Beware of condos without depreciation reports
Published Monday, May 16, 2016 6:00AM PDT
Last Updated Monday, May 16, 2016 7:24PM PDT
There are several condos in Metro Vancouver that are in need of repair or major work. In some cases, owners are going to the courts to get an administrator appointed in order to force the work to be done.
In 2011 the province updated its regulations, requiring strata corporations to obtain depreciation reports on their buildings every three years. The intent was to make sure that the buildings would be properly maintained and safe. However, the policy doesn’t force the strata councils to do the necessary work.
“It’s always short sighted not to repair something before it fails,” warned Tony Gioventu, executive director of the Condominium Homeowners Association of B.C.
He estimates that every year of delay adds an extra 10 to 15 per cent to the cost of repair. In fact, he said, if repairs are delayed too long the costs could double.
If reserves aren’t maintained for future work, special assessments need to be levied. But it takes 75 per cent of the strata to approve those assessments, and getting approval has become an issue.
Some condo complexes have even voted to forgo obtaining depreciation reports. It takes 75 per cent of the strata to vote for an exemption.
“The real tragedy about this of course is people today, in the last few years who bought into these developments and who were unaware of the history,” said Gioventu. “Levies in some of buildings that have not been repaired, that should have been repaired 10 or 15 years ago, are going to be anywhere between 40 and 80 thousand dollars a unit.”
If you are looking to buy a condo, make sure to ask for the Form B outlining business disclosures involving the strata. It will include a depreciation report, if one was done. You should also ask for engineering and environmental reports.
Potential buyers should read over copies of the minutes of the strata meetings to see what’s been discussed and what hasn’t. It can give you a glimpse into the minds of the owners and how they maintain their investment.