How BC’s Depreciation Report Changes Affect Buyers, Sellers, and Strata Corporations

In British Columbia, depreciation reports are a cornerstone of responsible property management and real estate transactions. Recent changes to depreciation report legislation aim to increase financial transparency, promote proactive maintenance, and protect property values. Whether you’re a buyer, seller, or part of a strata corporation, these updates can significantly impact your decisions and responsibilities.

This blog will explore the key legislative changes and explain what they mean for everyone involved in B.C.’s real estate market.

Overview of B.C.’s Depreciation Report Legislation

Depreciation reports are mandatory for most strata corporations in B.C. under the Strata Property Act. These reports provide a long-term financial plan for maintaining and repairing a building’s common property, such as roofs, elevators, and plumbing systems. However, recent amendments to the legislation include stricter rules aimed at improving compliance and ensuring reports are more useful to strata owners and potential buyers.

What Are the Key Changes in BC's Legislation Regarding Depreciation Reports?

In response to growing concerns about long-term maintenance planning and financial transparency for strata properties, British Columbia has introduced significant updates to its legislative requirements for depreciation report. These changes are designed to ensure that strata corporations are better equipped to plan for and address future repair and maintenance needs. The key updates include:

1. Waiver of Depreciation Reports Eliminated

   Under the new legislation, strata corporations can no longer waive the requirement for a depreciation report with a 3/4 vote. This ensures that all strata properties maintain up-to-date, comprehensive planning and budgeting for long-term maintenance, without exceptions.

   
   

2. Revised Update Frequency

   The update cycle for depreciation reports has been extended. Previously, reports were required every three years but could be waived under certain conditions. The new rules now require updates every five years, and the ability to waive this requirement has been removed. This change provides greater consistency in the availability of current and reliable data for maintenance planning.

   
   

3. Qualified Professionals Requirement

   Starting July 1, 2025, depreciation reports must be prepared by a qualified professional, such as a registered engineer, architect, appraiser, reserve planner, or quantity surveyor. This ensures reports meet high standards of accuracy and reliability.

   
   

4. Penalties for Non-Compliance

   Strata corporations that fail to meet the new requirements may face penalties, increasing the urgency to stay compliant.

   
   

What This Means for Buyers

For buyers, these legislative changes are a win. Here’s why:

• Greater Transparency: Buyers now have access to more detailed and up-to-date information about a building’s condition and financial health.

• Informed Decision-Making: With improved depreciation reports, buyers can better assess whether a property is well-maintained or at risk of special levies.

• Long-Term Savings: Knowing the state of the reserve fund and planned maintenance reduces the likelihood of unexpected repair costs after purchasing.

What This Means for Sellers

While the changes bring transparency, they also create challenges for sellers:

• Increased Scrutiny: Potential buyers are likely to scrutinize depreciation reports more closely, especially for older buildings or those with underfunded reserves.

• Potential Leverage: Sellers in buildings with strong depreciation reports and healthy reserve funds can use this as a selling point to attract buyers.

What This Means for Strata Corporations

For strata corporations, the changes emphasize accountability and proactive planning:

• More Frequent Updates: Strata councils must budget for more frequent depreciation report updates and ensure they are comprehensive and accurate.

• Higher Standards: The enhanced requirements mean strata corporations must collaborate with certified professionals who understand the new rules.

• Increased Trust: Strata corporations with clear, compliant reports can build trust with both current owners and potential buyers, reducing disputes and enhancing property values.

How ENGIPRO Can Help

Navigating these legislative changes can be challenging, but ENGIPRO is here to help strata corporations, buyers, and sellers adapt. Here’s how we make it easier:

• Certified Professionals: Our team includes Professional Engineer (P.Eng.), Certified Reserve Planner (CRP), Professional Reserve Analyst (PRA), and Chartered Civil Engineer (CEng MICE) experts. We deliver reports that meet the latest legislative standards and provide reliable guidance for long-term financial planning.

• Fast Turnaround: We provide comprehensive depreciation reports within 30 days, helping you stay compliant and informed.

• Detailed Financial Analysis: Our reports include long-term projections, reserve fund analysis, and actionable recommendations tailored to your property’s needs.

  
  

Want to know how much a depreciation report will cost? Use our price calculator for an instant estimate, or contact us today for expert advice.

Conclusion

B.C.’s depreciation report legislation changes aim to create a more transparent and accountable real estate market. For buyers, sellers, and strata corporations, these updates underscore the importance of detailed, accurate depreciation reports. By staying compliant and working with a trusted partner like ENGIPRO, you can navigate these changes with confidence and ensure your property remains financially sound.

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External Links:

1. Strata depreciation report requirements - https://www2.gov.bc.ca/gov/content/housing-tenancy/strata-housing/operating-a-strata/repairs-and-maintenance/depreciation-reports/depreciation-report-requirements

2. BC Strata Property Act - https://www.bclaws.gov.bc.ca/civix/document/id/complete/statreg/98043_01

3. BC Reserve Fund Planning - https://www2.gov.bc.ca/gov/content/housing-tenancy/strata-housing/operating-a-strata/finances-and-insurance/the-contingency-reserve-fund-crf

4. BC Housing Depreciation Report Guidelines - https://www2.gov.bc.ca/gov/content/housing-tenancy/strata-housing/operating-a-strata/repairs-and-maintenance/depreciation-reports

5. BCFSA Depreciation Report Guidelines - https://www.bcfsa.ca/industry-resources/real-estate-professional-resources/knowledge-base/advisory/strata-property-regulation-changes-strata-depreciation-reports