The Office of Housing and Construction Standards has advised that the new Strata Property Act regulations for depreciation reports and Form B (the Information Certificate) have been made and that certain previously passed amendments to the Act have been brought into force.

The new regulation is available at www.housing.gov.bc.ca/st rat a/regs/OIC-SPA.pdf. Additional information is available at the Strata Property website www.housing.gov.bc.ca/strata/regs/index.html updated strata property guides are expected in February 2012.

These amendments were made with extensive consultation with the strata community, including strata associations, strata lot owners, professionals, legal experts and the public.

Depreciation Reports Highlights

• Given the wide range of strata properties, strata corporations will have the flexibility to select the person or team best suited to analyze their particular property. The regulations require that the depreciation report provide the person’s name, qualifications, whether they have errors and omissions insurance and their relationship to the strata corporation.
• Strata corporations are not required to fund contingency reserve funds (CRF) above the minimum previously required (25% of the operating budget). However, strata owners may now make any additional contributions to the CRF by simple majority vote. (Previously, an annual ¾ vote was required to make contributions to the CRF above 100% of the operating budget.
• the legislation and regulations are only one component of depreciation reports. education and best practices will also provide information on: selecting a qualified person or team; formatting and presenting a report; securing materials electronically to facilitate regular updating; and best practices in maintaining, repairing and funding common property and limited common property.

Form B overview

the form b has been revised to improve disclosure:

• By January 1, 2014, strata corporations will be required to provide additional information to prospective purchasers on parking and storage allocated to the strata lot.
• As well, by March 1, 2012, strata corporations must attach: copies of the strata corporation’s rules; the current budget; the owner developer’s Rental Disclosure Statement, if any; and the most recent depreciation report, if any. With the exception of the depreciation report, none of these requirements are new.

If they choose to do so, strata corporations may use the revised Information Certificate sooner than the required dates.

Regulations for audited financial statements are expected next year. The consultation process identified some timing issues that need to be addressed.

Please feel free to share this information with others you think may be interested. Any updates will be posted to the Strata Property webpage.

Average Performance for Housing Market in 2012
BCREA 2012 First Quarter Housing Forecast Update

The British Columbia Real Estate Association (BCREA) released its 2012 First Quarter Housing Forecast Update today.
“Modest economic growth at home and abroad is expected to limit growth in consumer demand both this year and in 2013,” said Cameron Muir, BCREA Chief Economist.

BC Multiple Listing Service® (MLS®) residential sales are forecast to increase 2.1 per cent from 76,817 units in 2011 to 78,400 units this year, increasing a further 2.7 per cent to 80,500 units in 2013. The 15-year average is 79,000 unit sales. A record 106,310 MLS® residential sales were recorded in 2005.

"While European sovereign debt concerns and a sluggish US economy will continue to impact consumer confidence, strong demand in the bond market is expected to keep mortgage interest rates at or near record lows for most of 2012,” added Muir.

Home prices in most BC markets are forecast to experience little change over the next 24 months as the supply of homes for sale more closely matches consumer demand. The average MLS® residential price in the province is forecast to edge down 2.2 per cent to $548,500 this year and remain relatively unchanged in 2013, albeit increasing 0.8 per cent to $553,000.

Bank of Canada keeps interest rates on hold

The Bank of Canada kept its trend-setting Bank Rate at 1.25 per cent on January 17^th, 2012. This marks the 11^th consecutive policy meeting in which borrowing costs have been left unchanged.

While recognizing that the outlook for the global economy had deteriorated and that uncertainty had increased since it released its October Monetary Policy Report (MPR), the Bank also made those same observations at its previous meeting on December 6^th.

Economic growth in Canada had more momentum in the second half of 2011 than the Bank projected in its October MPR, but it expects the pace going forward to slow by more modest than previously expected, due largely to factors outside Canadian borders. This reiterates statements made in December 2011. On the upside, the Bank said that “very favourable financing conditions are expected to buttress consumer spending and housing activity.”

The Bank releases its updated forecast for Canadian economic growth. It now estimates that the economy grew by 2.4 per cent in 2011 compared to the initial estimate of 2.1 per cent, owing to the better than expected end to the year.

The Bank projects growth of 2.0 per cent in 2012 compared to 1.9 per cent in the October MPR, and 2.8 per cent in 2013, down slightly from the previous 2013 forecast of 2.9 per cent, with the big picture being that past and current growth estimates have been revised upward at the expense of future economic growth.

“The Bank said it expects the pace of growth going forward to moderate by more than initially thought, but the forecast for growth this year has actually been raised slightly,” said CREA Chief Economist Gregory Klump. “That reflects a weaker than previously expected growth profile for the first half of 2012, followed by an acceleration in the second half of the year.”

“The Bank reiterated that its outlook remains subject to downside risks from the sovereign debt issue in Europe. Recent credit-rating downgrades to much of the euro zone point to potential contagion by way of a drop in financial market liquidity,” he added. “The bottom line is that the Bank rate is not going to be going up anytime soon, and we may see rates lowered should downside risks materialize.”

The Bank noted that “while the economy appears to be operating with less slack than previously assumed, it is only anticipated to return to full capacity by the third quarter of 2013, one quarter earlier than was expected in October.” Overall, inflation expectations remain “well-anchored.”

A number of financial institutions have recently dropped their five-year lending rates to a record low of 2.99 per cent. This is down considerably from the advertised five-year rate of 5.29 per cent when the Bank last met on December 6^th, 2011.

The Bank will make its next scheduled rate announcement on March 8^th, 2012.

http://creastats.crea.ca/natl/interest_rate_trends.htm