Strata Living in Vancouver, Depreciation Reports


New Requirements On December 14, 2011, new requirements came into effect for Depreciation Reports. Strata corporations need to obtain depreciation reports every three years unless they hold an annual ¾ vote to waive the requirement or have four, or fewer, strata lots. If a strata corporation has already obtained a depreciation report, that meets the new requirements, it will have three years to obtain another report. Please note, there are different timing requirements for obtaining the first depreciation report depending on when the strata corporation was formed. ▪ For strata corporations formed on or before December 14, 2011, a depreciation report is required by December 13, 2013. ▪ For strata corporations formed after December 14, 2011 a depreciation report is required within 6 months after their second AGM.

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Wed May 7, 2014 1:48pm PST

 

Fewer than 20% of the 30,000 strata corporations in British Columbia have agreed to acquire depreciation reports, which were mandated for most condominium buildings in December 2013 under the provincial Strata Property Act, Regulations and Amendments.

 

 

Strata corporations can opt out of the requirement with a 75% vote among members.

But, nearly six months after the amendment was introduced, half of the B.C.’s stratas have ignored the amendment and fewer than one in five have signed up to get a depreciation report done, an industry insider claims.

 “Anecdotal evidence is 50% did nothing, by way of not voting, 15%-20% ordered the report and the balance voted to exempt themselves,” said Jeremy Bramwell, president of Vancouver-based Bramwell & Associates Realty Advisors Inc., a commercial appraiser that operates one of the largest depreciation report departments in the province.

The depreciation reports are meant to inform consumers of what repairs and maintenance are required for any strata building, seen as important due to the large and growing number of older condo buildings. The requirement covers both residential and commercial stratas.

Bramwell said not completing a depreciation report can prove costly. “Purchasers are looking for them to get an understanding of their long-obligations,” he said, adding it may even be difficult to get financing if there is no depreciation report in place.

“Lenders who do not see a depreciation report will raise the mortgage interest rates to offset the increased risk. Higher mortgage rates will force down the offer price from the buyer as more money is required to service the loan. Or in older buildings, they may decline the loan,” Bramwell said.

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