Strata council will have to save more for the future. (Ron Cogswell/Flickr)

Strata council will have to save more for the future. (Ron Cogswell/Flickr)

Opinion: Penny-pinching Victoria stratas now forced to save for the future. Thank goodness

New rules introduced to force stratas to boost contingency funds

I have sat on strata councils for two of the apartments I have owned in the past and both experiences took years off of my life.

Both were dominated by senior citizens who had a lot of time to focus on this position because they were retired. These folks meant well, but I noticed that they spent most of their time worrying about who made too much noise and not enough planning for the future of the buildings.

I don’t think this was a coincidence.

Why would you worry about the fate the building in 30 years when you were 75 years old?

I’ve heard this complaint from other people over the years as the older folks on the strata councils worked furiously to keep strata fees at a rock-bottom level by not spending on upkeep or the contingency fund.

That cheap attitude has led many stratas to find themselves unable to financially deal with problems that come up as their buildings age.

To be clear, it’s not just older folks (for the record, I’m 54 and will be a senior soon), but others who are more focused on low strata fees than on the future.

Now all of those cheap people will be forced to spend more on the future as the Province of BC announced changes on Tuesday.

Strata corporations in B.C. are required to have a contingency reserve fund (CRF) to pay for infrequent common expenses, such as maintenance work and emergencies. These new rules will increase the minimum amount that developers and strata corporations are required to contribute to a CRF, from 5 per cent to at least 10 per cent of the annual operating expenses every year. These changes will take effect on Nov. 1, 2023.

So, basically, the province is going to save stratas from themselves – the government even said some stratas are “neglecting” maintenance needs and risking higher insurance costs.

“People living in stratas deserve to have peace of mind that their strata corporation has appropriate reserves to do routine maintenance and keep strata insurance costs down,” said Ravi Kahlon, Minister of Housing. “The overwhelming majority of stratas are doing just that, but a small number of strata corporations that are underfunding their contingency funds and putting owners at risk of surprise fee hikes and higher insurance costs.”

Developers are required to include a CRF contribution in a new building’s interim budget, which under these changes will need to be equal to at least 10% of the operating expenses. This will prevent developers from advertising unrealistically low strata fees to prospective buyers.

There will, of course, be an outcry but the government is doing the right thing.

Chris Campbell is an editor with Black Press Media at the Victoria news hub of newspapers. You can follow him on Twitter @shinebox44.

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