INNOVATION March-April 2012

towards creating a framework for the preservation of the strata common property, and to provide comprehensive disclosure of the building condition and the strata’s finan- cial ability to maintain the property to the homeowners and prospective buyers. This first step in BC opens the door to identifying to strata the real costs of maintaining their building asset in serviceable condition. That will hopefully lead to a change in the mindset of the strata to recognise that the reserve fund and its contributions will have a greater effect on the condi- tion of the property than the annual operating budget. The BC legislation is not intended to provide a framework for enforcement of the depreciation report preparation or its recommendations, but rather to allow the individual strata to decide how best to manage their property by allowing them to select the qualifications of the report provider and the associ- ated level of service. Also, the strata may or may not adopt the recommendations contained in the report. With that in mind, such an open framework may invite a wide variety of report formats and methodology. In the cases where similar format and methodology are followed in subsequent update reports, all is well; however if a dif- ferent company is commissioned to prepare the subsequent reports, the strata may misunderstand the intent of the different report approaches. Also as the site visit included with the report is not intended to be a technical audit, subsequent discovery of hidden or latent defects may cause

Other provinces have perhaps softer approaches and require the reports to be completed on 5 to 10-year recur- ring timeframes, and allow inexpensive economic updates (without site visit) of the previous report to be completed more frequently. The BC legislation does however allow the strata to defer having a report completed for 18 months by passing a reso- lution to that effect with a three-quarters majority vote. The key observation in the first few months after the pass- ing of the legislation is that some of the strata are somewhat overwhelmed by the cost and complexity of the task and choose to defer the report. Where the reports are deferred by the strata, the intent of the legislation and the substantial benefits to the strata and prospective buyers for having the report completed is defeated. The legislation does not require the strata to implement the financial plan presented in the report. The minimum requirements for the report are con- tained in broad terms in Section 6.2 of the Strata Property Regulation; however the purpose of the document is two-fold. Firstly, the report is to provide a life cycle analysis of: 1. The property that is the direct responsibility of the strata corporation to maintain and repair (common property); and 2. The property that is for the use of the individual strata lot owner (limited common property). Responsibilities for the maintenance and repair of the limited common property may be shared between the strata corporation and the individual strata lot owner. Those responsibil- ities are to be identified in the report as well. The life cycle analysis is to include a general condition assess- ment listing current repair or replacement estimates, estimated

considerable misunderstanding. Standardized Reports

As professional engineers, there may be ways that we can help to protect the interests of the public while carrying out our life cycle analysis of strata property.

remaining service life, and future anticipated replacement costs of each of the common property components, systems or assemblies. Secondly, the report is to provide a financial plan to assist the strata in being able to substantially meet the financial requirements presented in the common property life cycle analysis. The financial plan should present a reserve fund con- tribution schedule that is responsible and manageable for the strata lot owners. The BC legislation presents less prescript- ive requirements for the format of the report, and does not substantially identify the quali- fications of the person or company that may prepare the report as compared to legislation previously passed in other provinces. That contrasts sharply with the concise and comprehensive legislation respect- ing the required qualifications of persons preparing reports in the Saskatchewan Condominium Property Regulations, 2001, (Consolidated from Chapter C-26.1 Reg 2, amended to 2010) section 51 Reserve Fund Contributions, for example. It appears the purpose of the BC legislation is to take a small step forward

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