As of July 1, 2024, significant changes in legislation will affect how strata corporations across British Columbia manage their depreciation reports. Whether you manage a large or small strata, staying compliant with these new requirements is essential to avoid potential legal and financial issues.
Purpose of Depreciation Reports
Strata corporations are legally required to repair and maintain common property. A depreciation report tells a strata corporation what common property and assets it has and the projected maintenance, repair and replacement costs over a 30-year time span.
Common property is not just buildings. Common property and assets can also include landscaping, roads, recreational amenities and many other items. All strata corporations including bare land strata corporations (sometimes referred to as “strata subdivisions”) with five or more strata lots will also have to obtain depreciation reports on a five-year cycle. Bare land strata corporations are usually responsible for the long-term repair and maintenance of subdivision infrastructure including roads, water, electricity, and sewage.
The depreciation report helps strata lot owners protect their homes and investments and avoid being surprised by unexpected special levies. The report also provides valuable information to prospective buyers, mortgage and insurance providers.
Key Changes to Depreciation Report Requirements
Mandatory Reports
One of the most notable changes is that all strata corporations with five or more lots must now obtain a depreciation report on a five-year cycle. Strata’s with four or fewer lots remain exempt from this requirement.
Voting Adjustments
In the past, strata corporations could defer obtaining a depreciation report by holding an annual ¾ vote. However, this is no longer an option. Strata’s must now adhere to the new timeline without the ability to delay reporting.
Timeframes for Compliance
If your strata currently lack a depreciation report, or your report is dated prior to December 31, 2020, new reports must be obtained by:
- July 1, 2026 for strata located in Metro Vancouver, the Fraser Valley, or the Capital Regional District.
- July 1, 2027 for strata located in other regions of British Columbia.
Qualified Professionals Requirement
Beginning July 1, 2025, only designated professionals will be authorized to prepare depreciation reports. This includes professionals such as engineers, architects, and accredited appraisers.
Requirements for New Strata Corporations
Strata corporations established on or after July 1, 2024, must obtain their first depreciation report within two years of their first annual general meeting. After that, subsequent reports will be required on a five-year cycle.
Funding for New Strata Corporations
Starting July 1, 2027, owner developers will be responsible for contributing to the funding of the first depreciation report for new strata corporations. This measure ensures that new strata’s have the financial support needed to meet the reporting requirements from the outset.
How MJR Electric – Your Vancouver Electrician Can Help
For Strata’s needing to update their depreciation reports and align with the new standards, it’s crucial to act now. At MJR Electric, we work with our trusted partners at Stelor to provide high-quality depreciation reports that meet all legislative requirements. Our team of professionals will ensure that your strata remain compliant, helping you avoid any legal complications and ensuring that your property is well-maintained for the future.
If you have any questions about the new legislation or want to schedule an assessment, reach out to us today via email: sales@mjrelectric.ca. We’re here to help make this process smooth and hassle-free for your strata. For more information on the legislative changes, you can also visit the official BC Government website.