How to Read a Depreciation Report: A BC Strata Council Guide

A depreciation report is the single most useful financial document most BC strata corporations own — and the one most often filed away unread. It estimates the repair and replacement cost of major items and the expected life of those items (Strata Property Act s.94). Learning to read one properly turns a 150-page PDF into a defensible plan for strata reserve funding in BC.

First, confirm your report is current

Depreciation reports are required for strata corporations with 5 or more strata lots — the old 3/4-vote waiver is gone, and the Regulation exempts a strata only while there are fewer than 5 strata lots (s.6.22). Under Regulation s.6.21, a new report is required at least once every 5 years, and existing strata corporations that have not obtained one since December 31, 2020 must do so by July 1, 2026 in Metro Vancouver, the Fraser Valley Regional District and the Capital Regional District, or July 1, 2027 elsewhere in BC. Newer corporations work from their first AGM date instead. The provincial requirements page summarizes the schedule.

Also check who wrote it. For reports obtained on or after July 1, 2025, the qualified person must hold one of the designations listed in Regulation s.6.2 — for example a professional engineer, architect, applied science technologist, AACI appraiser, certified reserve planner or Professional Quantity Surveyor. The report itself must disclose the author's qualifications, any error and omission insurance, and their relationship to the strata corporation.

The three parts every report must contain

Regulation s.6.2(1) sets the required contents. Read them in this order:

• Executive summary — start here, but never stop here.
• Physical component inventory and evaluation — based on an on-site visual inspection, with a description and estimated service life over 30 years of the items the strata is responsible to maintain or repair: structure, exterior (roofs, roof decks, doors, windows, skylights), building systems, amenities, parking and roadways, utilities, landscaping, interior finishes, green building components, balconies and patios.
• Summary of repairs and maintenance work for common expenses that occur less often than once a year, or that do not usually occur.
• Financial forecasting section — the 30-year money picture, discussed below.

One clause councils routinely miss: the inventory must identify common property and limited common property that the owner, not the strata corporation, is responsible to maintain and repair. That allocation depends on your own registered bylaws and any agreements with owners, so compare the report's assumptions against your bylaws rather than treating the consultant's split as authoritative.

Reading the funding models

Depreciation report funding models are where the report earns its fee. The financial forecasting section must include the anticipated costs projected over 30 years, a description of the factors and assumptions used — including interest rates and rates of inflation — a description of how the contingency reserve fund is currently funded, the current CRF balance minus approved but unspent expenditures, and at least three cash-flow funding models over 30 years.

Those models may combine CRF balances, contributions and withdrawals, special levies, and borrowings. So when a model shows a comfortable balance, ask which lever it pulled: higher monthly contributions, a levy in year 8, or debt. Practical questions for council:

• What inflation and interest assumptions were used, and are they still plausible?
• Which model does the report's own author appear to favour, and why?
• Does the current CRF balance in the report match your latest financial statements?
• Which components fall due in the next 5 years, before the next report is required?

Uploading the report and your financials into a tool like SearchStrata can help council extract component dates and cost lines for AI-assisted comparison — useful for triage, not a substitute for reading the report.

Q&A: what councils ask most

Does a depreciation report force us to fund it? No. The report is a planning document. But the minimum annual CRF contribution — at least 10% of the total budgeted operating fund contribution — must be determined after considering the most recent depreciation report, per the provincial budgeting guidance.

What vote do we need to spend the CRF on recommended work? Under s.96, a majority vote is enough where the expenditure relates to repair, maintenance or replacement recommended in the most current depreciation report of common property, common assets or portions of a strata lot the strata has taken responsibility for under s.72(3) — and also where the expenditure is necessary to obtain the depreciation report itself. Other CRF expenditures need a 3/4 vote, which s.1 defines as 3/4 of the votes cast by eligible voters present in person or by proxy, excluding abstentions.

Does obtaining the report come out of the CRF? It can, but s.92 expressly makes the cost of obtaining a depreciation report an operating fund expense, so many councils simply budget for it.

Turning the report into a budget

Work the report into your annual cycle: identify the next 5 years of components, decide which funding model you are following, and carry it into the budget resolution. See How to Prepare a Strata Annual Budget in BC and the Strata Contingency Reserve Fund (CRF): A Complete Guide for the mechanics, and Collecting Strata Fee Arrears in BC if funding depends on collections you have not secured. Self-managed councils using ManageStrata often attach the report's 5-year component list to the budget package so owners can see what the contribution is buying.

Finally, note the companion document: strata corporations of 5+ lots also need an electrical planning report, whose required contents are set out in Regulation s.5.11 — capacity, existing demands, peak demand and practicable upgrades. Read the two together; they often point at the same electrical infrastructure.

This article is general information about BC strata law, not legal advice; verify against the current Strata Property Act and Regulation or consult a BC strata lawyer.