Strata corporations with five or more units must now
provide the most recent depreciation report as part of the new Information
Certificate (Form B).
Strata
corporations of four or fewer strata lots are not required to provide a
depreciation report.
A strata
corporation can exempt itself from the obligation to obtain a depreciation
report by passing a resolution with a 3/4 majority vote at an annual general or
special general meeting.
The strata
corporation then has 18 months from their last exemption vote to either hold
another vote providing for a further exemption or obtain a depreciation report.
“This
means a strata corporation not wanting a depreciation report will have to waive
its requirement at each annual general meeting, according to Ed Wilson, a
partner with Lawson Lundell law firm.
“In
practice, this means that, if votes to exempt are being held annually at annual
general meetings, there would still be about six months left to get a depreciation
report done if the ¾ vote did not pass in a given year,” says Wilson.
The depreciation report must be:
· prepared by someone qualified such as an architect or
engineer with errors and omission insurance; and
· updated every three years.
The depreciation report provides important information to
owners, buyers, mortgage providers and insurers. The report must include:
· an on-site inspection and inventory of the common property
and building systems;
· schedule of anticipated maintenance, repairs and
replacement costs for common expenses projected over 30 years; and
· a financial forecast which includes costs and cash-flow
funding models for the contingency reserve fund.
