Protecting Millions in Assets: SPABC Members
Strata Managers’ Compensation Falls Behind — Why it Matters
The British Columbia condominium industry is extensive, with more than 31,000 strata corporations comprising almost 1,000,000 individual units and more than $180 billion of property value. Annual funds administered by these strata corporations total more than $4.2 billion. They consist of more than $3 billion in Operating Funds and another $1.2 billion in Contingency Reserve Trust Funds.
Every day, strata corporations spend millions of dollars in B.C., while real estate sales of condos contribute hundreds of thousands in property transfer taxes. Regardless, compensation to those who manage these increasingly complex corporations hasn’t risen in almost 20 years.
Licensed strata managers maintain financial and business records, manage thousands of trust accounts and financial transactions. They also prepare extensive documentation that forms part of sales agreements.
Strata managers are governed by the Strata Property Act. This Act, established in 2000, is currently under review by the provincial government. In the intervening 20 years, the responsibilities of managing strata corporations have increased substantially, both in terms of required record keeping and financial transactions.
Today’s strata management firms are exposed to ever increasing risk through rising property values, aging strata buildings and fees that haven’t changed much from almost 20 years ago. To put things in perspective, the average price of a one-bedroom condo in Vancouver was $200,000 in 2000. In 2018, it was $687,000. Couple that with financial transactions and bookkeeping for building upgrades, remediations, and more complex sales documentation.
Of note, Information Certificates (known as Strata Form B), which are normally requested for condo sales agreements and re-mortgaging applications, are billable at $35. Since 2000, there are many more fields and financial entries to complete, reflecting the increased financial transaction for upgrades to aging properties, inflation and improved reserve planning. What was once a fairly routine task now requires extensive research and additional documentation. Significant time and effort also goes into completion of the Certificate of Payment (Form F), for which we are only able to bill $15.
These technical forms require a significant amount of time and work, often by multiple staff members of the management firm. Furthermore, the allowable compensation does not adequately contemplate the work required or liability incurred. Forms and technical documents of far less comparable complexity in other areas such as the engineering and legal professions result in appropriate compensation, which easily reaches hundreds of dollars.
Strata Property Agents of BC is the professional association for strata corporation managers in our province. We are calling upon Carole James, Minister of Finance and Selina Robinson, Minister of Municipal Affairs & Housing, to approve fee increases for completion of Forms B and F to ensure the continued financial viability of our members’ businesses and to protect the interests of condominium owners in BC.
Millions in condominium assets are at risk without standards in place for management compensation.
Andrew Seaton, President
Strata Property Agents of BC