Unless exempted, all BC strata corporations must obtain a depreciation report by December 13, 2013 as required by section 94 of the Strata Property Act, SBC c.43.
What is a strata depreciation report?
A depreciation report is a planning tool utilized by the council and the property manager to plan major repairs and replacement of common property over their lifetime.
The report is prepared by professionals and includes:
- An inventory of all commonly owned assets;
- An evaluation of such assets based on an on-site visual inspection of the property;
- Cost estimates for repairs, replacement and maintenance of each asset over a 30 year period;
- Cash flow funding models used to calculate contingency reserve funding.
In general, updated depreciation reports must be obtained every 3 years thereafter.
If your strata property is 4 or fewer units, you need not obtain a report, or if the strata corporation passes a resolution waiving the requirement before the deadline.
If you own strata property, it is important you take an interest in the depreciation report and plan for likely future assessments against your unit or increased monthly strata fees to account for increased reserves in accordance with the report recommendations.
For owners of newer and larger strata properties with many units, this legal planning requirement will be most welcome, and provide reassurance that your interest in the common assets are properly managed for the long-term.
For smaller or older units, the depreciation report may be an unhappy, wake up call for owners who preferred lower monthly strata fees now rather than planning for replacement of assets sometime in the future. Expect some of these units to go on sale soon!
For more information, visit the Office of Housing and Construction Standards website at www.housing.gov.bc.ca/strata.