Depreciation Report BC: A Practical Guide for Strata Corporations

A depreciation report in BC is the document a strata council relies on to plan for roofs, windows, boilers, elevators and parkades long before they fail. It inventories the components the strata corporation must maintain, estimates how long each will last and what it will cost to repair or replace, and models how the contingency reserve fund (CRF) could pay for that work. This guide explains what the report contains, who needs one, what affects its cost, and how it connects to strata fees, the CRF and the year-end financial statements.

Key takeaways

• The BC Government says strata corporations with five or more strata lots must obtain a depreciation report on a five-year cycle; stratas with four or fewer lots are exempt.
• Since July 1, 2024, a strata can no longer defer the report with an annual three-quarter vote.
• Since July 1, 2025, only members of designated professional groups may prepare a depreciation report.
• The report looks 30 years ahead and includes at least three cash-flow funding models, which the strata considers but does not have to adopt.
• The report is planning evidence, not a financial statement; the auditor uses it when looking at the CRF but does not audit the engineering.

What a depreciation report is

The Strata Property Act and the Strata Property Regulation set the rules. In plain terms, the report answers four questions:

1. What common property and common assets is the strata corporation responsible for?
2. What condition is each component in, and how long is it likely to last?
3. What will repair or replacement cost, and when?
4. How could the CRF fund that work over the coming decades?

The BC Government describes the purpose as helping owners plan and pay for the repair, maintenance and renewal of common property over 30 years. The industry often calls it a "depro", but the legislation uses the term depreciation report.

Which strata corporations need one

According to the BC Government's page on depreciation report requirements:

• Strata corporations with five or more strata lots must obtain a depreciation report on a five-year cycle.
• Strata corporations with four or fewer strata lots are exempt.
• Since July 1, 2024, the option to defer the report each year with a three-quarter vote has ended.

The province also set catch-up deadlines for stratas that had no report, or whose last report was received before December 31, 2020, and first-report timelines for newly created stratas. These depend on the region and the date the strata was established. Our article on BC depreciation report requirements sets out those dates; your strata manager can confirm which apply to your corporation.

What the report must contain

The contents are set by regulation. The BC Government's summary lists:

Physical component inventory and evaluation

An inventory of the components the strata corporation maintains, based on an on-site visual inspection, with each component's estimated service life over a 30-year period. Where applicable, air conditioning and ventilation systems are included.

Financial forecasting

Projected repair and replacement costs over 30 years, with the factors and assumptions used, including interest and inflation rates.

Funding models

At least three cash-flow funding models for the CRF over 30 years. These can combine reserve contributions, special levies, fee increases and borrowing. The BC Government states that the models are provided for consideration and do not have to be adopted.

The fund and the provider

The current CRF balance, less any expenditures approved but not yet taken from the fund, and how the fund is currently financed. The report also includes an executive summary, the report date, a summary of CRF repair and maintenance work, and the provider's name, qualifications, any errors and omissions insurance and relationship to the strata corporation.

Who can prepare a depreciation report

Since July 1, 2025, the BC Government says only members of designated professional groups may provide depreciation reports. The province's list covers professional engineers and licensees, architects and architectural technologists, applied science technologists and certified technicians, Accredited Appraiser Canadian Institute designees, certified reserve planners, and Professional Quantity Surveyors. When councils request proposals, they should ask each provider to confirm which designation they hold.

What affects the cost

There is no set price for a depreciation report, and figures vary widely between providers and buildings. What drives the price is the amount of work:

• Size and number of components. A small townhouse complex has far fewer components to inspect and model than a high-rise with elevators, a parkade and complex mechanical systems.
• Building type. Wood-frame, concrete, mixed-use and bare land stratas need different expertise.
• First report or an update. A first report builds the component inventory from scratch; later reports can build on it, though each still needs an on-site inspection.
• Access and records. Drawings, maintenance logs, warranties, contractor reports and past invoices cut the time a provider spends reconstructing each component's history, so gather them before the provider starts.
• Scope. Extra funding scenarios or specialist reviews, such as the building envelope, add to the work.

Because the report now recurs every five years, many councils plan for its cost in advance. The cheapest proposal is not always good value; a report that understates future costs can leave the CRF short.

How the report shapes strata fees and the CRF

The depreciation report does not set fees, but it informs the budget owners approve at the annual general meeting. Two rules from the BC Government's guidance on the contingency reserve fund matter here:

• Minimum contribution. Since November 1, 2023, a strata corporation must contribute at least 10 per cent of its annual operating fund budget to the CRF each year, whether or not it follows a funding model.
• Spending votes. Spending from the CRF on work recommended in a depreciation report, or to obtain a report, needs a majority vote. Most other CRF spending needs a three-quarter vote, with exceptions for spending necessary to ensure safety or prevent significant loss or damage, and for insurance deductibles.

The BC Government also says the most recent depreciation report must be attached to the Form B Information Certificate given to buyers, so the report affects how buyers and lenders see the building.

Depreciation report vs reserve fund study

Alberta and Ontario use a different term, the reserve fund study, under their own condominium legislation, with their own timing and follow-up rules. The purpose is the same: plan long-term repair and replacement and fund it over time. For an Alberta comparison, see our guide to the Alberta reserve fund study.

How the depreciation report connects to the audit

A depreciation report looks forward at the building. Financial statements look back at what the strata corporation actually collected and spent. When a strata's statements are audited or reviewed, the CPA typically:

1. Obtains the current report and checks its date against the five-year cycle.
2. Compares the year's CRF contributions with the approved budget and the 10 per cent minimum.
3. Tests CRF spending for the approval required, such as a majority vote for work recommended in the report.
4. Agrees transfers between the operating fund and the CRF to the minutes.

The auditor does not audit the report's engineering estimates; those questions belong with the provider.

Common questions

Can a strata still vote to skip the depreciation report?

No. The BC Government says that since July 1, 2024, strata corporations can no longer defer the report with an annual three-quarter vote.

Does the strata have to follow the funding models?

No. The models are provided for consideration and do not have to be adopted, but the strata must still meet the minimum CRF contribution.

Our strata has four lots. Do we need a report?

No. According to the BC Government, strata corporations with four or fewer strata lots are exempt.

Does a depreciation report replace an audit?

No. The report plans future repairs; an audit or review gives assurance on the financial statements. Owners get the full picture by reading both.

Keep the records together

Condo Audit Pro gives a strata corporation one place to upload and keep its audit documents each year, including the depreciation report, with a checklist of what the CPA needs. Past audits stay in the corporation's account, so a new council can pick up where the last one left off. You can share the councils page with your auditor or watch a complete audit walkthrough. This article is general information, not legal or engineering advice.