Using Your Depreciation Report to Fund the Reserve

A depreciation report that sits in a filing cabinet is an expense. A depreciation report that drives your contingency reserve fund (CRF) contributions is an asset. Since the reserve-funding rules changed, BC strata corporations no longer have the option of treating the report as optional reading — the report and the CRF are now legally connected, and the Act rewards councils that use one to fund the other.

The report is mandatory, and it renews

Depreciation reports are required for strata corporations of 5 or more lots — the old 3/4-vote waiver has been removed. The deadlines are July 1, 2026 for strata corporations wholly or partly in Metro Vancouver, the Fraser Valley Regional District or the Capital Regional District, and July 1, 2027 elsewhere in BC, with a new report required at least once every 5 years after that (Strata Property Regulation s.6.21; see also the Province's depreciation report requirements).

The report must come from a qualified person. For reports obtained on or after July 1, 2025, that means a professional from one of the listed designations — a professional engineer or professional licensee engineering, an architect or architectural technologist, an applied science technologist or certified technician, an AACI appraiser, a certified reserve planner, or a Professional Quantity Surveyor (Regulation s.6.2).

If you are not yet fluent in what the document is telling you, start with How to Read a Depreciation Report: A BC Strata Council Guide.

What the law requires you to contribute

The CRF exists for common expenses that usually occur less often than once a year, or that do not usually occur at all (Strata Property Act s.92). Two rules govern the annual contribution:

• The annual CRF contribution must be at least 10% of the total amount budgeted for the operating fund contribution for the current fiscal year (Regulation s.6.1; the first budget after the first AGM is covered by s.3.4).
• That amount must be determined after consideration of the most recent depreciation report, if any (Regulation s.6.1(1)).

Read those together: 10% is a floor, not a target. The report is the evidence that tells you whether the floor is enough. The older rule some owners still quote — that no contribution is required once the CRF reaches 25% of the operating budget — has been superseded and should never be relied on.

Councils also often forget the mechanics in s.95: CRF money must be accounted for separately, invested only in permitted investments or insured accounts with BC savings institutions, and any interest earned becomes part of the fund. A short-term loan from the CRF to the operating fund is permitted only to cover a temporary shortage and only if repaid by the end of that fiscal year, and owners must be told the amount and purpose as soon as feasible (Regulation s.6.3).

Turning the report's models into a funding plan

Every depreciation report must include at least three cash-flow funding models for the CRF over 30 years, and those models may use CRF balances, contributions and withdrawals, special levies, or borrowing (Regulation s.6.2(3)–(4)). Those three models are the council's real decision.

A practical way to use them at budget time:

• Identify the items in the next 5 to 10 years with the largest projected costs and the shortest remaining service life.
• Compare each model's required contribution against the 10% minimum. If the models show a gap, say so in the budget package rather than at the special general meeting three years later.
• Decide, deliberately, how much of the gap you intend to close through contributions versus a future special levy. A special levy needs a 3/4 vote at a general meeting where each lot's share is calculated under ss.99, 100 or 195 (normally unit entitlement); if the strata divides the levy in another way that establishes a fair division for that particular levy, s.108 requires a unanimous vote — a much harder ask.
• Fold the result into your annual budget narrative. Our guide on How to Prepare a Strata Annual Budget in BC walks through the sequence.

Whether the report also covers parts of strata lots depends on your own registered bylaws: s.72 lets a strata corporation take responsibility by bylaw for specified portions of a strata lot, and the report must cover what the corporation is responsible to maintain or repair.

Questions councils ask

Does spending from the CRF always need a 3/4 vote?
No. Under s.96, a majority vote is enough in five cases: (I) obtaining a depreciation report under s.94; (II) repair, maintenance or replacement recommended in the most current depreciation report of common property, common assets, or the portions of a strata lot the corporation has taken responsibility for under s.72(3); (III) installing EV charging infrastructure or managing the electricity it uses; (IV) obtaining an electrical planning report under s.94.1; and (V) obtaining other reports about EV charging infrastructure. Any other CRF expenditure needs a 3/4 vote.

Why does that matter for funding?
Because case (II) is a direct incentive to keep the report current: recommended work clears the meeting on a majority vote instead of 3/4. A 3/4 vote means at least 3/4 of the votes cast by eligible voters present in person or by proxy, excluding abstentions (s.1) — not 3/4 of all owners.

Can the council just spend it without a vote?
Only within s.98: from the operating fund up to the limit set in the bylaws, or, if the bylaws are silent, the lesser of $2,000 and 5% of the annual operating-fund contribution; and from either fund where there are reasonable grounds to believe an immediate expenditure is necessary to ensure safety or prevent significant loss or damage. Emergency spending must not exceed the minimum needed, and owners must be informed as soon as feasible. Check your own bylaws for the s.98(2)(a) figure and any added conditions.

Keep the plan alive between reports

A funding plan fails quietly — through arrears, through deferred work, through minutes nobody can find. Keep the report, the budget and the CRF ledger in one place so next year's council inherits the reasoning, not just the numbers; ManageStrata is built for exactly that kind of continuity in a self-managed strata, and tools like SearchStrata can use AI to surface what a long depreciation report or minute book actually says about a given building component. Cash flow matters too: reserve targets assume the fees arrive, which is why Collecting Strata Fee Arrears in BC belongs beside your funding model. Also diarize your electrical planning report deadline — December 31, 2026 in Metro Vancouver, the Fraser Valley and the Capital Regional District, and December 31, 2028 elsewhere for strata corporations of 5+ lots.

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.