Strata corporations can no longer indefinitely defer strata depreciation reports thanks to new provincial regulations that close a loophole in the Strata Property Act.
The loophole had allowed strata corporations to indefinitely defer depreciation reports.
As of July 1, 2024, existing strata corporations with five or more strata lots will be required to:
- obtain a depreciation report at least once every five years;
- develop a long-term repair and maintenance plan for their property;
- build up their contingency reserve funds; and
- avoid special levies.
Strata corporations formed between July 1, 2024, and June 30, 2027, must obtain depreciation reports within two years of the first annual general meeting and every five years thereafter.
Strata corporations formed on or after July 1, 2027, must obtain depreciation reports within 18 months of the first annual general meeting and every five years thereafter.
“These regulations will help protect strata owners by ensuring depreciation reports are obtained regularly, providing them with the information and predictability they need to plan for future costs,” said Ravi Kahlon, minister of housing.
Strata corporations without depreciation reports
Strata corporations without depreciation reports or depreciation reports received prior to Dec. 31, 2020, must obtain them by:
- July 1, 2026, if located in Metro Vancouver, Fraser Valley areas, or the Capital Regional District (excluding the Gulf Islands and all other islands); or
- July 1, 2027, if located in other areas of the province.
Reports must be from a qualified professional
Effective July 1, 2025, strata corporations must also obtain their depreciation reports from a list of qualified professions, including:
- engineers
- certified reserve planners
- architects
- appraisers
- applied science technologists
- qualified surveyors
Goal of depreciation reports
Depreciation reports enable strata corporation to estimate long-term repair and replacement costs of shared property and assets, giving strata owners the ability to contribute to contingency reserve funds as required.
Previously, depreciation reports could be repeatedly deferred if three-quarters of a strata corporation’s owners voted annually in favour of a deferral.
Owner-developers
To support new strata corporations with five or more strata lots, effective July 1, 2027, owner-developers will be required to contribute funds toward the cost of obtaining a first depreciation report. Funds are a minimum of $5,000, plus $200 per strata lot, up to a maximum of $30,000.
Strata corporations with four or fewer lots will continue to be exempt from being required to obtain depreciation reports.
These regulations were developed in consultation with strata stakeholders, homeowner associations, strata lawyers, and insurance representatives.
Source: https://www.gvrealtors.ca/news-archive/new-regulations-help-close-strata-deprecation-report-loophole.html
