Condo owners and buyers should be aware of a significant change that will affect strata properties beginning December 14, 2013.
Depreciation Reports will be required with some exceptions. For example, stratas with less than 5 units are automatically exempt, but they may choose to have reports prepared anyway. Other exemptions require a 3/4 vote from it's members. This is great idea and will provide added confidence to purchasers that are considering buying a strata property.
The reports will not only inform buyers, but also current Strata owners of maintenance issues that may have been avoided by Strata Boards until "next year". It should significantly change the way Strata Corporations are managed and issues prioritized. The intent of the reports are to help Stratas better plan for future repair and maintenance costs. They also provide valuable information to purchasers considering your strata unit. Purchasers would get a copy of the latest depreciation report as part of the Form B.
I strongly recommend that potential buyers and strata owners read the full report provided by BC Office of Housing and Construction Standards.
A depreciation report must contain:
- a physical component inventory and evaluation of those components, such as
– the building structure
– the building exterior including the roof, decks, doors and windows
– building systems such as electrical, plumbing, heating, fire, protection and security
– parking facilities and roadways
– balconies and patios;
- a summary of the anticipated maintenance, repair and replacement costs for common expenses projected over 30 years;
- a financial forecasting section that contains at least three cash flow funding models for the Contingency Reserve Fund;
- the date of the report, the qualifications of the author(s), their relationship (if any) to the strata corporation and details on any errors and omissions insurance; and
- information on the common and limited common property (if any), that individual owners are required to repair and maintain.
If you have any questions please don't hesitate to call me directly.Mike Alleyne, Real Estate AgentHomeLife Benchmark604-785-7066