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Strata survey circulated by province

Audited financial statements and depreciation reports considered in public survey

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To improve the transparency and accountability of strata corporations, the provincial government is gathering feedback from some half a million strata owners through a Strata Property Act survey.

The survey's scope includes whether strata corporations should be required to audit financial statements, release depreciation reports, and provide better disclosure for purchasers regarding parking and storage.

"The issue of parking and lockers is important, but hair pulling," said Barry Burko, president of Summit Strata Management (SSM) in Whistler. "It's so difficult to keep track of who is in what locker, particularly if it has evolved over the years and had people moving around various lockers. As banal as it may seem, it's very tedious to undo 200 strata lots and make sure they are in the right ski locker."

Burko said that though there currently is no requirement to complete annual audits, SSM voluntarily submits to them for the peace of mind of both its management and clients.

"It's purely for selfish reasons," he said. "We suggest that it is done so that it provides us with some security in knowing that everything is where it should be and the money is where it should be and there is no impropriety going on.

"For the owners, I think they can probably take some comfort from the fact that an audit is being done by an independent party."

In a strata dominant industry like Whistler, the depreciation report requirement can be seen as a pro or a con depending on stance. The reports are used to ensure strata funds are set aside for infrastructure improvements and repairs. Without one, building strata could be caught short in case of an emergency.

"They have some value but when you see that in the tenth year you're going to have to replace the roof for $25 million people start to panic about the cost and the depreciation reports may make it more difficult in some cases for an owner to sell because it looks like an enormous amount of money required in the future," continued Burko.

"Our experience is that the reports are being written very conservatively and so they're frightening to look at.

"Having said that, the philosophy of many of the condominium hotels is that they would rather pay through a special levy to repair things than to make annual contributions to the contingency reserve fund.

"They are investors first and when they go to sell their unit the money they have deposited over all those years of owning it is not refundable."

A second public consultation concerning better ways to resolve disputes that inevitably arise in stratas is scheduled to take place later in 2011.

The survey will be available until March 7 at 4:30 p.m. To complete the survey, go to https://securesurveys.gov.bc.ca/welcomeALL.pl?SURVEYNAME=stratasurvey1

 

 

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