Frequently I hear from prospective buyers the following: "Woodcroft maintenance fees seem too high." When pressed to explain why they feel that way, they point to other Strata complexes where the posted monthly fees are lower. This seems like a good thing. After all, new projects often have very low monthly maintenance fees so the lower fee seems like the right way to go.
All too often, the real answer is NO! I've lost track of how many times I have reviewed the financial statements of a Strata with low monthly fees and found that they have very little money in their Contingency Fund. In addition, many of these complexes have "deferred maintenance" on their common property. This means trouble for owners in upcoming years with special assessments becoming commonplace when they can no longer avoid necessary repairs and updates. There is an expression in the Property Management business that says it all: "low maintenance fees often mean low maintenance."
It's a bit like maintaining your car. Do you value regular servicing to stay ahead of problems or would you rather have your car conked out on the side of the road on a dark and stormy night? You choose.
Woodcroft Estates is one of the best run Strata projects in Metro Vancouver. All six buildings (5 Strata Plans) have completed extensive infrastructure upgrades in the recent past. They have healthy contingency funds compared with other Strata projects. A perfect example is my listing at 710 - 2004 Fullerton. The Form B reports the contingency fund is currently $436,484.73. As a buyer, you inherit part of this fund when you become an owner in this building. When the building embarks on future infrastructure projects, this fund will go a long way to paying for the improvements. Does a healthy contingency fund guarantee that you will never pay a special assessment? No, but it sure helps!
One more thought. Woodcroft maintenance fees also include heat, hot water, light, onsite property management, caretaker, recreation facilities, professional gardeners and 24 hour manned security. When you really compare the value you receive for your monthly maintenance fees, Woodcroft is tough to beat.
So the next time someone suggests that low maintenance fees are a good thing, be suspicious and check "under the hood". You may find that those wonderful low monthly fees are anything but.
© Marc Haslam 2009