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Amendments will better protect B.C. strata owners, lessen insurance costs

By Richmond Sentinel

Published 12:42 PST, Tue January 24, 2023

Amendments to the minimum amount developers and strata corporations must contribute to contingency reserve funds will help protect owners in the small number of stratas that are neglecting maintenance needs and risking higher insurance costs.

“People living in stratas deserve to have peace of mind that their strata corporation has appropriate reserves to do routine maintenance and keep strata insurance costs down,” said Ravi Kahlon, Minister of Housing. “The overwhelming majority of stratas are doing just that, but a small number of strata corporations that are underfunding their contingency funds and putting owners at risk of surprise fee hikes and higher insurance costs. While the vast majority of strata corporations are already meeting these requirements, we're ensuring that those outliers are taking steps to protect themselves.”

In 2020, the province introduced changes to the Strata Property Act to help stratas better manage strata insurance costs, including enabling these regulatory changes.

Strata corporations in B.C. are required to have a contingency reserve fund (CRF) to pay for infrequent common expenses, such as maintenance work and emergencies. These new rules will increase the minimum amount that developers and strata corporations are required to contribute to a CRF, from five per cent to at least 10 per cent of the annual operating expenses every year. These changes will take effect on Nov. 1.

“The value of adequate contributions to the contingency fund and a well-implemented depreciation report for planning is critical in protecting a strata corporation's assets and reducing the risk of future special levies,” said Tony Gioventu, executive director, Condominium Home Owners Association of B.C. “The minimum developer contribution sets a better starting place for long term funding, and the disclosure of the insurance certificate in a Form B provides buyer awareness of current insurance exposure to costs and deductible amounts.”

The new minimums were set with the advice of strata managers and homeowner representatives. According to strata industry experts, the vast majority of approximately 34,000 strata corporations in the province exceed this minimum amount and will not be affected by this change.

BC Financial Services Authority advised in its December 2020, Report on the State of Strata Property Insurance in British Columbia, that improved maintenance and risk-mitigation practices are needed to reduce more pressure on premiums and deductibles.

Developers are required to include a CRF contribution in a new building's interim budget, which under these changes will need to be equal to at least 10 per cent of the operating expenses. This will prevent developers from advertising unrealistically low strata fees to prospective buyers, and avoid unexpected increases in strata fees in the building's first years.

For the small number of strata corporations that need to contribute more funds to their CRF to meet the new minimums, this will reduce their risk of strata insurance claims and premium increases, and significant special levies on short notice.

“Everyone has a role to play in keeping the strata insurance industry in a healthy state, and that includes strata owners contributing enough to their contingency funds to ensure that their buildings are adequately maintained,” said Chuck Byrne, chief operating officer, Insurance Brokers Association of BC. “Requiring strata corporations and developers to make a 10 per cent contingency fund contribution is a smart move that will better prepare owners for any unexpected expenses and help prevent increased insurance rates down the road.”

The province is also enacting changes to the Form B Information Certificate. A summary of the strata corporation's insurance coverage must be included in the form, effective April 1. This will make it easier for prospective buyers and strata owners to know whether the property is adequately insured, and the amount of insurance individual owners need to purchase.

For more information about the 2020 amendments to the Strata Property Act and Financial Institutions Act, visit

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