Potential buyer thinks strata fees are too high
I am thinking of buying a condo but at the one I like the owner is paying what I think are very high strata fees. If I buy the condo, do I inherit the strata fees or can I renegotiate them with the strata?
Auntie’s answer: I’m afraid you are stuck in this instance. I ran your question by a local realtor knowledgeable about all things strata-related and probably found out more than most people need to know. But I am happy to pass on the information.
To start with, strata fees are usually set by the governing executive committee that comprises a group of owners elected by all the owners. Their mandate is to represent the interests of the strata.
The committee annually reviews the fees, which are adjusted as needed based on the next year’s budget, and both are presented for approval at the annual general meeting.
Stratas are run as non-profit organisations and the fees are set to cover the operating and maintenance costs of the property.
And all that leads to the salient point for you: Strata fees therefore cannot be renegotiated individually. If you decide to buy the condo and feel the fees are too high, you can ask for a breakdown of the expenses to decide if the cost is acceptable based on provided amenities and services, such as security, landscaping, a pool, gym or tennis court. The fee is calculated on a per-square-foot-basis, so if the units are different sizes, the smaller the condo, the lower the amount charged.
But while all that will give you more information, it won’t get your fees reduced.
Category: Ask Auntie, Real Estate Questions
What I find obsurd is that Strata fees are usually a Per Square Foot Cost if you live at a property that has various different unit sizes e.g. 1, 2 and 3 bedroom units.
While I understand this from an insurance perspective how can other costs such as gardening, pool maintenance etc. be more for someone who owns a 3 bedroom than someone that owns a smaller unit.
This is because the 5 people living in your 3 bedroom unit are creating more wear and tear on the common areas than the couple living in a 1 bedroom unit.
Strata fees don’t cover whats in the apartment, only outside,etc doors, windows, roof ac units. If your ac unit leaks inside you are responsible. if your closets break you are responsible, water heaters, appliances all on you not the strata. I have always thought that someone is lining their pockets with the strata
You need to investigate the strata fees for that group carefully. Is property & casualty insurance included (a VERY expensive proposition here!)? Is the current owner (or others in the strata in arrears of their strata dues? What other expenses, such as pool, exercise gym, tennis court, etc. are included, and are they in need of upgrading soon? In general I have found that the strata fees for condo ownership in Cayman are about equivalent to the normal mortgage payments for a similar property in the US or other large country! These fees will never go down, and “extraordinary assessments” are only one emergency away.
Buyer beware!
If you are too cheap for the fees then move on.
Pay close attention to see if the insurance is included in the strata!!!!!!!! My agent told me it was included. Bought the place without budgeting for that. Costs me an additional $3000+ every year.
Thanks ReMax
Some strata fees are high to cover the cost of owners who are NOT paying their fees, so you could always buy the condo and join that deadbeat group. You should also check if the owner of the unit you wish to purchase is up-to-date on his strata fees as you will inherit that obligation when you buy. At some stage the deadbeat group usually have to sell their condo to cover the cost of the accumulated strata fees, but it is a long and painful process for the rest of the owners who have to support them until that day.
Isn’t there a clause in the Strata By-Laws that allows if strata fees are in arrears constantly and for any length of time and the owner is not making the effort to bring it up to date then the Condo Executive is empowerd the the Strata Executive to re-possess the unit.
11.18Am You are so wrong!!!! Where do you get your information from???
Please research before you talk/write such stupidity.
No new owner ever inherits the previous owner bill. I hope you are not a Realtor because you do not know how a strata is managed, and maybe if you are a realtor you should acquaint yourself with the by laws.
The prospective condo’ owner should also know that their condominium ownership gives them the right to decorate the interior of their condo’ … that’s it. If they are having trouble now with strata fee’s , it wont bode well once ownership ensues. Nor will the next hurricane strike.