Feb 22nd, 2012
New Strata Property Regulations You Need to Know
Do you live in a property that has a strata? The BC Provincial Cabinet has just passed substantial changes to the Strata Title Act that you should know about.
1)
The implementation of Depreciation Reports
- Depreciation reports are now mandatory for all strata corporations with more than five units.
- Those with less than five units can be exempt through an annual three-quarters vote. If the expires, strata corporation will have 18 months to get a depreciation report.
2)
The Depreciation Report must be updated every three years and must include:
- on-site inspection and inventory of common property and building systems,
- a schedule of anticipated maintenance repair and replacement costs for common expenses projected over 30 years, including potential interest and inflation rates, and
- a financial forecasting section which includes anticipated maintenance, repair and replacement costs and at least three cash flow funding models for the contingency reserve fund.
3)
Who can prepare a Depreciation Report?
- The regulation does not specify qualifications but the report must include the person's qualifications, whether they have errors and omissions insurance and the relationship between the person and the strata corporation.
- December 13, 2013 is the deadline to comply.
4)
Contingency reserve funds
- Strata corporations now don't have to fund contingency reserve funds above 25% of the operating budget and can made additional CRF contributions by a majority vote.
5)
Form B Information Certificates
- Strata corporations must attach copies of the following documents to Form B:
a/ rules of the strata corporation.
b/ current budget of the strata corporation.
c/ owner-developer's Rental Disclosure Statement, if any.
d/ most recent Depreciation Report (if any).
6)
Other changes
By January 1, 2014 strata corporations must also provide additional information to prospective buyers on parking and storage allocated to the strata lots.
Visit the new strata regulations for more information.
7)
Why will these changes impact stratas?
The changes will have a profound effect on how stratas are run and how properties are bought and sold. Buyers will definitely wish to view the Depreciation Report for the building they're considering purchasing in. If there isn’t a report, they will likely ask 'what are they hiding?' Condo buildings without a report will likely have a lower market value than those with a report. As well, banks and insurance companies will use the report to gain a better understanding of potential costs and risks for a property.
For many people, this information is confusing! Your best bet is to talk to your realtor or mortgage broker about these new changes and how they’ll impact your purchase.
Written by Maggie Chandler, providing trustworthy real estate services for 30 years
Tags: housing