Author: BC Government

Strata depreciation report requirements

Publication date: April 22, 2024

Under B.C.'s Strata Property Act and regulations, all strata corporations with five or more strata lots must obtain depreciation reports. Strata corporations may no longer defer getting a depreciation report by holding an annual 3/4 vote. Strata corporations will have time to meet this requirement.

Learn more on this page:
Purpose of depreciation reports
Overview: updated regulations
Content requirements
Qualifications for report providers
Access to and retention of reports

Purpose of depreciation reports

Strata corporations are legally required to repair and maintain common property. A depreciation report tells a strata corporation what common property and assets it has and the projected maintenance, repair and replacement costs over a 30-year time span.

Common property is not just buildings. Common property and assets can also include landscaping, roads, recreational amenities and many other items. All strata corporations including bare land strata corporations (sometimes referred to as “strata subdivisions”) with five or more strata lots will also have to obtain depreciation reports on a five-year cycle. Bare land strata corporations are usually responsible for the long-term repair and maintenance of subdivision infrastructure including roads, water, electricity, and sewage.

The depreciation report helps strata lot owners protect their homes and investments and avoid being surprised by unexpected special levies. The report also provides valuable information to prospective buyers, mortgage and insurance providers.

Overview: updated depreciation report regulations

Effective July 1, 2024, the Province has strengthened requirements for strata depreciation reports as per OIC 204-2024 (deposited April 22, 2024).

• All strata corporations with five or more lots must obtain a depreciation report on a five-year cycle; strata corporations with four or fewer lots continue to be exempted

• Strata corporations may no longer hold an annual ¾ vote to defer getting a depreciation report

• Strata corporations without depreciation reports, or depreciation reports received prior to December 31, 2020, will have time to obtain depreciation reports:

  • until July 1, 2026, if located in Metro Vancouver, the Fraser Valley, or the Capital Regional District (excluding the Gulf Islands and other islands within the CRD)

  • until July 1, 2027, if located in other areas of British Columbia

• Effective July 1, 2025, strata corporations must obtain depreciation reports from six designated professions: engineers, architects, applied science technologists, accredited appraisers, certified reserve planners, and quantity surveyors

• New strata corporations established on or after July 1, 2024 but before July 1, 2027, must get a depreciation report within two years of the strata corporation’s first annual general meeting and every five years thereafter

• As of July 1, 2027, owner developers will provide some funding towards the first depreciation report for new strata corporations with five or more lots: a minimum of $5,000 plus $200 per strata lot to a maximum of $30,000. Accordingly, strata corporations established on or after July 1, 2027, must obtain a depreciation report within 18 months of the strata corporation’s first annual general meeting

The regulations have added to the content required in depreciation reports: an executive summary, and (if applicable to the strata corporation) air conditioning and ventilation. 

Content requirements

As per Strata Property Regulation 6.2, a depreciation report must have certain content.

Physical component inventory and evaluation

A depreciation report must include a physical component inventory and evaluation of components which must:

• be based on an on-site visual inspection of the site and, where practicable, of the components conducted by the person preparing the depreciation report

• 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 Strata Property Act, the strata corporation's bylaws or an agreement with an owner

Items to be reviewed include (but are not limited to):

• the building structure

• the building exterior including roofs, roof decks, doors, windows and skylights

• the building systems, including the electrical, heating, ventilation, air conditioning, plumbing, fire protection and security systems

• common amenities and facilities (for example: pool, exercise room, guest house etc)

• 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

The list above is not a complete list; and not every strata corporation will have all of the components listed above. The list will vary by strata corporation. For example, some strata corporations have building structures they are responsible for repairing and maintaining, others do not. Some strata corporations will have water utilities they are responsible for repairing and maintaining, others do not.

The depreciation report must also identify those parts of the common property and limited common property, if any, that individual strata lot owners are responsible to repair and maintain. For example, patios and balconies that are designated limited common property in a high-rise "condo tower".

Financial forecasting section

Depreciation reports must also include a financial forecasting section to help the strata corporation, and owners, to plan for the repair and maintenance of common property and assets.

The financial forecasting section must include:

• The anticipated maintenance, repair and replacement cost for contingency reserve fund common expenses (expenses that usually occur less often than once a year or do not usually occur) projected over 30 years and the factors and assumptions used, including interest and inflation rates.

• At least 3 cash-flow funding models for the contingency reserve fund over 30 years. Cash flow models could include: the contingency reserve fund, special levies, increased strata fees, borrowing or some combination of these. The models must include projected inflation rates and the interest generated from money invested in the contingency reserve fund (CRF). Note: the models are provided in the report for consideration by the strata corporation, they do not have to be adopted.

• The current balance of the contingency reserve fund (CRF), minus any expenditures that have been approved but not yet taken from the fund, and how the CRF is currently funded.

Depreciation reports must also include:

• A summary of the repair and maintenance work for common expenses that occur less often than once year (i.e. contingency reserve fund expenses)

• The date of the report

• Any other appropriate information or analysis that the strata corporation or the person providing the depreciation report considers appropriate

• An executive summary

Qualifications for report providers

Effective July 1, 2025, the Strata Property Act and regulations specify six professions which can prepare depreciation reports. These six professions are: engineers, architects, applied science technologists, certified appraisers, certified reserve planners, and quantity surveyors.

When obtaining a depreciation report, strata corporations should choose a provider from the designated professions that has experience with their type of strata corporation. For example, the knowledge and expertise required to prepare a depreciation report for a six-plex will be considerably different than the knowledge required to prepare a depreciation report for a high-rise residential “condo” tower with its own power generating plant, sections, and underground parkade. 

The regulations continue to require that the person (note: the word “person” used in the regulations is a legal term and can mean either an individual or a company) preparing the depreciation report have the knowledge and expertise to:

• understand the scope and complexity of the strata corporation's common property and common assets

• understand the individual components

• understand the strata corporation’s bylaws and any agreements entered into with owners respecting common property and strata lots

• prepare a depreciation report that complies with the regulations including  a physical component inventory and evaluation and financial forecasting

The depreciation report must include the name of the person from whom the depreciation report was obtained and a description of:

• that person's qualifications

• the error and omission insurance, if any, carried by that person

• the relationship between that person and the strata corporation

Access to and retention of reports

The most recent depreciation report, if any, must be attached to the "Form B: the Information Certificate" and provided to buyers.

Under Section 35 of the Strata Property Act, the strata corporation must retain:

• any depreciation reports obtained by the strata corporation under section 94 of the Strata Property Act

• any reports obtained by the strata corporation respecting repair or maintenance of major items in the strata corporation, including, without limitation, engineers’ reports, risk management reports, sanitation reports and reports respecting any items for which information is, under section 94 of the Strata Property Act, required to be contained in a depreciation report

• the records and documents referred to in section 20 or 23 obtained by the strata corporation. These are documents provided to the strata corporation by the owner developer.

References:
Strata Property Act sections: 1, 35, 59, 91-96, 98-101, 103, 105, 108, 109, 111, 158, 194, 195
Strata Property Regulation: 6.1-6.6, 6.11, 11.1-11.3

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