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Buying or selling a strata property in British Columbia is going to get a little easier, thanks to some new regulations regarding strata property depreciation reports just passed by the BC government that will come into effect by Dec 13, 3013. Essentially, as of this date, any strata property composed of more than 4 units will be required to have a property depreciation report. Many strata corporations already use these reports; they are a valuable tool to help manage the contingency funds with the maintenance costs of the common property. It is possible for a strata corporation to vote to defer obtaining this depreciation report (a 75% vote in favour is required) but that’s not really a wise course of action. Ignoring a problem NEVER makes it go away and it could result in costly emergency repairs if the common property’s systems and assets aren’t monitored and maintained. Strata property owners who are planning to sell their unit should be thankful if they have a depreciation report to show to prospective buyers; it shows that your strata corporation is keeping on top of maintenance issues, always a good selling point. In fact, your realtor is going to ask you to complete a Property Disclosure Statement for Strata Properties and there is within that document a specific inquiry about the depreciation report so buyers will be asking for it! If you are looking to purchase a strata property you will certainly want to see a depreciation report (now that you know about them!) to determine whether your potential new home is being managed properly and has funds to continue. If any strata property that you are considering purchasing has deferred the acquisition of a depreciation report (especially if they have done so repeatedly) you would do well to ask yourself (and them) why. It might not be an indication of a problem, but it could mean the strata corporation is dysfunctional, or has its head in the sand regarding the need to plan for the inevitable maintenance needs of the common property. The requirements for obtaining a valid depreciation report are fairly simple; it must be prepared by an appropriate (and appropriately insured) person, usually an engineer or architect, and it must contain certain items, such as: • A financial forecast containing no less than three cash flow funding models for the contingency reserve fund; • An inventory of the common property, including building systems, and • Expected maintenance, repair and replacement costs for common expenses projected over 30 years. More information about strata property depreciation reports can be found at the BC government website, the office of housing and construction standards.
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strata property, strata regulations, depreciation report, Victoria real estate, Geoff McLean, home selling, buying house,
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