Hello everyone,
As we continue to keep you informed about the latest developments in strata management, I want
to address an important legislative change that impacts all strata corporations in British
Columbia. Effective July 1, 2024, the requirement for a depreciation report that adheres to the
Strata Property Act will be fully enforced. This mandate introduces a five-year renewal cycle for
depreciation reports, ensuring that strata corporations remain proactive in managing their
properties’ long-term maintenance and financial planning.
Understanding the New Requirements
Under the new legislation, all strata corporations comprising five units or more must complete a
depreciation report. This mandate applies universally to all strata corporations registered in Land
Titles across British Columbia, encompassing a diverse range of properties, including bare land,
townhouse complexes, mid-rise and high-rise apartment buildings, and leasehold strata
corporations. No exemptions will be granted under this regulation, underscoring the
government's commitment to enhancing the sustainability and financial health of strata
properties.
Compliance Deadlines
For strata corporations that have not commissioned a depreciation report since December 31,
2020, or have previously deferred this obligation through a three-quarter vote, there are specific
deadlines for compliance. Strata corporations situated within the Fraser Valley, Metro Vancouver,
or Capital Regional Districts must secure a report by July 1, 2026. For those in all other regions,
including remote areas only accessible by air or boat, the compliance deadline extends to July 1,
2027. These staggered deadlines provide strata corporations with a reasonable window to comply
with the new requirements, but it is imperative not to delay, as a substantial number of strata
corporations will be seeking the services of qualified professionals to conduct their reports.
Qualified Service Providers
Starting July 1, 2025, the pool of service providers qualified to conduct depreciation reports in
British Columbia will be limited to certain professions. Eligible professionals will include
engineers and geoscientists, architects, registered applied science technologists, accredited
appraisers, certified reserve planners by the Real Estate Institute of Canada (REIC), and
professional quantity surveyors in Canada. This measure ensures that depreciation reports are
conducted with the highest level of expertise and accuracy, providing strata corporations with
reliable and comprehensive assessments of their property’s condition and future maintenance
needs.
Funding Requirements for New Strata Corporations
In addition to the new requirements for existing strata corporations, the legislation also stipulates
funding obligations for owner developers. From July 1, 2027, owner developers must contribute
to the contingency reserve fund with an initial payment of $5,000, plus an additional $200 per
strata lot, up to a maximum of $30,000. This fund is intended to finance the strata corporation’s
first depreciation report, which must be completed no later than 18 months after the first annual
general meeting (AGM) of the strata corporation. Furthermore, new strata corporations
established between July 1, 2024, and July 1, 2027, must complete their first depreciation report
within two years of their inaugural AGM.
Executive Summary Requirement
To enhance the accessibility and usability of these comprehensive reports, the new regulations
mandate that each depreciation report must include an executive summary. This summary is
designed to distill the essential information from what can often be several hundred pages of
detailed analysis, making it easier for strata council members and property owners to understand
and act upon the report’s findings.
Conclusion
The new depreciation report requirements represent a significant shift in how strata corporations
manage their long-term maintenance and financial planning. At Advantage Property
Management, we are dedicated to helping our clients navigate these changes and ensure
compliance with the new legislation. Our team of experienced professionals is ready to assist you
in commissioning and interpreting your depreciation reports, ensuring that your property remains
well-maintained and financially sound.
Don’t hesitate to reach out to us for more information or assistance in meeting these new
requirements. We are here to support you every step of the way.
Sincerely,
Mike Browne
Advantage Property Management
Helping Corporations Become Communities and Rentals become Reliable