Bay neighbourhood is suing a Victoria woman who inherited a condo from her mother and is refusing to pay $1,500 per month for meals, cleaning and other services she does not receive, reports the Times Colonist. The building is run as an independent retirement home.
Yvette Craig says she’s stayed current on property taxes and strata fees for the unit, but questions whether the Strata Property Act allows stratas to require owners to pay for services beyond general building maintenance and maintenance of the common areas.
Craig also says she has not been able to sell her mother’s condo due to the attached service fees. A brother and sister who inherited a unit in the same building from their mother ultimately wound up paying $25,000 for services not received and ultimately sold the unit back to the management company for $130,000, less than half of Greater Victoria’s median sale price for condos.
This case will likely clarify whether stratas can charge for additional service fees or whether those services must be operated as a separate, stand-alone business. And while this case applies to a building that’s designed for retirees and run by a corporation (not individual strata owners), it also brings to light some of the potential issues that can accompany other condo purchases.
- Special assessments: The extra service fees described above are a monthly cost, but special assessments for building maintenance can run into the tens of thousands of dollars and catch owners off guard. If you’re considering buying a unit in a strata building that has a depreciation report prepared, you should request a copy and review the report (or have your real estate lawyer help you review it) before moving forward. Even if the strata doesn’t have a depreciation report, review the strata minutes and find out the size of the building’s contingency fund. If the strata lacks a healthy contingency fund, consider setting aside extra money in anticipation of a potential special assessment in the future.
- Bylaws: In the situation described above, the chairman of the strata council claimed that owners signed a contract agreeing to the extra service fees, while the adult children who inherited the units said their parents may not have understood the service-agreement they were signing (Craig says her mother never signed agreeing to that). Building bylaws can cover a variety of issues such as noise, pets, use of common areas, parking and grills, so be sure to read the strata’s bylaws thoroughly and ask your real estate attorney to clarify anything you’re unsure about. It’s much easier to walk away from a condo and its strict bylaws than to battle bylaws you deem unlawful in court.