Line Up and Bid Up Your Condo Purchase to.... Pay Your Neighbours Utility Bills! «

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Line Up and Bid Up Your Condo Purchase to.... Pay Your Neighbours Utility Bills!

(8 posts) (4 voices)

Started 1 year ago by Strataman
Latest reply from jesse

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Strataman
Member

Part of my business is doing energy/utility audits for strata's sinking under large utility bills. The funnest part is properties that have a commercial strata or business attached physically to a residential strata.
In all cases the main services, hydro,gas, steam, and City water and sewer are often billed in whole or in part to the residential strata. The developer always sets it up this way because the developer often maintains ownership of the commercial strata lots while leasing long term to various commercial clients, such as Urban Fare, Costco, Hotel(s), Impark, and various other commercial interests.
When my audit is finished the shock from Residential Strata s' who discover that they have been paying some one else s' utility consumption is fun to watch.

Once caught out the commercial strata will try to share the costs on a sq.ft division. Needless to say this is also a scam as restaurants, stores like Urban Fare, Costco use substantially more of "the common area" utilities per sq.ft, then a residential strata.Most combination strata s are weighted heavily in favor of the attached Commercial Strata. To actually solve this problem the residential strata has to manage all the utilities like they are a service provider. They have to pay for and install sub-meters where possible, pay for consultants such as myself to construct legally binding contracts,and generally fight fo recovering costs spent on SOMEBODY ELSE'S PROPERTY.

I have NEVER found a declaration in the strata titles that indicate the fact that services are supplying OTHER properties. The City of Vancouver refuses to discuss the issue.As all strata developments are signed off by the developers architects and engineers, no impartial inspection is ever done until exorbitant costs bring the strata to a consultants door. I have also never found a building inspector that does condo purchase inspections even slightly aware of this.Property managers are gradually becoming aware of this.

Tip: Buy only into single strata developments like one strata on ONE piece of land. Multiple RESIDENTIAL strata have the same problem. (Spectrum is three residential strata lots for instance).
Have a good weekend!

Posted 1 year ago #
jesse
Member

So you're saying that the utilities are not typically divided fairly along usage? How is this amended?

Posted 1 year ago #
The Ant
Member

So this would be for common area utilities, like hall lights, etc right? And that would be rolled into strata fees, but you're saying that they can also roll the utilities used by attached commercial space into the strata fees?!? Does that mean that peoples condo fees are going to keep the fridges running in an attached grocery store or the heat lamps going in a restaurant?

If that's true it boggles the mind.

"I see debt people"

Posted 1 year ago #
Strataman
Member

In most cases it is common areas like hallways and whole levels of underground parking. In almost all cases the residential strata pays for the water/ used in the commercial strata lot.
It works like this; there is a commercial strata that leases out airspace and heat to say a restaurant or other commercial enterprise. Included in this lease is water, sewer, heat, and heated hot water, fire protection and security systems. This often 9/10 times supplied by the residential systems by being "tagged" on to the end of their systems.The actual commercial unit (for example Starbucks) is paying for the services to the owner of the airspace (usually the developer or a subsidiary of the developer)but they do not own those services or pay for the maintenance of those services, In affect they are selling a service that they do not supply.
Worse the residential strata does not know they are supplying this service.

We have found natural gas services flowing thru residential meters, we have NEVER found a commercial strata with their own City of Vancouver water service (residential always pays for this)(I know of a major hotel that does not have a water hookup to the city), we have found large air handlers, pumps and scads of parking lighting all running thru residential power meters. Circuits for commercial use are often tapped off the nearest residential load center. The interior electric supply of the unit usually has a private hydro service, thus you are not paying for the fridge in the unit, however when you see that big dishwasher running you are supplying the hot water and the commercial tenant is supplying the power for the pumps and the airspace owner is LAUGHING!
The scam is perpetrated by the owner of the air space not the tenants.

Posted 1 year ago #
Strataman
Member

To give you an idea on the kind off money involved:
$25,000.00 +- per year over 6 years. Four first years paid 4 X $25,000.00 of other strata s consumption. Water and Sewer charges only.Could not recover original loses. Threatened to terminate services to get agreement.

$18,000.00 Natural Gas savings per year from restaurant that had hooked into residential strata for 4 YEARS.Threatened to terminate service in 14 days after discovery.

Not small potatoes.

Posted 1 year ago #
Mark Downs
Member

Ouch.

In a 200 unit building that would work out to be more than $100 per unit.

How would someone find out about this kind of setup if they were shopping for a condo? Doesn't the strata council generally know what they're paying for from the residential strata fees?

Posted 1 year ago #
Strataman
Member

Hi Mark; Generally a new strata get an invoice from the utility. They have no idea really if that is a normal bill, they will compare it to their last bills and being new to the whole strata thing they will assume the invoice is reasonable.
If their property manager is very experienced they will have a cost per unit average for utilities. Most property managers don't know what an average cost is. Ask them this
How much does an average unit in down town, Richmond, etc consume and pay for:
Water/Sewer
Common Area Utilities like Hydro cost per unit.
Natural Gas with Fireplace/Without Fire Place.
Hot Water

I suspect you will get a blank stare from 90% of Property Managers.

Generally strata councils have no idea if someone is bleeding their systems, remember I am only talking about either mixed stratas physically connected[u] either multiple residential or commercial/ residential.

How do you find out? Ask this: What is the average cost for (fill in the blanks... water hydro, gas etc) for common areas and strata supplied services and what is OUR/YOUR cost.This would be the per unit cost. You have a 150 unit strata how much per unit? What is the average in the area? Larger stratas should be cheaper.

I suspect nobody will/can tell you. Maintenance fees INCLUDE utility costs. DON'T assume they are the same. A half empty building should use about 38% less utilities then the same building full.Look at the building and what is attached to it. Is it full? Is the per unit cost real or temporary until the building fills?

The strata will never tell you if they are paying someone else s bill(property values would plummet), just look and steer clear of mixed strata s, or residential/commercial connected units.

Posted 1 year ago #
jesse
Member

It sounds like a number of stratas have figured out how to deal with these situations once they're made aware of them. It certainly highlights one of the unexpected risks one takes when purchasing property in a strata.

Posted 1 year ago #

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