Examples of Potential User Fee Implementation Plans
for KPMG Audit and Advisory Services
Initial User Fees
- go through all the strata records from January 1, 2003 forward and add up the history of extra costs associated with the existence of exclusive use or exclusive benefit areas beyond the limited common property, including the costs for:
* demolition, removal, reconstruction, painting, and maintenance of deck and garage additions
* additional snow removal
* additional liability and fire insurance coverage
* additional professional fees, including lawyers, engineers, and painters - add cost estimates for:
* reinstatement of the originally planted landscaping
* administration, interest rates, accounting, and write-offs
* mediation and dispute resolution fees - apply the Monthly User Fee formula set out below to the total
- divide that result by the number of months since January 1, 2003
- multiply that result by the number of months since January 1, 2003 that an owner has owned a unit with exclusive use or benefits
- calculate and apply any offsetting adjustments to harmonize the difference between the corresponding strata fees 3-bedroom owners with strata plan decks and 2-bedroom owners with extra decks previously paid
- apply a formula similar to unit entitlement formula in section 246 but modified to apportion the costs corresponding to the owners of each strata lot's respective areas of exclusive use or exclusive benefit of common property or common assets
- notify owners of their estimated Initial User Fee
- allow 60 days for owners to select from 2 payment options: lump sum or monthly with interest; and give 90 days to make payment
- designate half the Initial User Fees for a Contingency Fund to cover Opting Out Provisions
- designate the other half to replenish the special levy funds for the landscaping budget
Opting Out Provisions
- recognize that there may be owners who decide that exclusive use and benefit of common property costs more than it is worth, or more than they can afford
- adopt a bylaw so that after the 90-day period expires any privileges granted in association with exclusive use or benefit of common property or common assets by an owner of a strata lot with unpaid User Fees shall be void or prohibited. Require full payment and 75% owner approval prior to granting any new exclusive use privileges, or any change in the use of common property from shared to exclusive, or any change in appearance that replaces originally planted landscape with any kind of construction
- after the 90-day opting out period expires the strata corporation has 60 days to demolish any unfunded exclusive use property and must restore the common property back to the originally planted landscape during the next spring or fall
- estimate the costs for the demolition and removal of any construction on the relevant common property and reinstatement of its originally planted landscaping
- designate half the Initial User Fees to fund up to half the Opting Out estimate
- address the remainder in the annual budget
Monthly User Fees
- add up the measurements of all limited common property balconies, patios, and decks from the strata records registered in the land title office
- measure the actual exclusive use or exclusive benefit areas of the common property, including driveways and added construction of decks and garages
- subtract the areas of limited common property on the strata plan from the total exclusive use or exclusive benefit areas of the common property
- evaluate the remaining space at standard rental rates for equivalent storage and parking
- add all the extra costs associated with the existence of exclusive use or exclusive benefit areas exceeding the registered limited common property, including Initial User Fees and Opting Out costs
- divide the total in paragraph 6 by 120 to estimate a 10-year monthly average
- average the amounts from paragraphs 4 and 6 to calculate the monthly fees
- calculate any offsetting adjustments for 3-bedroom owners with strata plan decks who own and pay for a 25% greater share of the common property and assets than 2-bedroom owners with extra decks
- apply a formula similar to unit entitlement formula in section 246 but modified to apportion the costs corresponding to the owners of each strata lot's respective areas of exclusive use or exclusive benefit of common property or common assets
- commence collection after 90 days' notice
- designate half the funds from Monthly User Fees for general revenue in lieu of rent for the exclusive use of common property
- designate the remainder to fund the extra costs associated with allowing, reinstating, or maintaining common assets that exist or were eliminated for strata lots with exclusive use or benefit
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Benefits of User Fees
We think the implementation and collection of reasonable User Fees would:
- promote the best use of common property
- offer an economic analysis of cost to benefit ratios
- prevent unfair allocation of funds
- improve maintenance standards
- restore quality and pride
- raise property values
- provide factual data for informed decision making
This should be detailed; but not difficult.
My Deck blog details breaks down some of the factual data.
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Please understand that about 25% of strata lots have taken about twice their share of the common property and have generated highly disproportionate expenses, with nothing to stop it.
Please note that the corresponding costs of needed repairs were more, a lot more, than double the costs of others, some 10 times more.
Please note that the corresponding costs of needed repairs were more, a lot more, than double the costs of others, some 10 times more.
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This strata corporation needs User Fees to fund the extra costs associated with granting privileges for the exclusive of use of common property and assets to accommodate extra decks for the exclusive benefit of a minority of owners. Without them it is pretty much obvious to us that we can never expect to see or benefit from transparent accounting practices or stop a history of corruption and unfair allocation of funds.
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We are not accountants.
But if the Treasurer is not interested in this job
We volunteer - If our help will be accepted.
We believe it is the right thing to do.
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Where there is a will; There is a way.
Mr Mac has proven it many times.
Other owners must prove it also.
