Cost of strata registrations spike despite rate cut
The Commission of Strata Corporations, CSC, quoted a new rate for registration fees in April, which, for some strata corporations, resulted in more than a 200 per cent increase.
The cost to the stratas increased, even though the CSC had cut the rate by 15 basis points, as a result of increased property values.
The CSC explained that the rates were adjusted based on new unimproved value of land set by the National Land Agency.
Strata corporations are residential and commercial units which share common walls and other amenities in a common area. At last report, there were more than 2,000 of them, all of which are required to re-register annually with the CSC.
In the case of one corporation, from which the Financial Gleaner obtained the fee notification increase, its annual fee more than doubled from $68,000 to $157,500.
Strata corporation unit owners have been protesting the insufficient notice to properly budget for the increase - and consequently, the problems they are likely to face collecting from members in a timely manner - but the CSC itself has noted that the situation could have been worse, had it not sought Cabinet approval for a reduction in the applicable rate.
Sandra Watson, CEO of the Real Estate Board Jamaica and Commission of Strata Corporations, did not respond to requests for comment. However, in a letter sent out to strata corporations by the CSC, the commission said it acted to delay and reduce the full impact of the new valuations.
The NLA revaluations took effect in April 2017. Consequently, the strata registration fee, which had been set at 0.4 per cent of unimproved values, or UV, since the inception of the CSC in 2010, was reduced to 0.25 per cent.
"The commission of strata corporations, being mindful of the effect of the changes in the UV on the annual fees payable by the strata corporations, retained the fee structure applicable prior to April 1, 2017, for the financial year 2017/18 and absorbed the loss," the CSC wrote.
"The Commission has since sought and received permission to revise the rates charged from 0.4 per cent of the UV to 0.25 per cent of the current UV effected April 1, 2018, in an effort to lessen the impact of the increase occasioned by the changes of the UV."
Under the new fee structure, the charge to individual owners of strata units is capped at $12,000 per unit annually, the CSC said.