How to Raise Strata Fees Fairly in BC

Understanding Strata Fees in BC

Strata fees are essential for maintaining the common property of a strata corporation. They cover expenses such as maintenance, insurance, and utilities. In British Columbia, raising strata fees is a necessary part of managing a strata corporation effectively, especially when facing rising costs or unexpected repairs.

Why Might Strata Fees Need to Be Increased?

There are several reasons a strata corporation might consider raising fees:

• Increased operational costs: Inflation and rising service costs can affect your budget.
• Major repairs or renovations: Unexpected repairs may require additional funding.
• Building reserve funds: Ensuring adequate funds for future maintenance or emergencies is crucial.

How to Raise Strata Fees Fairly

Raising strata fees requires careful consideration and transparency. Here’s a step-by-step approach:

1. Assess the Current Financial Situation

• Review the current budget and determine if the existing fees cover the necessary expenses.
• Analyze the Strata Contingency Reserve Fund (CRF): A Complete Guide to understand your financial health.

2. Prepare a Detailed Budget

• Create a budget that outlines all anticipated expenses for the upcoming year.
• Include maintenance, utilities, insurance, and contributions to the contingency reserve fund. The CRF contribution is not discretionary: strata corporations and sections must budget a minimum annual contribution of 10% of the total budgeted operating fund. That floor is often what forces a fee increase in the first place.

3. Communicate with Owners

• Inform strata owners of the need for an increase.
• Provide clear reasons and data to support your proposal, ensuring transparency.

4. Hold a General Meeting

• Schedule a general meeting to discuss the proposed fee increase.
• Give at least two weeks' written notice of the meeting, as section 45 of the Strata Property Act requires (BC Laws, Part 4). Watch how you send it: under section 61, notice that is mailed or left with an occupant is deemed given four days after you send it, so a council mailing exactly 14 days ahead has given late notice. Build in the extra four days, or deliver by email to owners who have agreed to receive notice that way.

5. Vote on the Increase

• A majority vote approves the budget, and the budget is what sets strata fees — owners do not vote on a fee increase as a separate question. If the budget is defeated, section 104 sets out what happens next: the strata corporation must prepare a new budget and put it to a special general meeting within 30 days (or a longer period approved by a 3/4 vote at the meeting), and until that new budget passes, owners continue paying the same monthly fees they paid under the previous budget. Once the budget is approved, section 106 requires the strata corporation to inform owners of their new fee within two weeks. Sections 103 to 106 are in Part 6 of the Act (BC Laws).
• Ensure that all owners understand how their contributions are calculated based on unit entitlement.

FAQs about Raising Strata Fees

Q: How often can strata fees be increased?
A: Strata fees change whenever a new budget is approved, which is normally once a year at the annual general meeting. It is not strictly an annual-only event: a budget can also be approved at a special general meeting, which is exactly what section 104 requires when the budget is defeated at the AGM.

Q: What happens if owners disagree with the fee increase?
A: Owners can voice their concerns during the general meeting. If the budget is defeated, section 104 requires the strata corporation to prepare a new budget and bring it to a special general meeting within 30 days (or a longer period approved by a 3/4 vote at that meeting). Owners keep paying their existing monthly fees until the new budget is approved, so the strata is not left without income — but spending is restricted in the meantime. A special levy is a different tool, not a substitute for a budget, and it carries a higher bar: section 108 requires a 3/4 vote (BC Laws, Part 6). For more on this, see our article on Strata Special Levies in BC: A Council's Guide.

Best Practices for Fair Fee Increases

• Transparency: Always provide owners with detailed financial information.
• Regular Reviews: Reassess fees annually to ensure they align with actual costs.
• Utilize Technology: Consider using software like ManageStrata to streamline budgeting and financial reporting.
• Engage Owners: Encourage owner participation in budget discussions to foster a sense of community and collective responsibility.

Conclusion

Raising strata fees in BC is a necessary process that must be handled with care and transparency. Proper communication with owners and adherence to legal requirements will help ensure a fair and smooth transition. For a deeper understanding of how strata fees work, check out our article on How Strata Fees Work in BC.

For more insights, consider using SearchStrata for AI analysis of your strata documents.

This article is general information about BC strata law, not legal advice; verify against the current Strata Property Act / Regulation or a strata lawyer.