During my time in the industry I have asked the insurance providers why they are not lobbying the government to make it mandatory for all owners to have insurance, and to fully fund the depreciation report, they said it was not their role. This is not the solution but it goes in the right direction, as current level of strata fees fail to provide the required funding for maintenance in BC.
Strata Councils and owners choose not to repair items due to lack of funding or ability to pay a levy which later becomes insurance claim, there is no guarantee the new building will not take this same approach moving forward, which creates the same risk to the providers to insure new buildings. Why do owners and councils make this decision, they can’t afford the increased strata fees, or the special levy fees. This means people can’t afford the home they live in.
Multiple changes to the Strata Property Act are required to help change this issue moving forward. First, developers should be required to provide the first depreciation report when a new building is constructed and strata fees should be based on the costs of fully funding that report. This will give buyers a true cost of maintaining the building. Fully funding the report should be a requirement for every Strata Corporation to ensure they have the resources to perform the repairs as needed.
All owners should be required to have homeowners insurance for their strata lot equivalent to having car insurance which would assist with smaller claims and provide an easier subrogation for the providers to recoup their losses.
Is it time to change the requirements of council participation? Lack of maintenance is directly correlated to council and owner decisions. Often decisions are made based on what “individuals” can afford not building needs. Owners fail to understand the maintenance cost for the building comes from only one source, their pockets. I have seen many decisions for repairs be rejected and or not put forward due to council and owners feeling they can’t afford the repair. The problem then increases in severity and the cost increases to repair the issue when it fails in an emergency causing an insurance claim. Maybe, it’s time to change the act to provide a combination of owners and professionals on Strata Corporation councils and limit the owners ability to turn down necessary repairs. This would be a difficult process and fully funding the depreciation report could provide the resources for Strata Corporations to complete necessary repairs. Maybe council’s should be required to have professionals like an engineer and accountant as part of their council to review materials.
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