Under the Strata Property Regulation, a Depreciation Report must include at least three different cash-flow-funding models for current and future maintenance and repairs identified in the report. 1 These models may include withdrawals from the contingency reserve fund, special levies and borrowing. 2
When it comes to choosing which cash-flow-funding model to follow, the selection and implementation of any specific funding model will be subject to the regular budgetary and expenditure approval processes contained within the Strata Property Act.
For example, if the chosen funding model calls for increased contingency reserve fund contributions, this can be achieved through changes to the annual budget, requiring majority vote approval. Alternatively, funding can occur through special levies or borrowing funds in the name of the strata corporation, requiring 3/4 vote. Although a strata council may recommend or choose one funding model over another, all major expenditures are subject to owner approval in accordance with the Strata Property Act.