What is a depreciation report and what should I look for in it?
A depreciation report is an inspection-based study of a strata building's major components, how much life each one has left, and what repairs will cost over the next 30 years, laid out in at least 3 funding scenarios. Every BC strata with 5 or more lots needs one, refreshed on a 5-year cycle.
What exactly does a depreciation report cover?
Four things. A real report makes all four easy to find.
An executive summary up front, in plain language, on the building's overall condition and what's coming.
A physical inventory of every major component: roof, building envelope, elevators, boiler, parkade membrane, and anything else common property. For each one, the report lists the material, the quantity, its current condition, its normal lifespan, its actual or estimated age, and when it'll likely need replacing along with the projected cost.
At least 3 cash-flow funding models for the contingency reserve fund (CRF), each projected 30 years out, with inflation and interest assumptions built in.
Photographs of the property's condition and a summary replacement schedule pulling the component list into one table.
What are the three funding models, and why should a buyer care?
The regulation requires a minimum of 3 cash-flow scenarios for how the strata pays for what's coming: relying on the reserve fund alone, adding special levies, raising strata fees, borrowing, or blending those. The engineer or appraiser who writes the report doesn't pick one. The strata council does, usually at an AGM.
This is the section I tell clients to read before anything else in the report. It's a forecast of your own future costs. If the model the strata actually adopted assumes fee increases that haven't happened yet, or relies on a special levy nobody's voted on, that gap is coming due on somebody's watch. Read what I wrote about how a special levy actually gets approved if you want to see how that vote works.
How is this different from the Form B or the reserve fund balance?
Three different documents, three different jobs. The reserve fund balance is one number: what's in the account today. The Form B is a snapshot of the strata's finances as of the date it's issued: fees, levies, that same reserve balance. The depreciation report is the only one of the three that looks forward. It's a 30-year physical and financial forecast, built from a site inspection.
A healthy reserve balance today tells you nothing about whether it'll cover the roof replacement the report says is 4 years out. You need the report to answer that.
What red flags should I look for in the report itself?
A handful of things separate a solid report from a sloppy one, according to the province's own guidance for strata councils reviewing these reports:
Inventory errors. Mistakes in the list of common property, or components wrongly assumed to be in uniform condition across every unit.
Unrealistic maintenance assumptions. Preventive maintenance genuinely extends an asset's life, but a projection that stretches this past what's realistic is a way to make the numbers look better than they are.
Cost anomalies. Any replacement figure that looks unusually high or low next to the rest of the table.
Template carryover. Information that looks copied from a different building's report and never fully updated for yours.
As a buyer, you can't audit the engineering yourself. You can flag any of these to your agent or a home inspector, and ask the strata council directly whether the report's been challenged or corrected since it was issued.
Who has to get one, on what cycle, and who pays?
Every BC strata corporation with 5 or more lots. Reports must be refreshed at least every 5 years. As of July 1, 2024, a strata can no longer vote annually to defer getting one.
Metro Vancouver, the Fraser Valley, and the Capital Regional District had a hard deadline: any strata still working off a report dated before December 31, 2020 had to get a current one by July 1, 2026. That date has passed. The rest of BC has until July 1, 2027.
For a brand-new strata being built now, the developer contributes toward that first report: a minimum of $5,000 plus $200 per strata lot, up to $30,000. After that first report, updates come out of the strata's own budget.
My honest read: buyers spend most of their attention on the Form B because it's short and has dollar figures right on the page. The depreciation report is longer and reads like an engineering document, so it gets skimmed more often. But the Form B tells you what's already been decided. The depreciation report tells you what's about to be decided for you, financially, years before a levy notice ever goes out.
Frequently asked questions
Who pays for a strata's first depreciation report?
For a new strata with 5 or more lots, the developer contributes a minimum of $5,000 plus $200 per lot, up to a maximum of $30,000, toward the first report. Every update after that is a cost the strata covers itself.
How often does a BC depreciation report get updated?
At least every 5 years. Stratas used to be able to vote each year to put it off. That option ended July 1, 2024.
Does the depreciation report come attached to the Form B?
Yes. A strata must attach its most recent depreciation report, current budget, and rules to the Form B Information Certificate when it's issued.
What if the report's funding model shows a levy is likely?
Treat it as a real number. Ask the strata council whether that funding model is the one they've actually adopted, and check recent meeting minutes for any vote or discussion already underway.
Can I trust a depreciation report that's several years old?
Check the date against the 5-year cycle first. If a Metro Vancouver strata's report predates December 31, 2020, it should already have been replaced under the July 1, 2026 deadline. An older report also reflects the reserve balance from whenever it was written, which may be well above or below where the account sits today.
Barton Lui is a REALTOR® with Real Broker in Vancouver. He works mostly with first-time buyers across Metro Vancouver and speaks English, Cantonese and Mandarin.
Digging into strata documents before you write an offer? See what strata documents to read before buying in BC and what is a special levy, and how to spot one coming, or book a consultation.
Reach him at 604-715-5568 or barton@bartonrealtor.com.
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