We're pretty sure everyone knows what a strata is. But how about a bare-land strata? Are you aware of the number of new developments in the CRD that are using this method of gaining permits? And it's not just in Langford.
Essentially a bare-land strata works just the same as any other strata corporation. There are individual assets (your home) and there are shared assets (streets, sewer, water, power lines and street lamps). Some bare-land strata corporations also own golf courses, marinas and other recreation facilities. Some are upscale and have amenities to attract luxury buyers, but a growing glut of these bare-land strata's are being developed and targeted to low-end buyer segments.
When the municipal council grants developers permits to put in communities (I define a community as places like Sun River Estates, Citation Village etc) the biggest concern for the municipality is the cost in servicing these new areas of town. The municipality wants to increase its tax base (largest taxpayers are local business, not residential) and wants to keep its costs under control. So how do they do this?
Enter the bare-land strata. The province created this 'corporation' some time ago. Municipalities are taking advantage of it to pass on the costs of what we would normally consider community services paid through property taxes onto the strata owners. Consider this: you buy a house in Citation Village for $400K. You're getting a brand new home, it's pretty nice, it's pretty big compared to what that money buys you elsewhere and the community is new. Lots are real small though, but that's less lawn to mow anyway so no big deal. You have to pay a strata fee of $85/month, but that's less than the average condo fee by almost half, so again, seems like a great deal.
Are you aware though that when the winds hit and the lampposts come down that it's the strata that pays? Or when the rains come and the inevitable potholes appear, again it's the strata that pays. Now these would be relatively minor costs for the strata corporation to bare, but what about ten years from now when the roads need to be re-paved completely? Normally, the city takes care of it. Not in your bare-land strata though. Instead, it's like a condo roof has to be replaced and the strata corp either saves up for it, or if the strata isn't run in a proactive manner (and it's easy for strata's to be managed in less-than proactive ways) the bill gets divided up and passed onto the homeowners. I'm not positive on the CRD cases, but I've read about bare-land strata's that are responsible for their own fire departments. I can't imagine that being the case here though.
You still pay the same rates of property taxes as your neighbours who aren't part of the bare-land strata.
I know that I'm not painting a very good picture of the situation. And I also know that I don't have all the information. So please feel free to chime in with your thoughts and corrections. Does anyone own one of these or know of someone who does?
We walked through a home in a bare-land strata about 1.5 months ago. It was nice and big. It had a suite downstairs and parking for one car. If you wanted more than one car you had to park in the common parking two blocks away. There was no on-street parking as the streets are too narrow. We were actually pretty impressed with the home. It needed some work to complete it, but we figured we could get that as part of the offer, or knock $15K off the price to get the work done ourselves. The risks of the strata scared us off though.
With more and more of these bare-land strata's being developed and municipal councils seeming to favour this style of development over others, it's safe to assume that first-time buyers like ourselves may have to go this route to get into a home. We'd love to hear your thoughts on this issue. Are we reading too much into it? Should we just accept this is a new reality in the RE market and budget accordingly? Or should these bare-land strata's be avoided at all costs?