Regulations are now in effect to protect B.C. strata owners from unexpected long-term repairs and replacement costs. As of July 1, the Ministry of Housing has closed loopholes in the Strata Property Act that allowed corporations to indefinitely defer depreciation reports.

Strata corporations of five or more lots must now obtain a new depreciation report at least once every five years. They can no longer waive or defer obtaining the report.

Back in April, the Vancouver Island Strata Owners Association said information in the report becomes outdated after the three- to five-year mark. “It’s difficult to manage assets worth millions of dollars without reliable information. The condition of the roof, boiler, or parking areas may have fared better or worse than expected over the last few years. The cost of construction materials may have increased more than the inflation rate in the financial models. The current amount in the CRF may be lower than planned due to unexpected repairs or to pay insurance deductibles.”

The changes to the SPA regarding depreciation reports set deadlines, qualifications to write a report, and a new requirement for developers to help pay for a new strata’s first report.

Effective July 1, 2025, all strata corporations must also obtain their depreciation reports from a list of qualified professions, including engineers, certified reserve planners, architects, appraisers, applied science technologists and quantity surveyors.

Following that, on July 1, 2027, owner-developers will be required to contribute funds toward the cost of obtaining a first depreciation report: a minimum of $5,000, plus $200 per strata lot, up to a maximum of $30,000.

Strata corporations with four or fewer lots will continue to be exempt from the requirement.

The regulation changes follow amendments to the SPA to mitigate the costs of strata insurance, which included updating depreciation report regulations and closing the annual three-quarter vote loophole.