In 2023 and 2024, several changes have been seen in Depreciation Reports legislation.
Mandatory Reports
Several issues have changed, but one of the most important is mandatory reports, which means the ability to defer has been removed. This moves the legislation closer to other provinces in Canada and the USA.
Effective July 1, 2024, all strata corporations with five or more lots must obtain a depreciation report on a five-year cycle; those with four or fewer lots continue to be exempted.
Strata corporations may no longer hold an annual ¾ vote to defer getting a depreciation report. Strata corporations in Metro Vancouver, the Fraser Valley, or the Capital Regional District without depreciation reports or depreciation reports received before December 31, 2020, will have until July 1, 2026, to get a report.
Strata corporations in all other areas will have until July 1, 2027, to get a report.
Effective July 1, 2025, strata corporations must obtain depreciation reports from six designated professions: engineers, architects, applied science technologists, accredited appraisers, certified reserve planners, and quantity surveyors.
New strata corporations established on or after July 1, 2024, but before July 1, 2027, must get a depreciation report within two years of the strata corporation's first annual general meeting and every five years after that.
The regulations have added to the content required in depreciation reports, including an executive summary and (if applicable to the strata corporation) air conditioning and ventilation.
E.V. Charging Stations (EVCS Reports)
On April 6, 2023, the Government proposed significant changes to the Strata Property Act in Bill 22/2023 to make it easier for strata corporations and owners to install electric vehicle charging stations (EVCS). This was passed on May 11, 2023. This is an issue for Depreciation Reports as they include uncertainty in the planning.
Strata Corporations must plan for the needs of owners and residents. New Federal requirements require all new passenger car and truck sales to have zero emissions by 2035. In 2019, the province passed the Zero-Emission Vehicles Act, which aims for 10% of all new light-duty cars and trucks sold in B.C. to be zero emission by 2025. By 2040, they'll all need to be emission-free. As a result, B.C. legislators have legislation waiting to be enacted to create a "right-to-charge."
Upon request, Strata Councils will have to get an electric vehicle charging report to know if installing these E.V. stations is possible and the cost. The installation of these E.V. stations can require a substantial amount of work and cost.
Concerning infrastructure, most people only see the charging station in a parking stall. This is just the end portion of several parts to a system and can include multiple electrical and communication conduits, new transformers to accommodate increased power requirements, independent monitoring systems to account for the cost of individual power usage, visitor parking EVCS Systems with an attached point of sales terminal and the list goes on.
To make the expense of upgrading the electrical system and installing E.V. charging stations easier to pass, one includes lowering the voting threshold from 75% to 50% for approval of the costs and changes to the property needed to install them.
Given the limited money most Strata Corporations have and the choice between new roofs or E.V. stations for the minority of occupants, I believe reaching the 50% threshold will be challenging in the next few years.
Impact on Depreciation Report Providers
It would be inappropriate for providers to include engineering reports for consultants to do the planning report, but never mind the actual electrical upgrading work, without an indication from the Strata Council. However, providers cannot ignore the demand for E.V. stations from the federal and provincial emissions legislation.
Strata Councils should ask the providers how this will be handled. Unless the Council notifies me that an EVCS report is planned, many providers will project that a report will be completed at a low expense year between 2024 and 2030, in keeping with legislation and vehicle sale targets.
It must be remembered that only one request can trigger a requirement to get a report. Several planning reports may be undertaken before the electrical upgrading work is completed as votes fail and costs change. I do not think that many Owners will vote to upgrade the entire electrical system at the cost of hundreds of thousands of dollars during the years 25-35 or 55-65 of a building's life, as this is a period of high expected costs, like replacement of roofs. Councils should work with the provider to determine the best time to account for this one-time cost as the demand increases in the complex.
Electrical Planning Reports (EPR)
On December 6, 2023, a new regulation concerning Electrical Vehicle Charging and Electrical Management Reports, otherwise known as Electrical Planning Reports (EPR), was introduced without notice. The regulation aims to determine Strata Corporations's current electrical requirements, peak electrical load, ways to offset electrical requirements, and the complex's ability to meet future demands for EVCS, heat pumps and cooling, and electrical savings.
Many people are now frustrated, believing the EVCS report was a waste of time. However, that report aimed to determine the electrical requirements and calculate the cost of installing EVCS for all owners.
EPRs are designated to be informational and do not include transition costs, as there are different options for solving future electrical load requirements.
Impact on Depreciation Report Providers
EPRs are mandatory, so it is required that the Providers consult with the Strata Council for timing.
Minimum CRF Contributions
There was a change on January 24, 2023. This change will mean that the Statutory minimum for new and existing developments will be set at 10%. This was already something covered in all reports.
Do not forget about the Definitive book on Depreciation Reports
Depreciation Reports in British Columbia: The Strata Lots Owners Guide to Selecting Your Provider and Understanding Your Report.