Encyclopedia
Depreciation report
A strata corporation's study of its common property and assets with a long-term plan for repairs and funding.
For example: A buyer of a commercial strata unit asks for the depreciation report to see what major work is coming. (Illustration only, not a real deal.)
Official source: Strata Property Act (BC Laws)
Example only, not a real client. Say you are buying a strata retail unit. The depreciation report shows the building’s windows and parkade membrane will need replacing within a few years, and the reserve fund is not enough to cover them. You use that to negotiate the price, knowing a special levy is likely.
What I’d tell a friend
Read the depreciation report before you buy a strata unit. It is the best preview of the costs ahead.
Why it matters to you
It shows what a strata building will need over the next decades and whether the fund can pay for it. A gap can mean special levies soon after you buy.
How to use it in your deal
Buyers should read the latest depreciation report, the contingency reserve fund balance, minutes and budgets, then compare planned spending with savings. Large gaps signal special levies ahead. Check whether the strata has followed the report or ignored it. Ask about recent engineering reports on specific systems. Owners should support adequate funding, since underfunding hurts resale and leads to special levies.
Lenders may ask for it. Tenants of strata units may face pass-through costs depending on leases, so ask the owner-landlord how strata fees and levies are handled. Industrial and commercial stratas often have simpler common property than residential towers, but roofs, paving, fire sprinklers and shared loading still cost a lot to replace, and fewer owners share the bill.
If the report is old, assume costs have risen with construction prices. Sellers should provide it early, along with the Form B, so buyers aren't surprised during subjects.
Mistakes I see
Not reading it. Ignoring an outdated report. Assuming the reserve is enough.
In BC and Vancouver
The Strata Property Act and regulations set requirements; the province publishes guidance.
Official sources: Strata Property Act (BC Laws) · Strata housing (Government of BC)
What it is
A depreciation report is a study of a strata building’s common property, estimating when major parts will need repair or replacement and what that might cost. It helps owners plan their reserve fund.
BC has rules on when stratas need these reports and how often they are updated, so check the current requirements with your lawyer or strata manager.
How to use it
Compare the planned costs with the reserve fund balance. A large gap suggests special levies or higher fees ahead.
Check how recent the report is and whether the strata has followed its plan. Minutes often show whether owners have voted down recommended work.
Questions to ask before you sign
- When was it done?
- What major work is coming?
- Is the reserve enough?
- Have levies been discussed?
Keep reading
Related terms: Contingency reserve fund (CRF), Special levy, Strata corporation
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General information for British Columbia only. It isn’t legal, tax, accounting or financial advice, laws and rates change, and reading it doesn’t make you my client. Any numbers or scenarios are hypothetical. Check the linked official source and talk to a lawyer, accountant or other qualified professional before you act or sign anything. See the terms and disclaimer.