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What Does the Depreciation Report mean for Home Owners

The Provincial Government introduced mandatory Depreciation Reports to the Strata Property Act with the goal of improving the on-going upgrade, repair, maintenance process in BC by providing transparency and clarity for Strata Lot purchasers and owners alike. The complete scope of effects on the residential resale market will differ from building to building but looking at other provinces that have brought in similar regulations allows BC home owners some insight into what to expect here.

In the early 2000's Alberta introduced Depreciation Reports leading to the realization of many Strata Corporations that they did not have enough money in their contingency reserve funds. This resulted in either strata fees being increased, or more commonly a special levy being assessed to bring the contingency reserve fund up to where the where the Depreciation Report states it ought to be at. This led to a somewhat turbulent time in the condo market until these buildings, and contingency reserve funds were brought up to par. The medium and long term effects of these reports in Alberta and Ontario were that strata properties were being better maintained and purchasers had more clarity as to the health of the building and its' systems.

How these new regulations will effect the value of condos is going to differ from building to building in the short term as individual Strata Corporations adjust the way they conduct their budgeting and planning. In the long run, the introduction of Depreciation Reports in the BC condo market should have a positive impact. Buildings will be better maintained and purchasers will have more information at their disposal before making a decision.