Ever wondered how developers set strata fees before a new strata building is even built? Good information on just that in a recent Vancouver Sun article. Developers are tasked with estimating monthly strata fees for their future development projects. It might be tempting for developers to make fees appear lower than they are actually likely to be in if gives them a leg up when courting potential buyers. Apparently this is not common practice and developers are subject to strong penalties as a disincentive to underestimating potential strata fees.
I have seen this happen on one occasion but I’m not sure if it was a case of poor accounting skills, outright deceit by the developer or a bit of both. The developer was required to make up the shortfall in the strata fees to cover the first year’s annual budget.
The best way to avoid this scenario as a buyer is to retain the services of a Realtor who can assist with the due diligence and fully investigate an offering for sale.
I welcome any questions you may have about selling or buying.
Feel free to comment here or contact me directly.