Quick links
- BC Strata Housing: Strata depreciation report requirements
- BC Strata Housing: Choosing a depreciation report provider
- Learn about managing repair projects: Strata maintenance guides
- VISOA webinar: Depreciation report requirements
What is a depreciation report?
A depreciation report contains valuable information to help strata owners, prospective purchasers, and mortgage and insurance providers understand what the strata corporation is responsible to repair, maintain, and replace. A qualified professional determines the expected life of each item, sets out a timeline for repair and replacement, and estimates the costs over a 30-year timeframe with funding models as examples. This helps the strata prepare a long-term maintenance plan and determine how much money to contribute to the contingency reserve fund (CRF) each year to avoid special levies.
Strata Property Act (SPA) s. 94 says:
(1) In this section, “qualified person” has the meaning set out in the regulations.
(2) Subject to the regulations, a strata corporation must obtain from a qualified person, on or before the dates determined in accordance with the regulations, a depreciation report estimating the repair and replacement cost for major items in the strata corporation and the expected life of those items.
(3) [Repealed]
(4) A depreciation report referred to in subsection (2) must contain the information set out in the regulations.
Who is qualified to write the report?
Regulation 6.2(0.1) says a “qualified person” is a person who has the knowledge and expertise to understand the individual components, scope and complexity of the strata corporation’s common property, common assets and those parts of a strata lot or limited common property, or both, that the strata corporation is responsible to maintain or repair.
For reports obtained by June 30, 2025, there are no other requirements to be considered a qualified person.
For reports obtained on or after July 1, 2025, the person must be one of the following:
- A professional engineer registered as a member in good standing with the Association of Professional Engineers and Geoscientists of the Province of British Columbia
- A person registered as an architect with the Architectural Institute of British Columbia
- A person registered as an applied science technologist under the Professional Governance Act
- A person designated Accredited Appraiser Canadian Institute by the Appraisal Institute of Canada
- A certified reserve planner as accredited by the Real Estate Institute of Canada
- A person designated Professional Quantity Surveyor by the Canadian Institute of Quantity Surveyors
What information is in the report?
A depreciation report must include all of the following:
- An inventory of the physical components and evaluation of those components based on an on-site visual inspection
- A summary of the repair and maintenance work for common expenses, that usually occur less often than once a year or that do not usually occur, over the next 30 years
- A financial forecast of the costs of the anticipated repairs for the next 30 years and how they might be funded
- The name of the person the strata is obtaining the report from, their qualifications, errors and omissions insurance (if any), and the relationship between that person and the strata corporation
- The date of the report and an executive summary
What’s in the inventory of physical components?
The physical components inventory and evaluation must include a description and estimated service life over 30 years of those items that comprise the common property, the common assets and those parts of a strata lot or limited common property, or both, that the strata corporation is responsible to maintain or repair under the Act, the strata corporation’s bylaws or an agreement with an owner, including, but not limited to, the following items:
- The building’s structure
- The building’s exterior, including roofs, roof decks, doors, windows and skylights
- The building’s systems, including the electrical, heating, ventilation, air conditioning, plumbing, fire protection and security systems
- Common amenities and facilities
- Parking facilities and roadways
- Utilities, including water and sewage
- Landscaping, including paths, sidewalks, fencing and irrigation
- Interior finishes, including floor covering and furnishings
- Green building components
- Balconies and patios, and
- Identify common property and limited common property that the strata lot owner, and not the strata corporation, is responsible to maintain and repair. (Stratas should check their records for all indemnity agreements that make owners responsible for repair and maintenance of something that would otherwise be the responsibility of the strata corporation.)
See regulation 6.2(1) and (2) for complete details.
What’s in the financial forecasting section?
In the financial forecasting section of the depreciation report, the author estimates the cost of maintenance, repair and replacement of the items identified in the physical component inventory. It is a projected cost over 30 years starting with the current or previous fiscal year. See regulation 6.2(3) and (4) for complete details.
This section includes 3 cash-flow models showing the anticipated expenditures and different levels of contributions to the CRF. The author must explain their assumptions such as interest rates and rate of inflation. These examples illustrate how decisions about how much to contribute to the CRF each year affects the frequency and amounts of special levies in coming years. The cash-flow models are guides only. It’s up to the strata council to recommend an appropriate level of contribution to the CRF in the annual budget to be approved by owners at the annual general meeting.
The forecasted amounts are broad estimates. Actual costs depend on market conditions at the time of the project including the costs of materials and labour, current Building Codes, and changes in the condition of the component. Typically actual costs could be 50% higher or lower. Strata councils should review the depreciation at least once per year and identify any upcoming projects. Council or the strata manager can then contact professionals and trades to obtain more detailed information to assess the life of the component and obtain bids. This could involve working with a professional to write specifications and prepare a tendering package to obtain bids.
Are all stratas required to obtain reports?
All stratas of 5 or more strata lots, including bare land stratas, must obtain depreciation reports.
Regulation 6.22 says that the requirement to obtain a depreciation report under SPA s. 94(2) doesn’t apply “in relation to a strata corporation if and for so long as there are fewer than 5 strata lots in the strata plan.”
How often do stratas have to get a report?
Regulation 6.21(2) says “a strata corporation must obtain a new depreciation report at least once every 5 years”. There is no ability to waive or defer it. In comparison, Ontario requires updates every 3 years.
Obtaining new depreciation reports gives council, owners, and managers up-to-date information which is vital when managing assets worth millions of dollars. Each depreciation report requires an evaluation of the components based on an on-site visual inspection. The condition of the roof, boiler, or parking areas may have fared better or worse than expected over the last few years. The financial forecasting section must also be updated. The cost of construction materials may have increased more than the assumed inflation rate in the financial models. The current amount in the CRF may be lower than expected due to emergency repairs or payment of insurance deductibles. Prospective purchasers, and mortgage and insurance providers will expect stratas to have new depreciation reports at least once every 5 years.
Can owners vote to waive it?
No. The SPA no longer allows a strata to waive or defer obtaining depreciation reports.
What are the deadlines to obtain reports?
A strata corporation is established on the date the strata plan is filed at the land title office. Stratas established before July 1, 2024 that have never obtained a report or its most recent depreciation report was obtained before December 31, 2020 must obtain their first report or a new report by the dates in regulation 6.21 below. It depends on where the strata is located in BC. The deadline is:
- July 1, 2026 for stratas in the Capital Regional District (map), Fraser Valley Regional District (map), and Metro Vancouver Regional District (map), other than islands within these districts that are accessible only by air or boat such as the Gulf Islands
- July 1, 2027 for the above islands and all other areas of BC
If the most recent depreciation report was obtained after December 31, 2020, the strata must get a new one within 5 years after the date of the report.
What’s the first deadline for new stratas?
Stratas established between July 1, 2024 and June 30, 2027 must get their first depreciation report within 2 years after the date of the first AGM.
Stratas established on or after July 1, 2027 must get their first depreciation report within 18 months after the first AGM.
How does a strata pay for the report?
Under SPA s. 92 and 96, the cost to obtain a depreciation report or get a new one can be paid from either the operating fund or the CRF. These decisions require a majority vote approval of owners at an AGM or SGM.
How much does the owner developer have to contribute?
Under SPA s. 12 an owner developer must establish a CRF. The amount they must pay into the fund is set out in the regulations. This applies to all strata developments with any number of strata lots.
There is an additional requirement under regulation 6.23 for owner developers to pay money into the CRF to help with the expense of a depreciation report. This is required for strata developments established on or after July 1, 2027, with 5 or more strata lots shown on the filed strata plan.
The amount the developer must contribute to the CRF is $5,000 plus an additional $200 multiplied by the number of strata lots in the strata corporation or $30,000, whichever is less. For example:
- If the filed strata plan shows 10 stratas lots, the developer must contribute $7,000.
- If the filed strata plan shows 125 or more strata lots, the developer must pay $30,000.
The amount must be paid no later than the date of the strata’s first AGM. The actual cost of the report might be higher or lower than the contribution from the developer. However, the requirement ensures that new strata corporations have some money to help pay for their first depreciation report. It’s recommended that the council choose a depreciation report provider that is not associated with the developer so the report gives an independent assessment of building components and systems.
The cost to obtain the first depreciation report can be paid from either the operating fund or the CRF. The agenda for the first AGM is prepared by the developer. It’s recommended that the developer include a resolution in the notice of the AGM to pay for the first report from the CRF. If the notice does not include this item, the new council could call an SGM to vote on a resolution to approve the expenditure from the CRF. In most cases owners will prefer an expenditure from the CRF so that they can use the funds from the developer.
Alternatively, owners could approve a budget at the first AGM with increased strata fees that allow for an expenditure from the operating fund to obtain a depreciation report. If the budget presented doesn’t include this category, a voter can make a motion from the floor to amend the operating budget. SPA s. 103 requires that the budget be approved by majority vote.
Member-only Resources
Log in to your account to access the following resources:
- Depreciation report requirements (webinar transcript)
- Coming soon: Information to gather for your depreciation report provider (check list)
