BC aims to protect strata owners with new regulations that close loopholes

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BC strata owners will soon no longer be surprised by long-term repair and replacement costs as the province closes loopholes.

In a statement from the Ministry of Housing Monday, it said loopholes that allowed strata corporations to indefinitely defer depreciation reports will close. This means strata owners will have more “certainty and consistency” around common property repair and maintenance when the regulations take effect on July 1, 2024, the province said.

“No one wants to be surprised by a sudden special levy to cover repairs that should have been planned for,” Ravi Kahlon, Minister of Housing, said in a statement. “These regulations will help protect strata owners by ensuring depreciation reports are obtained regularly, providing them with the information and predictability they need to plan for future costs.”

The updated regulations will require existing strata corporations with five or more strata lots to obtain depreciation reports on a five-year cycle, instead of a three-year cycle.

“Depreciation reports help estimate the long-term repair and replacement costs of a strata corporation’s shared property and assets, giving strata owners the ability to contribute to contingency reserve funds as required,” the province explained. “Obtaining these reports could previously be deferred repeatedly as long as three-quarters of a strata corporation’s owners voted annually in favour of a deferral.”

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The province added that for new strata corporations with five or more strata lots, “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.” This support is effective July 1, 2027

However, strata corporations with four or less lots will continue to be exempt from the requirement to obtain depreciation reports.

The changes follow similar regulations made in Alberta and Ontario.

“These regulations were developed in consultation with strata stakeholders, homeowner associations, strata lawyers and insurance representatives,” the province added. “They follow amendments to the Strata Property Act passed in August 2020 to mitigate the costs of strata insurance. Those changes included updating depreciation report regulations and closing the annual three-quarter vote loophole.”