Changes to the Strata Property Act – An Update
Changes to the Strata Property Act – An Update
In 2009, the BC Provincial Government announced several significant changes to the Strata Property Act. The amendments had three main components which were written about and widely publicized. They were:
– A requirement that strata corporations conduct a Depreciation Report, a subject we have written about on many occasions;
– The creation of a Dispute Resolution Tribunal, which has not yet come into force but which is still being worked on, and;
– A requirement that strata corporations perform an audit of their financial statements on an annual basis.
The first, Depreciation Reports, has been an industry shaking move. Most strata corporations are required to conduct a Depreciation Report and have it updated every 3 years. We have advocated for this (read further here) and take the position that this is a good and prudent move for owners to provide a plan for future expenditures.
In March 2013, the B.C. government advised that an acting chair had been appointed to start work on the Civil Resolution Tribunal (CRT) which will assist in resolving strata and small claim disputes. Cheryl Vickers was appointed as acting chair for B.C.’s new Civil Resolution Tribunal (CRT), Canada’s first-ever online tribunal that will help citizens resolve strata and small claim disputes. The CRT will offer a full array of online tools, available 24/7, to help British Columbians solve common strata and small civil claims (resolving a dispute through the tribunal is expected to take about 60 days, compared to 12 to 18 months for small claims court). The independent tribunal will provide families, small business owners, the strata community, and others with a convenient, speedy and cost-effective alternative to going to court. Those involved have been doing the foundational work required to get the CRT up-and-running for the past year or so and it is expected to be in place by December 2014. It remains to be seen whether or not this will be a positive development as much will depend on the specifics of the process, but the principal is certainly sound. Strata corporations are often threatened with capricious lawsuits by owners and this could provide a less expensive and more direct means for a strata corporation to dismiss such frivolities. The government’s stated intention is to “create a more timely, efficient justice system for British Columbians, and this initiative is striving to help significantly change the way small claims and strata disputes are resolved in B.C. by providing fair, cost-effective and accessible justice for people living in strata corporations throughout British Columbia”, and we have every hope that will be the case.
Without much fanfare or publicity (despite an initially loud and widespread public consultation campaign), the requirement for an annual audit of the strata corporation financial statements has been eliminated. After “extensive” consultation with “stakeholders”, the Government has decided not to require strata corporations to conduct audits of their financial statements on an annual basis. For many strata corporations this is probably seen as “good news”, as it would add an expense on a yearly basis that some would regard as unnecessary. It is unfortunate that the Government could not provide a middle ground such as requiring an audit for larger strata corporations, or audits on a less frequent basis, to add a level of transparency to the governance of strata corporations many owners demand. It’s also worth noting that due to the first change discussed above (the requirement for Depreciation Reports to be conducted), the amount of money being raised by strata corporations is sure to increase as reserves are bolstered. The lack of an audit will undoubtedly leave some owners questioning how their money is kept and protected. Of course, strata corporations can still conduct audits by choice, and a positive spinoff of the decision is that you should expect the cost of an audit to remain relatively stable. In the event at all strata corporations had been required to be conduct audits, the cost would almost certainly have skyrocketed.
A news bulletin from the Provincial Government announcing the elimination of the audit requirement can be found here: http://www2.news.gov.bc.ca/news_releases_2009-2013/2013EMNG0053-000476.htm
