New changes have been made to the regulations under the Strata Property Act relating to Depreciation Reports. The amendments make changes to requirements for strata corporations with five or more strata lots in their strata plans. Changes have also been made to requirements for the funding that real estate developers are required to provide to new strata corporations. These regulatory changes will come into effect on July 1, 2024.

What is a Strata Depreciation Report?

Strata Depreciation reports provide assessments of the condition of strata buildings and it’s infrastructure. This aids in long-term financial planning and maintenance strategies for strata corporations.  

The amendments to the Strata Property Regulation will discontinue deferrals of strata depreciation reports, by lengthening the timeline for acquiring new depreciation reports, and increasing the quality of new depreciation reports. 

The regulatory changes will particularly aid in the following:

• Remove the ability of strata corporations to indefinitely defer getting a depreciation report by obtaining an annual three-quarters vote; 
• Require strata corporations to obtain a depreciation report every five years instead of every three years; 
• Require strata corporations to obtain depreciation reports from a list of qualified professionals; and 
• Require developers to provide new strata corporations, which are established on or after July 1, 2027 and have five or more strata lots, with funding for depreciation reports. The required funding is a minimum of $5,000, plus $200 per strata lot, up to a maximum of $30,000 and must be paid into the strata contingency reserve fund no later than the date of the strata corporation’s first annual general meeting.

Although the amendments come into effect on July 1, 2024, there are a number of transitional provisions that specify the dates by which various existing or new strata corporations must obtain depreciation reports. To view the transitional provisions, please visit Order of the Lieutenant Governor in Council 204 – 2024. 

Effect on Filed Disclosure Statements 

If a developer has already filed a disclosure statement with BCFSA, but does not expect to complete the development property until on or after July 1, 2027, the developer may be required to file a disclosure statement amendment if the changes to the Strata Property Regulation would result in a misrepresentation in the disclosure statement. 

For example: if a developer’s existing REDMA disclosure statement does not provide for at least the developer’s required contribution to the strata contingency reserve fund for a depreciation report, the developer must immediately amend that disclosure statement to include that information and ensure an accurate disclosure. 

Learn more by visiting these links:

• Government of B.C.’s Strata Housing website; 
• Government of B.C. News Release;  
• Strata Property Regulation; and 
• Order of the Lieutenant Governor in Council 204 – 2024. 

Speaking to a professional if about the strata documents, depreciation reports, and your own personal circumstances is essential. Please always verify the accuracy of this information through your own due diligence. Nicole McWilliams will assume no responsibility or liability for the accuracy of the information within.

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