Please note that this post is outdated, but still contains useful information. An important update to this post can be found here as the Regulations referred to below have been amended.
We have previously written on the amendments to the Strata Property Act requiring all strata corporations to obtain a Depreciation Report by December 2013.
If you live in a strata corporation which has obtained a Depreciation Report already, you’re no doubt familiar with the various funding scenarios they present. At least one of those scenarios will involve a very substantial increase in the amount of money your strata corporation puts away into the Contingency Reserve Fund (CRF). Depending on the size of the strata corporation, there could be millions of dollars put away over the 30 year time horizon to fund capital renewals of expensive common elements such as windows, walls, mechanical equipment and waterproofing. This money will get put away gradually over time, again depending on the nuances of the scenario itself, and accrue interest at a given rate. Strata Corporations also have the advantage of being able to invest money tax free, because they are ‘not for profit’. So, money invested by your Strata Corporation is not taxed when in a Strata account (while it would be if each individual owner invested the money on their own and then pooled it later on via a special levy).