A BC strata depreciation report is the 30-year financial plan for the common property of your building. Done well, it tells your council what's coming, when, and what you need to have saved to pay for it. Done poorly, or ignored, it's the single biggest source of mid-size special levies that blindside owners.
This post covers what the Strata Property Act requires, what a real report contains, how to read the funding plan, and the red flags that reveal an underfunded Contingency Reserve Fund.
Key takeaways
- Required: Section 94 of the Strata Property Act requires a depreciation report every five years for strata corporations of five units or more.
- Cost: Roughly $4,000 for small townhouse complexes, up to $15,000+ for a high-rise. Paid from operating budget or a one-time levy.
- Produced by: A certified provider (engineer, appraiser, or qualified consultant). Not the management firm.
- Contains: Component inventory, expected remaining life, replacement costs, and three or more funding scenarios covering a 30-year window.
- Must read: Every council member, cover to cover. The summary is not enough.
What a depreciation report actually is
A depreciation report, sometimes called a reserve fund study, is a technical document projecting the common-property capital expenses of a strata corporation over 30 years. It identifies every major component (roof, windows, plumbing risers, elevators, envelope, parking membranes), estimates how much life each has left, projects replacement costs adjusted for inflation, and maps those costs against a funding plan.
The report matters for three reasons. First, it's the council's planning document for Contingency Reserve Fund (CRF) contributions. Second, it's a disclosure document, prospective buyers and their lawyers read it during due diligence, and insurance underwriters use it to price the master policy. Third, it's a legal compliance document, Section 94 of the SPA requires it, and the Civil Resolution Tribunal can order compliance when it's absent or outdated.
What Section 94 actually requires
Section 94 applies to every strata corporation with five or more units. The obligations are:
- Commission a depreciation report within six months of the first AGM (for newly-formed stratas) or every five years thereafter.
- Commission from a qualified person, the Strata Property Regulation Schedule 2.1 defines this as an engineer, a certified technician, an appraiser, or someone else with demonstrable expertise in the subject property type.
- Provide the report to owners through the Section 35 records system within 30 days of receiving it.
- Include the report's findings in the next budget cycle and funding plan.
Stratas under five units are exempt. Stratas above five can opt out by three-quarter vote every three years under Section 94(3), but this is increasingly hard to defend.
The six components of a good BC depreciation report
Not all depreciation reports are equal. A thin report gives you a component list and a single funding scenario. A thorough report gives you six things.
1. Component inventory
Every common-property asset identified, classified, and photographed. A 20-unit lowrise might have 60-80 line items; a high-rise easily has 200+. Common misses on thin reports: underground parking membrane, fire-suppression risers, domestic water recirculation pumps, elevator machinery (not just the cab).
2. Remaining service life estimates
For each component, the report estimates how many years of useful life remain. This is where engineering judgement enters. Good reports cite the source of each estimate (manufacturer specs, visual inspection, industry norm). Weak reports give you round numbers with no justification.
3. Replacement cost estimates
Current-dollar replacement cost for each component, plus a separate line for inflation-adjusted cost at the projected replacement year. A report that doesn't break these out is relying on you to do the math, which you will get wrong.
4. Funding scenarios
At minimum three scenarios: fully-funded (CRF contributions sized to eliminate all future levies), threshold-funded (contributions sized to maintain a minimum balance above zero), and cash-flow (contributions sized to meet each year's expected expense). The report ranks them against the corporation's current CRF contribution rate so you can see where you stand.
5. Recommended CRF contribution
In dollars per unit per month, based on the scenario the report's author recommends. This is the line that should drive next year's budget.
6. Red-flag summary
The one-page executive summary that names which components are under-reserved, under-inspected, or likely to surprise the corporation within five years. If your depreciation report doesn't have this, ask the author to add one.
How to read a 30-year funding plan
The funding plan is a spreadsheet: years in columns, cash position in rows. Three numbers matter more than the rest.
Annual contribution required, in dollars per unit per month, under each funding scenario. Compare to what you're contributing today. Gap = warning.
Minimum CRF balance, how close does the fund get to zero in any year? A well-funded strata never drops below 25% of the next-five-years planned expenditures. A strata that hits $0 in Year 8 has a special-levy event baked into the plan, or the plan is wrong.
Major expenditure years. When does the roof come off? When does the envelope go? When do the elevators get retrofitted? Circle those years on the spreadsheet. If three major expenditures cluster in the same three-year window, the levy math gets ugly fast.
Red flags in a depreciation report
Some patterns reveal an underfunded CRF or a compromised report. Council should flag these during annual budget review.
- Single funding scenario presented, a complete report requires at least three. If the board is only seeing one, ask what the others say.
- "Recommended contribution" equal to current contribution, suspiciously convenient. Ask the author how they arrived at that number; it should be independent of what the corporation is already doing.
- Remaining service life rounded to 5s or 10s, a real engineering estimate lands on specific numbers like 7 or 13, not always 5, 10, 15, 20.
- No inflation adjustment, a 2026 dollar replacing a 2046 roof is not the same as a 2046 dollar. If the plan doesn't index, the numbers are wrong.
- Component list missing major items, envelope, parking membrane, fire-suppression, domestic water lines are frequently under-inventoried.
- Report older than five years, in breach of Section 94 as soon as the five-year mark passes.
How the depreciation report affects strata fees
A corporation's monthly strata fee has three major components: the operating budget (day-to-day expenses), the CRF contribution (savings for future capital work), and the management firm's monthly fee. The depreciation report drives the CRF contribution line.
Councils that under-contribute to CRF because the depreciation report was optimistic or thin eventually pay through special levies, one-time assessments from owners, usually $5,000 to $50,000 per unit, sometimes more. Mid-size levies are the most common complaint at the AGM after fee increases.
Councils who fund to the recommended scenario don't eliminate levies entirely, but they reduce their frequency and size. Owners in well-funded stratas pay more per month and less in emergency assessments. On a lifetime-owned-unit basis, well-funded is almost always cheaper.
If your strata fees feel high and you don't know what your CRF funding scenario is, that's the starting question. Benchmark your fees against comparable BC buildings to see whether your monthly number is reasonable, then read the depreciation report to see where the money is going.
Who the depreciation report is for
Council, primarily. Every council member reads the full report, not just the summary. Your job is to understand the funding picture clearly enough to present it to owners.
Owners receive access through Section 35 records and typically read it when they're selling (their lawyer will ask for it) or when a special levy is proposed. A transparent council brings a one-page depreciation-report summary to the AGM every year, showing the current CRF balance against the recommended trajectory.
Lenders and underwriters are the quiet audience. Mortgages against stratas without current reports are getting harder to approve. Insurance underwriters use the report to price the master policy. When your depreciation report lapses, both of those doors start to close.
The management firm's role
The management firm does not write the depreciation report. They help the council select a qualified provider, coordinate the site inspection, distribute the report to owners through the Section 35 records system, and build the funding plan into the annual budget.
Where firms add value: institutional knowledge of which depreciation-report providers produce thorough versus thin reports, and which consultants are familiar with your specific building type. Where firms fall short: treating the report as a one-time deliverable that disappears after filing, rather than an active planning document revisited at each budget cycle.
If your management firm doesn't reference the depreciation report in the annual budget presentation, showing current contributions against the recommended scenario, that's a red flag. Run the 6-question scorecard on your current firm and see where else the planning discipline is thin.
Frequently asked questions
How often does a BC strata need a depreciation report?
Every five years under Section 94 of the Strata Property Act. Stratas with fewer than 5 units or those that pass a three-quarter vote to opt out can skip the requirement, though opting out is increasingly difficult to justify as CRF underfunding comes under regulator scrutiny.
Who pays for a BC strata depreciation report?
The strata corporation pays, via the operating budget or a one-time special levy. Cost ranges from roughly $4,000 for a small townhouse complex to $15,000+ for a high-rise. A certified depreciation-report provider (engineer or qualified consultant) produces it. Management firms don't write them.
What happens if a BC strata doesn't have a current depreciation report?
The corporation is in breach of Section 94 of the Strata Property Act. Owners or the Civil Resolution Tribunal can compel compliance. Lenders increasingly require a current report before approving a mortgage against a unit, which affects sales. Insurance underwriters also use depreciation-report status as a risk input.
Can a BC strata opt out of the depreciation report requirement?
Yes, under Section 94(3), but it requires a three-quarter vote of owners every three years. Opting out is getting harder to justify as insurance premiums rise and CRF underfunding becomes visible to lenders. Most councils that opted out in earlier cycles are reversing that position.
Who reads the depreciation report?
The council reads it cover-to-cover, not just the summary. Owners receive notice that it's available (Section 35). Prospective buyers' lawyers review it during due diligence. Insurance underwriters use its findings to price the master policy. Lenders use it to assess mortgageability. Treat it as a public-facing document.
Related tools for your council
- Benchmark your strata fees, realistic fee range for your building size and city, free. If your fees look high, checking the depreciation-report funding plan is the first place to look.
- Should you switch your management firm? Run the scorecard, if the firm isn't presenting the depreciation report at budget time, that's one of the six signals.
- Browse BC strata management firms by city, 414 BCFSA-verified firms. Filter by Vancouver, Burnaby, Richmond, or your municipality.
- Get matched with firms that take CRF planning seriously, free to councils, inside 24 hours.
