250-412-6595 [email protected]
The Importance of a Strata Depreciation Report

The Importance of a Strata Depreciation Report

A strata depreciation report is a key document for any strata corporation. It provides valuable information about the common property and assets in the strata, and helps owners to plan and pay for their upkeep and replacement. In this blog post, we’ll discuss practical tips for getting the most out of your strata depreciation report.

What is a Strata Depreciation Report?

A depreciation report is a document prepared by an expert that outlines the repair, replacement and renewal costs of common property and assets in a strata corporation. The report is based on an examination of the property, as well as information provided by the strata corporation.

Why is a Strata Depreciation Report Important?

A strata depreciation report is important because it helps strata lot owners to protect their homes and investments. The report provides valuable information to prospective purchasers, and helps the strata corporation to plan and pay for the upkeep of common property and assets.

Without a depreciation report, stratas would have no idea how much money they need to set aside each year to fund future repairs and replacements. As a result, many stratas would find themselves unable to pay for major repairs when they become necessary, which could lead to significant financial problems down the road.

How a Strata Depreciation Report is Prepared?

The quality of a depreciation report relies on the expertise of the person or company preparing the report and the information provided by the strata corporation. The person or company preparing the report will first inspect the common property and assets in question. They will then use this information to estimate how much it would cost to repair or replace each item if it was damaged beyond repair or reached the end of its useful life.

Once this information has been gathered, it is compiled into a report which is then presented to the strata council. The strata council will use this information to develop a long-term financial plan to fund major repairs and replacements when they become necessary.

What are the Strata Depreciation Report Requirements?

Under the Strata Property Act and regulations in British Columbia, strata corporations with five or more lots must obtain depreciation reports. This includes bare land subdivision as well other kinds of property governed by this act. Every three years they will be required to update their last report. Strata corporations may waive the requirement to obtain a depreciation report, or defer a renewal, by passing an annual 3/4 vote. The strata corporation has six months to obtain a strata depreciation report if an annual 3/4 vote to waive the requirement is not passed.

As per Strata Property Regulation 6.2, a depreciation report must have certain content, including Physical Component Inventory and Evaluation, a Financial Forecasting section and depreciation reports must also include a summary of the repair and maintenance work for common expenses that occur less often than once year (i.e. contingency reserve fund expenses), the date of the report as well as any other appropriate information or analysis that the strata corporation or the person providing the depreciation report considers appropriate.

How to Get the Most Out of  Your Strata Depreciation Report.

The Strata Property Act and regulations do not designate which professions can prepare depreciation reports. Stratas can obtain depreciation reports from a variety of professionals. There are a few things you can do to make sure you’re getting the most out of your depreciation report:

  • Make sure you hire a reputable expert to prepare the report. The quality of the depreciation report relies on the expertise of the person or company preparing the report.
  • Make sure you provide accurate information to the person preparing the report. The depreciation report is only as accurate as the information provided by the strata corporation.
  • Review the depreciation report carefully and make sure you understand it before making any decisions about repairs, replacements or renewals.
  • Use the depreciation report as a starting point for planning and budgeting for future repairs, replacements or renewals.
  • Keep in mind that the strata depreciation report is a snapshot in time, and things may have changed since it was prepared. Be sure to keep it up to date so that it accurately reflects the current state of affairs.

A strata depreciation report is an important tool for any strata corporation. It helps owners to protect their homes and investments, provides valuable information to prospective purchasers, and helps the strata corporation to plan and pay for future repairs, replacements and renewals. By following these practical tips, you can make sure you’re getting the most out of your depreciation report.

Not Legal Advice - The material provided on the StrataPress website is for general information purposes only. It is not intended to provide legal advice or opinions of any kind and may not be used for professional or commercial purposes. No one should act, or refrain from acting, based solely upon the materials provided on this website, any hypertext links or other general information without first seeking appropriate legal or other professional advice. These materials may have no evidentiary value and should be checked against official sources before they are used for professional or commercial purposes. Your use of these materials is at your own risk.

Gaining Access to a Strata Corporation Documents

Gaining Access to a Strata Corporation Documents

When considering the purchase of a strata unit, it is important to obtain information about the strata corporation in order to make an informed decision. The strata documents, which include the bylaws and financial statements, can provide valuable insights into the strata corporation’s operations. In addition, minutes of meetings and other records can provide helpful information about strata council decisions and activities. As such, it is important to consult with a strata lawyer or strata manager to ensure that all necessary information is obtained before making a purchase.

A Strata Corporation’s financial and other records may be accessed by a potential buyer in a few ways.

Firstly, all strata documents are typically available for perusal by the public at the strata office. Secondly, if an individual is considering purchasing a strata unit, they may request to view the strata’s bylaws, financials, and minutes of council meetings from the strata corporation. Thirdly, some strata corporations post select information (e.g. meeting minutes, agendas) on their website or online bulletin board for owners and residents to view. There are also services like StrataPress.com that enable you to obtain documents easily online.

Finally, most strata corporations welcome questions from owners and prospective purchasers alike; thus, another route to gaining access to needed information would be to simply ask the strata council for the records in question. In sum, there are several methods by which a potential buyer may gain access to a Strata Corporation’s financial and other records.

The Strata Property Act entitles owners, or their delegates, authorized in writing, to inspect and obtain copies of all of the strata corporation’s records listed in Section 35 of the SPA. If an owner authorizes a buyer, in writing, to inspect the strata corporation’s records or to obtain copies of them, the corporation must allow the buyer to inspect and purchase copies of the records specified. Typically, a buyer obtains the owner’s authorization by negotiating a suitable provision in the parties’ contract of purchase and sale.  If the buyer cannot inspect the records before signing a purchase agreement, they may require a contingency clause in that agreement.

For more information, check out the Strata Property Act Section 36 and Strata Property Act Section 35

 

Not Legal Advice - The material provided on the StrataPress website is for general information purposes only. It is not intended to provide legal advice or opinions of any kind and may not be used for professional or commercial purposes. No one should act, or refrain from acting, based solely upon the materials provided on this website, any hypertext links or other general information without first seeking appropriate legal or other professional advice. These materials may have no evidentiary value and should be checked against official sources before they are used for professional or commercial purposes. Your use of these materials is at your own risk.

B.C. Strata Property Act – Section 35

B.C. Strata Property Act – Section 35

STRATA PROPERTY ACT [SBC 1998] CHAPTER 43 Part 4 — Strata Corporation Governance Division 1 — The Council

Section 35 (1)

The strata corporation must prepare all of the following records:

(a) minutes of annual and special general meetings and council meetings, including the results of any votes;

(b) a list of council members;

(c) a list of

(i) owners, with their strata lot addresses, mailing addresses if different, strata lot numbers as shown on the strata plan, parking stall and storage locker numbers, if any, and unit entitlements,

(ii) names and addresses of mortgagees who have filed a Mortgagee’s Request for Notification under section 60,

(iii) names of tenants, and

(iv) assignments of voting or other rights by landlords to tenants under sections 147 and 148;

(d) books of account showing money received and spent and the reason for the receipt or expenditure;

(e) any other records required by the regulations.

(2) The strata corporation must retain copies of all of the following:

(a) the records referred to in subsection (1);

(b) the registered strata plan and any strata plan amendments as obtained from the land title office;

(c) this Act and the regulations;

(d) the bylaws and rules;

(e) resolutions that deal with changes to common property, including the designation of limited common property;

(f) waivers and consents under section 41, 44 or 45;

(g) written contracts to which the strata corporation is a party;

(h) any decision of an arbitrator or judge, or of the civil resolution tribunal, in a proceeding in which the strata corporation was a party, and any legal opinions obtained by the strata corporation;

(i) the budget and financial statement for the current year and for previous years;

(j) income tax returns, if any;

(k) correspondence sent or received by the strata corporation and council;

(l) bank statements, cancelled cheques and certificates of deposit;

(m) Information Certificates issued under section 59;

(n) the records and documents referred to in section 20 or 23 obtained by the strata corporation;

(n.1) any depreciation reports obtained by the strata corporation under section 94;

(n.2) any reports obtained by the strata corporation respecting repair or maintenance of major items in the strata corporation, including, without limitation, engineers’ reports, risk management reports, sanitation reports and reports respecting any items for which information is, under section 94, required to be contained in a depreciation report;

(o) any other records required by the regulations.

(3) Records referred to in this section must be retained by the strata corporation for the periods set out in the regulations.

Source: https://www.bclaws.gov.bc.ca/civix/document/id/complete/statreg/98043_04

Not Legal Advice - The material provided on the StrataPress website is for general information purposes only. It is not intended to provide legal advice or opinions of any kind and may not be used for professional or commercial purposes. No one should act, or refrain from acting, based solely upon the materials provided on this website, any hypertext links or other general information without first seeking appropriate legal or other professional advice. These materials may have no evidentiary value and should be checked against official sources before they are used for professional or commercial purposes. Your use of these materials is at your own risk.