B.C. Strata Depreciation Report Basics

Bare Bones Summary

Depreciation Reports (D.R.) for strata controlled buildings of 5 or more units, have been made mandatory in British Columbia (due latest Dec. 13, 2013), and need to be included with the standard ‘Form B’ when selling.
Strata members can, however, vote annually against creating a D.R. provided the vote to opt out is 75% or higher.

 

The Depreciation Report basically provides three things –

  1. An inventory of the building assets.
  2. A plan/schedule for the next 30 years showing anticipated building maintenance, repairs and replacements and their associated costs.
  3. A financial forecast showing a plan for meeting future financial depreciation obligations.

The Depreciation Report must be updated every 3 years.

 

Notes and Concerns

  • The government guidance on D.R. consultant qualifications (the contractor who will actually create the report), is quite broad. Strata councils will have to do their ‘due diligence’ to ensure they have hired qualified people and at a reasonable price. The strata, of course, is ultimately responsible for the results.
  • Government information provided does not seem to include a Building Envelope Inspection (BEI) if required, which could, if found to be deficient, greatly influence any D.R.  Only inspecting building structure is indicated as a requirement. Strata councils of older buildings that may be susceptible to problems such as ‘leaky condo syndrome’ or similar, should investigate the likelihood of the problem and then check their D.R. quotations for inclusion of a BEI where necessary. (See Leaky Condos)

 

Stratas considering opting out of providing a D.R. or have not actioned the directives contained in their D.R., should consider that some mortgage providers are denying new buyer financing based on the unknowns created by stratas not undertaking a D.R. or its recommendations. This could ultimately affect the property re-sale value for individual owner suites in the building and may affect future potential buyer/realtor interest.

 

For other important information, check out the following links –

 VISOA

Partial List of local Consultants – PDF

Office of Housing and Construction Standards

CHOA site

 

Information provided courtesy of Fleetwood Building Inspections