User Fees for Stratas

“You know you will have to pay it all – You will pay today or pay tomorrow”

Your Gold Teeth by Steely Dan

CAN A STRATA CHARGE A USER FEE?

A Strata may charge a User Fee for the use of the Common Property and common assets. A User Fee is different from a Strata Fee (Strata Fees are described in this article). Whereas Strata Fees must be paid by all Owners, a User Fee offers a means to recover costs selectively from certain Owners on the basis of use.

HOW IS A USER FEE CREATED?

A User Fee may only be created by bylaw or ratified rule.

A User Fee in a bylaw means the Strata’s bylaws provide that a set amount is charged for the use of Common Property and common assets. As a bylaw, the User Fee will have been approved by a 3/4 vote of the Owners at a general meeting.

A User Fee can also be in the form of a ratified rule. A ratified rule is a rule that has been approved by a majority vote of the Owners at a general meeting. The Council is not free to simply impose a User Fee by rule without input from the Owners. The Owners must also ratify the rule. We have an article describing in more detail Strata rules.

DOES THE EXACT AMOUNT OF THE USER FEE NEED TO BE SPECIFIED?

A User Fee, whether it is set out in a bylaw or rule, must clearly state the amount and frequency of payment. A User Fee cannot be calculated using some unknown formula or payable at some unknown frequency.

It is important to recognize that a User Fee is not a contract. A User Fee is different from a contract as the adoption of a User Fee does not involve all the requirements of a contract. We have an article explaining how contracts are created.

DO USER FEES NEED TO BE REASONABLE?

A User Fee must be objectively reasonable.

There is no single criteria for determining whether a User Fee is reasonable. The reasonableness of a User Fee should be assessed by looking at:

• The user’s rate of consumption,

• The number of users,

• The duration of use,

• The Strata’s operating costs,

• The Strata’s repair and maintenance costs.

Stratas must be prepared to defend and justify User Fees. An unreasonable User Fee does not become reasonable simply because it has been approved by the Owners. It is possible that a User Fee would be ultra vires the authority of the Strata if it is unreasonable. We discuss the limits on the power of a Strata through the Strata Property Act in another article.

WHAT ARE SOME COMMON USER FEES? 

User Fees are best used to recover the cost of operating and maintaining certain Common Property and common assets from those Owners who use that Common Property or common asset.

User Fees are common for:

• Tenant move-in / move-out,

• Fitness room use,

• Amenity room rentals,

• Guest suite rentals.

A User Fee is appropriate for a fitness room as that room is likely only used by a fraction of the Owners. The cost to maintain the fitness room can then be recovered from the Owners who use the fitness room. This, in turn, relieves those Owners who do not use the fitness room from having to contribute with Strata Fees towards its maintenance.

A User Fee should not be used for managing costs that are more properly shared by all Owners. Gardening and landscaping costs, for instance, are dealt with on the basis of Strata Fees as those costs benefit all Owners. We have an article on understanding Strata Fees.

WHAT HAPPENS IF YOU FAIL TO PAY A USER FEE?

The failure to pay a User Fee may result in the suspension of certain rights to use Common Property or common assets until the outstanding User Fee is paid. The failure may also result in a fine for the breach of a bylaw or rule.

Unlike Strata Fees and Special Levies, an unpaid User Fee cannot be registered against the title to a Strata Lot as a lien. We have another article that addresses filing a lien and when a Strata can impose a lien for debts that are owed by an Owner.

USER FEES ARE HOW A STRATA RECOVERS THE COSTS OF PROVIDING SERVICES TO A GROUP OF OWNERS

A User Fee is a means to recover costs selectively from certain Owners on the basis of use. Those Owners who use that Common Property or common asset are shouldered with the costs so that Strata Fees can be reduced.

A User Fee must be approved by the Owners in the form of a bylaw or ratified rule and it must be reasonable. The failure to pay a User Fee may result in a loss of privileges or fines.