Under British Columbia’s Strata Property Act and regulations, strata corporations with five or more strata lots must obtain depreciation reports. This includes bare land strata corporations ("strata subdivisions") and other kinds of strata corporations. Strata depreciation reports must meet certain legal requirements.
Strata corporations may also waive the legal requirement to obtain a depreciation report, or defer updating a depreciation report, by passing an annual 3/4 vote.
A depreciation reports tells a strata corporation what common property and assets it has and what are the projected maintenance, repair and replacement costs over a 30 year time span.
Common property is just not buildings. Common property and assets can also include landscaping, roads, recreation amenities and many other items.
The depreciation report helps strata lot owners to protect their homes and investments and provides valuable information to prospective purchasers, mortgage and insurance providers.
Strata corporations must obtain depreciation reports no later than 6 months after their second AGM (Annual General Meeting).
Depreciation reports must be renewed every three years.
Strata corporations may waive the requirement to obtain a depreciation report, or defer a renewal, by passing an annual 3/4 vote.
Six-month grace period: the strata corporation has six months to obtain a depreciation report if an annual 3/4 vote to waive the requirement is not passed.
Transition Period: strata corporations formed on or before December 13, 2011 were given a two year transition period – until December 13, 2013 – to obtain a depreciation report. After this two-year transition period, a strata corporation without a current depreciation report would have to pass a 3/4 vote annually in order to waive the requirement. If a strata corporation had already obtained a depreciation report which met the new requirements, it had three years to obtain another report.
As per Strata Property Regulation 6.2, a depreciation report must have certain content.
Physical Component Inventory and Evaluation: A depreciation report must include a physical component inventory and evaluation of components which must:
Items to be reviewed include (but are not limited to):
The list above is not a complete list. And not every strata corporation will have all of the components listed above. For example, some strata corporations have building structures they are responsible to repair and maintain, others do not. Some strata corporations will have water utilities they are responsible to repair and maintain, others do not.
The depreciation report must also identify those parts of the common property and limited common property, if any, that individual strata lot owners are responsible to repair and maintain. For example, patios and balconies that are designated limited common property in a highrise "condo tower".
Financial Forecasting Section: Depreciation reports must also include a financial forecasting section to help the strata corporation, and owners, to plan for the repair and maintenance of common property and assets.
The financial forecasting section must include:
Depreciation reports must also include:
The Strata Property Act and regulations do not designate which professions can prepare depreciation reports. Stratas can obtain depreciation reports from a variety of professionals.
The knowledge and expertise required to prepare a depreciation report for a six-plex may be considerably different that required to prepare a depreciation report for a high rise residential “condo” tower with its own power generating plant, sections and underground parkade.
The regulations require that the person (note: the word “person” used in the regulations is a legal term and can mean either an individual or a company) preparing the depreciation report must have the knowledge and expertise to:
The depreciation report must include the name of the person from whom the depreciation report was obtained and a description of:
The most recent depreciation report, if any, must be attached to the "Form B: the Information Certificate" and provided to buyers.
Under Section 35 of the Strata Property Act the strata corporation must retain:
Strata Property Act sections: 1, 35, 59, 91-96, 98-101, 103, 105, 108, 109, 111, 158, 194, 195
Strata Property Regulation: 6.1-6.6, 6.11, 11.1-11.3
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The information on this website about strata housing is provided for the user’s convenience as a basic starting point; it is not a substitute for getting legal advice. Learn more about the site’s purpose and limits. The content on this website is periodically reviewed and updated by the Province of British Columbia as per the date noted on each page: January 7, 2021.