Buying & SellingJuly 9, 2026 · 6 min read

Beware the Developer's First-Year Strata Budget in BC

New-construction strata fees start with the developer's optimistic first-year budget. Here's why they often jump after handover — and how to check before you buy.

When you buy in a brand-new building, the strata fees quoted in the sales materials come from a developer's first-year budget — an estimate the developer prepared before a single owner had moved in, and before the building had run through even one full winter. It is often the most optimistic number you will ever see attached to that unit. Understanding why is one of the most valuable things a new-construction buyer in BC can do.

What a developer's first-year budget actually is

Before a developer can market and sell units, they have to put together a disclosure package that includes an interim operating budget — their best guess at what it will cost to run the building in its first fiscal period. That budget sets the strata fees you see on the price sheet.

Here's the catch: the developer writes it. They are also trying to sell every unit in the building, and low monthly fees make units easier to sell. There is no operating history to check the estimate against, no track record of what the elevator contract really costs, no record of a bad-weather year. The number is a forecast made by the party with the strongest reason to keep it low.

That doesn't make it fraud — most estimates are made in good faith and within the rules. But it does make the first-year budget a starting point, not a promise. Read what strata fees actually cover in BC so you know which line items should be there in the first place.

Where first-year budgets tend to run light

A few line items are underestimated again and again in new buildings:

Contingency reserve fund (CRF) contributions. A new strata still has to start saving for future repairs. First-year budgets sometimes fund the reserve at the bare minimum, which looks fine on day one and painful a few years later. BC's contingency reserve fund rules set a floor, and a thin reserve is one of the clearest warning signs — see how much a BC strata's contingency fund should be.
Insurance. Strata insurance premiums in BC have moved a great deal in recent years, and a budget drafted well before the building's first policy renewal can lag reality quickly.
Utilities and shared services. Heating, water, and common-area power for a fully occupied building cost more than a half-full building in its first months. Amenities like a pool, gym, or guest suite may not have run long enough to show their true cost.
Management and contracts. Landscaping, elevator servicing, cleaning, and management fees are often quoted at introductory rates that step up at renewal.

Individually these gaps look small. Together they are why the second or third budget can look very different from the first.

What happens when the developer hands over control

New stratas don't stay under developer control. Under the Strata Property Act, once enough units have been sold and conveyed, the developer must call the first annual general meeting and hand governance to the owners — the people now living there. (The exact trigger and timing are set by the Act and have been adjusted over the years, so confirm the current rule.)

That first owner-run AGM is where reality arrives. The new council, often working with a professional manager for the first time, builds a budget from actual invoices instead of pre-sale estimates. When the earlier numbers were optimistic, this is the moment fees jump — sometimes modestly, sometimes sharply. If a big-ticket item was missed entirely, owners can face a special levy on top. Our guide to what happens when a strata goes over budget explains why that budget meeting matters so much.

How to pressure-test the budget before you buy

You can't force a developer to raise their estimate, but you can go in with eyes open:

Read the disclosure statement and interim budget line by line. Ask what CRF contribution is built in and whether major contracts are at introductory rates.
Compare to real buildings. Line the quoted fee up against average strata fees in Metro Vancouver for a comparable building. A fee that looks suspiciously low for the size and amenities usually is.
Ask about the depreciation report. New buildings may not have one yet, and the rules around them are tightening — see the 2026 depreciation-report deadline. Know when the strata will be required to commission its first one, because that report often reveals the real long-term funding gap.
Once the strata exists, get a Form B. For any resale unit in a young building, the Form B Information Certificate will show the current fees, the reserve balance, and any levies already on the horizon.
Factor in the warranty. BC's mandatory new-home warranty (often summarized as "2-5-10") means many early defects are covered — but coverage windows and exclusions matter, so confirm the current terms rather than assuming everything is handled.

Our broader checklist, what to look for when buying a strata in BC, walks through the rest of the due diligence.

Why small buildings feel it most

In a large tower, a budgeting miss is spread across hundreds of units, so each owner's share of a correction is smaller. In a boutique building under 150 units — the kind we manage across Metro Vancouver and the Fraser Valley — there are far fewer owners to absorb the same fixed costs. A single underfunded elevator, roof, or building-envelope item lands hard when it's divided among a few dozen households. If you're weighing a smaller building, investing in a large vs small strata unpacks that trade-off.

The good news: a small strata that budgets honestly from year two onward, funds its reserve properly, and gets ahead of its depreciation report is a genuinely stable place to own. The first-year number is just the sales price of the budget — not the cost of running the building.

This article is general information, not legal or financial advice. The rules for developer disclosure, first AGMs, contingency funding, and depreciation reports come from the Strata Property Act and related legislation, which change over time. Confirm current requirements with a strata lawyer or a qualified strata manager before you rely on them.

Frequently asked questions

Why are strata fees in a new building often so low at first? Because the developer sets the first-year budget before there's any operating history, and lower fees make units easier to sell. It's an estimate made by the party with the most reason to keep it modest, so treat it as a starting point rather than a settled cost.

Will my strata fees really go up after the developer leaves? Often, yes. Once owners take control at the first AGM and build a budget from real invoices, under-estimated line items get corrected. Increases can be modest or steep depending on how optimistic the original budget was.

What's the difference between a fee increase and a special levy? A fee increase raises your regular monthly payment to cover ongoing costs. A special levy is a one-time charge to fund something the budget and reserve can't, such as an unexpected repair — see our special levy guide.

How can I check a developer's budget before buying? Read the interim budget in the disclosure statement, compare the quoted fees to real buildings of similar size, ask how the contingency reserve is funded, and find out when the first depreciation report is due. For a resale unit, order a Form B.

Does the new-home warranty protect me from fee jumps? No. BC's new-home warranty covers construction defects within its coverage windows; it does not cover the ordinary operating costs of running the building. A thin operating budget is a separate risk from a building defect.