New *Mandatory* Depreciation Report Requirements

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The Provincial Government has announced Order in Council 204-2024, which was deposited today (April 22, 2024).

This new Order makes it mandatory for all but a small class of Strata Corporations to conduct Depreciation Reports every 5 years.  Gone is the exemption made possible by the passing of a 3/4 Vote of the Owners to waive this requirement.  They are now mandatory for all with no provision to opt out, though the update cycle has been extended from 3 to 5 years.  In order to allow for a transition period for this new requirement, the first depreciation report is not due until July 1, 2026 for those Strata Corporations without a report or with one on hand which was received prior to December 31, 2020.

In addition, the government has now defined Qualifications for report providers, and limited the preparation of reports to six professions: engineers, architects, applied science technologists, certified appraisers, certified reserve planners, and quantity surveyors.  Previously, definitions for those qualified were quite loose.

These new changes take effect immediately, but to ensure that Strata Corporations have time to adequately budget for a Depreciation Report (or update), the first report is not due until July 1, 2026.  Beginning in July of 2025, only Qualified persons may conduct the reports.

You can read more about the changes here, with the most relevant portion quoted below:

Overview: updated depreciation report regulations

Effective July 1, 2024, the Province has strengthened requirements for strata depreciation reports as per OIC 204-2024 (deposited April 22, 2024).

  • All strata corporations with five or more lots must obtain a depreciation report on a five-year cycle; strata corporations with four or fewer lots continue to be exempted
  • Strata corporations may no longer hold an annual ¾ vote to defer getting a depreciation report
  • Strata corporations without depreciation reports, or depreciation reports received prior to December 31, 2020, will have time to obtain depreciation reports:
    • until July 1, 2026, if located in Metro Vancouver, the Fraser Valley, or the Capital Regional District (excluding the Gulf Islands and other islands within the CRD)
    • until July 1, 2027, if located in other areas of British Columbia
  • Effective July 1, 2025, strata corporations must obtain depreciation reports from six designated professions: engineers, architects, applied science technologists, accredited appraisers, certified reserve planners, and quantity surveyors
  • New strata corporations established on or after July 1, 2024 but before July 1, 2027, must get a depreciation report within two years of the strata corporation’s first annual general meeting and every five years thereafter
  • As of July 1, 2027, owner developers will provide some funding towards the first depreciation report for new strata corporations with five or more lots: a minimum of $5,000 plus $200 per strata lot to a maximum of $30,000. Accordingly, strata corporations established on or after July 1, 2027, must obtain a depreciation report within 18 months of the strata corporation’s first annual general meeting

The regulations have added to the content required in depreciation reports: an executive summary, and (if applicable to the strata corporation) air conditioning and ventilation.