Strata Year-End Financial Statements in BC

Year end is the point where a strata corporation's bookkeeping stops being an internal council matter and becomes a document owners, buyers and lenders read. The Strata Property Act and its Regulation are specific about when the numbers must be produced and what must be in them — and less specific than most councils expect about who prepares them.

What the Act requires at year end

There are two distinct obligations, and self-managed councils frequently collapse them into one:

• Within 8 weeks after the end of its fiscal year, the strata corporation must prepare a financial statement updated to the end of the fiscal year — Strata Property Regulation s.6.7(2).
• The proposed budget for the coming year must be distributed with the AGM notice and must be accompanied by a financial statement — Strata Property Act s.103. Section 45 repeats the point: notice of an annual general meeting must include the budget and financial statement referred to in s.103.

Notice of a general meeting must be at least 2 weeks (s.45(1)). Watch the delivery method: notice sent by email, mail or fax is conclusively deemed received four days after it is sent, so an emailed AGM package realistically has to go out about 18 days ahead. Only notice handed to the person or left at the strata lot counts on the day it is delivered.

What must be in a strata financial statement

Regulation s.6.7(1) sets the content, measured as of a day within the 2-month period before the AGM date:

• the opening balance in the operating fund and the current balance;
• the opening balance in the contingency reserve fund and the current balance;
• details of income from all sources, except special levies;
• details of expenditures out of the operating fund, including details of any unapproved expenditures under s.98;
• details of expenditures out of the contingency reserve fund, including details of any unapproved expenditures under s.98;
• income and expenditures, if any, by special levy under s.108.

That s.98 line matters. Section 98 lets a strata spend without owner approval from the operating fund up to the limit in its bylaws (or, if the bylaws are silent, the lesser of $2,000 and 5% of the annual operating-fund contribution), and from either fund where there are reasonable grounds to believe an immediate expenditure is necessary to ensure safety or prevent significant loss or damage (Province of BC — contingency reserve fund). Those expenditures are legitimate, but they must be shown as such in the statement rather than folded quietly into a category total.

Because the statement is struck at a date within two months before the AGM, the version owners see with the notice will often cover a partial year. The version required within 8 weeks after fiscal year end is the true year-end picture. Both exist; neither replaces the other.

Questions councils actually ask

Do BC strata financial statements have to be audited? The Regulation prescribes content, not verification. Nothing in s.6.7 requires an independent audit or review engagement. Whether your strata obtains one depends on your own registered bylaws or a decision of the owners — check the filed bylaws before promising owners an audit you are not required to deliver.

Can we distribute a summary instead of the full detail? Only if you have a bylaw for it. Section 6.7(3) allows a strata to provide, by bylaw, that the income and expenditure details go out with the AGM notice in summary form. But s.6.7(4) is unforgiving: despite that bylaw, a statement complying with s.6.7(1) must be placed before the annual general meeting. And under s.6.7(5), anyone entitled to AGM notice who asks between the notice date and the meeting must promptly be given a copy of the full statement.

What if owners defeat the budget? Under s.104, the strata must prepare a new budget within 30 days — or a longer period approved by a 3/4 vote at that meeting — and put it to a special general meeting for approval by majority vote. Owners keep paying the same monthly strata fees set under the previous budget until the new one passes, and interim spending from the operating fund is limited to s.98 or to the recurring categories and maximums in the previous budget.

Can we move our fiscal year end? Yes, by a 3/4 vote at an annual or special general meeting held after the first AGM (s.102), which produces a transitional budget period of more than 12 but less than 18 months, or less than 12 but more than 6 months.

Year end in a brand-new strata

For a first fiscal year, the owner developer must give the strata corporation a financial statement updated to the date the first annual budget takes effect (or, if no budget passes, the date of the first AGM) within 8 weeks after that meeting — s.21(6). Control of the strata's money transfers to the newly elected council within one week after the first AGM (s.22), and for two years the developer must keep the pre-transfer financial records, make them available for inspection free of charge on request, and let the strata copy or audit them at the strata's expense (s.23).

Turning the statement into next year's budget

Year-end numbers are the raw material for the coming budget: the actual operating variances, the CRF balance, and the arrears you carried into the new year. Three things to line up:

• The CRF minimum. Every strata corporation and section must budget an annual contribution of at least 10% of the total budgeted operating-fund contribution, determined after considering the most recent depreciation report (Province of BC — budgeting and strata fees). The old "stop contributing at 25%" rule is gone.
• The depreciation report. Its funding models should inform the CRF line — see how to read a depreciation report, then work the figures into your annual budget.
• Receivables. Unpaid fees distort the income picture; see collecting strata fee arrears in BC.

Retention is finite, not forever: books of account, budgets and financial statements, and minutes must be kept for at least 6 years under Regulation s.4.1. Keeping ledgers, minutes and approved expenditures in one place year-round — the kind of recordkeeping ManageStrata is built for — makes the 8-week statement an export rather than an archaeology project. Owners and buyers comparing several years of statements at once often run the documents through a tool like SearchStrata for AI analysis of strata documents.

This article is general information about BC strata law, not legal advice; verify against the current Strata Property Act and Regulation or consult a BC strata lawyer.