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How much are condo strata fees?


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#61 MarkoJ

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Posted 09 January 2014 - 09:03 PM

Can you elaborate on this?

 

Let's say you are reading strata documents and you, the buyer, find out the building will need a new roof next year that will cost approximately $100,000 and there a 20 units.  The contingency fund is only $25,000 and the entire $100,000 will be raised via special assessment and the unit entitlement of the unit you are interested in is 1/20.  

 

You are a first time buyer and you cannot afford $5,000 out of pocket next year so you negotiate for $5,000, funded by the seller, to be held in trust by the seller's or buyer's lawyer to be released when the special assessment is due.  You could have provisions for the actual cost being below/above the $5,000.  

 

When contracts get complicated like above best to consult a lawyer to help with the specific wording.

 

Very few sellers would accept such an arrangement.  You are more likely to see it where a seller has had previous deals collapse over upcoming expenses.


Edited by MarkoJ, 09 January 2014 - 09:09 PM.

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www.MarkoJuras.com - MLS® from $899 and $1,000 cash back for buyers | www.834sales.com & www.promontoryforsale.com - Building(s) specialist 

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#62 Mike K.

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Posted 09 January 2014 - 09:33 PM

Thanks, Marko. That's a great piece of negotiating leverage.


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#63 Nparker

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Posted 09 January 2014 - 09:53 PM

In a previous property that I owned, there was a special levy raised to cover the costs of a potential litigation against the original builder, city etc. for damages resulting from premature building envelope failure. After quite a number of years the strata (owners) determined that the chance of success in such litigation would be minimal and it was decided to return the litigation funds back to the owners. In the intervening time I had sold my townhouse, but it had been written into the sales contract that any funds either won or returned from the litigation would come back to me as the owner who put up the money in the first place. The new owner had nothing to lose and in the end I got my money back. I am not sure how common such arrangements are, but it didn't seem to be especially complicated to make this provision in the sales contract or to get the buyer to agree to it.



#64 MarkoJ

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Posted 10 January 2014 - 08:16 AM

In a previous property that I owned, there was a special levy raised to cover the costs of a potential litigation against the original builder, city etc. for damages resulting from premature building envelope failure. After quite a number of years the strata (owners) determined that the chance of success in such litigation would be minimal and it was decided to return the litigation funds back to the owners. In the intervening time I had sold my townhouse, but it had been written into the sales contract that any funds either won or returned from the litigation would come back to me as the owner who put up the money in the first place. The new owner had nothing to lose and in the end I got my money back. I am not sure how common such arrangements are, but it didn't seem to be especially complicated to make this provision in the sales contract or to get the buyer to agree to it.

 

A bit of a different scenario.  As you noted, the buyer had nothing to lose and neither did you.  It gets more complicated when the buyer has something to lose (upcoming expense), the seller is being asked to concede (pay for the upcoming expense) and there is uncertainty in regards to exactly how much the upcoming expense will be.


Marko Juras, REALTOR® & Associate Broker | Gold MLS® 2011-2018 | Fair Realty

www.MarkoJuras.com - MLS® from $899 and $1,000 cash back for buyers | www.834sales.com & www.promontoryforsale.com - Building(s) specialist 

Looking at Condo Pre-Sales in Victoria? Save Thousands!

 

 


#65 Nparker

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Posted 10 January 2014 - 08:53 AM

A bit of a different scenario...

Oh I realize that. I only relayed this story to show that all sorts of things can be built into a real estate transaction.



 



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