Authored by: Rimkus Built Environment Solutions Marketing Team
A BC depreciation report forecasts a strata corporation’s major repair and replacement costs over 30 years and presents funding models for covering them. The contingency reserve fund (CRF) that pays for that work often holds only a fraction of the projected total.
Two recent regulatory changes affect strata councils (elected owner boards) and owners: the qualified-person requirements introduced in 2025, and the report cycle set at five years in 2024. Both changes affect who can legally prepare the report and how soon a strata must commission one.
This article walks through who qualifies to prepare a report and what its component inventory and funding models cover. It also shows how councils translate those projections into an annual reserve contribution, the same planning most Canadian condominium boards handle through a comparable reserve fund study.
Key takeaways: Who can prepare a BC depreciation report
For reports received on or after July 1, 2025, the preparer must hold one of six recognized professional designations, and no exceptions apply regardless of the strata’s size or budget.
What the report contains
- A component inventory and condition evaluation based on an on-site visual inspection
- A 30-year cost forecast with stated inflation and interest rate assumptions
- At least three cash-flow funding models showing how contributions affect the fund
How councils use it
- Compare projected costs with maintenance records and available reserves
- Reconcile the report against the CRF balance to spot funding gaps
- Bring a recommended contribution to owners for approval at the AGM
Councils weighing a report’s findings against a building’s actual condition often need an independent technical read before presenting numbers to owners. Contact Rimkus to discuss a property’s assessment.
What is a depreciation report?
A depreciation report is a long-term planning document for a strata corporation’s shared property. The Strata Property Act requires most strata corporations to obtain one from a qualified person. It defines the report as an estimate of “the repair and replacement cost for major items in the strata corporation and the expected life of those items.”
Legal requirements and the five-year update cycle at a glance
As of July 1, 2024, strata corporations in BC with five or more units must commission a depreciation report every five years. Legislative updates removed the option for owners to defer this requirement by annual three-quarter vote, though developments with four or fewer lots keep their exemption status. Initial compliance timelines vary according to establishment date, geographic location, and the date of any previous report.
| Strata corporation category | Depreciation-report requirement | Deadline or frequency | Key details |
|---|---|---|---|
| Five or more strata lots | Must obtain a depreciation report | Must obtain a new report at least once every five years | Since July 1, 2024, a strata corporation cannot defer the requirement through an annual three-quarter vote. |
| Fewer than five strata lots | Exempt from the mandatory depreciation-report requirement | No mandatory report cycle | The exemption applies for as long as there are fewer than five strata lots in the strata plan. A strata corporation may still obtain a report voluntarily. |
| Established before July 1, 2024, that has not obtained a depreciation report since December 31, 2020, and is located wholly or partly in the Metro Vancouver Regional District, Fraser Valley Regional District, or Capital Regional District | Must obtain a depreciation report | Before July 1, 2026 | This deadline does not apply to an island in the Metro Vancouver Regional District or Capital Regional District that is accessible only by air or boat. |
| Established before July 1, 2024, that has not obtained a depreciation report since December 31, 2020, and is located wholly outside the Metro Vancouver Regional District, Fraser Valley Regional District, and Capital Regional District | Must obtain a depreciation report | Before July 1, 2027 | This includes an island in the Metro Vancouver Regional District or Capital Regional District that is accessible only by air or boat. |
| Established before July 1, 2024, that has obtained a depreciation report since December 31, 2020 | Must obtain a new depreciation report | At least once every five years | The strata corporation must obtain its next depreciation report no later than five years after the date its most recent depreciation report was obtained. |
| Established on or after July 1, 2024, but before July 1, 2027 | Must obtain its first depreciation report | No later than two years after its first annual general meeting | After obtaining its first report, the strata corporation must obtain a new report at least once every five years. |
| Established on or after July 1, 2027 | Must obtain its first depreciation report | No later than 18 months after its first annual general meeting | After obtaining its first report, the strata corporation must obtain a new report at least once every five years. |
| Established on or after July 1, 2027, with five or more strata lots | Owner developer must contribute toward the first depreciation report | No later than the date of the first annual general meeting | The owner developer must pay into the contingency reserve fund the lesser of $5,000 plus $200 multiplied by the number of strata lots, or $30,000. |
Who can prepare a depreciation report in BC?
For reports received on or after July 1, 2025, the regulation sets two conditions. The preparer must understand the components, scope, and complexity of the strata’s property and hold one of six recognized designations:
- Professional engineer or professional licensee engineering
- Architect or architectural technologist
- Applied science technologist or certified technician
- Accredited Appraiser Canadian Institute (AACI)
- Certified reserve planner
- Professional quantity surveyor
Each designation ties to a registering body, letting a council verify a preparer’s credential. The regulation also requires the report to disclose the preparer’s qualifications, relationship to the strata corporation, and errors and omissions coverage, “if any.”
An October 27, 2025 amendment expanded the eligible professional groups that may provide depreciation reports to include professional licensees engineering, architectural technologists, and certified technicians. The qualification requirement applies to depreciation reports obtained on or after July 1, 2025.
What a depreciation report contains: Building the asset inventory
The required elements cover a physical component inventory and evaluation, a maintenance summary, a financial forecast, and the preparer’s identity and qualifications. The report must also include the report date and any other appropriate analysis, plus an executive summary that the July 1, 2024 amendments added as a new requirement.
Common property systems and life cycle assessment
The component inventory groups into 10 categories spanning these major systems. Coverage rests on the preparer’s on-site inspection of the site and, where practicable, of each listed item:
- Building structure
- Building exterior, including roofs, roof decks, doors, windows, and skylights
- Building systems, including electrical, heating, ventilation, air conditioning, plumbing, fire protection, and security
- Common amenities and facilities (for example, pool, exercise room, guest house)
- Parking facilities and roadways
- Utilities, including water and sewage
- Landscaping, including paths, sidewalks, fencing, and irrigation
- Interior finishes, including floor covering and furnishings
- Green building components
- Balconies and patios
The government page explicitly says this list “is not a complete list, and not every strata corporation will have all of the components listed above”.
Provincial guidance distinguishes this inventory from a technical audit, which hunts construction defects through destructive testing behind walls and ceilings. The report itself relies on visual review alone, not destructive testing.
The Vancouver Island Strata Owners Association (VISOA) cautions that the cost forecasts are broad estimates and that actual costs may run 50% higher or lower. Councils should treat these figures as planning ranges, not fixed quotes.
The report must also identify common property and limited common property, which is shared property that the strata reserves for the exclusive use of particular lots. Maintenance responsibility for limited common property, and who ultimately pays, depends on the strata’s bylaws.
Deferred maintenance backlog and cost projections
The financial forecast projects maintenance, repair, and replacement costs over 30 years from the current or previous fiscal year, and must state the inflation and interest rate assumptions used. It also reports the current CRF balance minus approved but unspent expenditures. Neither the Act nor the regulation defines “deferred maintenance,” though unpaid approved work reduces that balance and overdue work can affect projected needs.
BC Housing documents a balcony renewal that should have cost $40,000 and ultimately cost nearly $875,000 after several years of postponement. Water intrusion of this kind typically spreads into adjacent framing, walls, and finishes the longer it goes unaddressed, which is why deferred repairs tend to compound rather than hold steady in cost.
Because the Act obliges the strata corporation to repair and maintain common property, a backlog of structural work or building envelope work may increase repair costs. The building envelope includes the roof, walls, windows, and balconies.
Using depreciation report data to fund the contingency reserve fund
Councils use depreciation report data to recommend annual CRF contributions each year. Provincial guidance indicates the corporation should weigh its most recent depreciation report when setting that figure.
From 30-year projections to annual contribution planning
The legal floor is a contribution of at least 10% of that year’s budgeted operating fund, the account for day-to-day expenses. This minimum has applied since November 1, 2023, with no exemption at any fund balance, and owners approve the council’s recommended figure by majority vote at the AGM.
Percent funded, a common reserve-planning metric, expresses the fund balance as a share of a fully funded target. U.S. reserve-planning guidance generally treats 70% or higher as a level at which special assessments are rare, and below 30% as a level at which loans or special levies, one-time owner charges beyond regular fees, become common. BC legislation does not set a percent-funded target.
Evaluating funding models presented in the report
The regulation requires at least three cash-flow models over 30 years. The models may use CRF contributions and withdrawals, with special levies or borrowing covering projected gaps. Provincial guidance presents the scenarios for the strata corporation’s consideration and states that owners do not have to adopt them.
Reserve planners commonly frame these scenarios as baseline funding, full funding, and threshold funding approaches. Under a baseline funding scenario, contributions stay near the minimum needed to keep the balance above zero, and the strata typically funds gaps through larger special levies later. A full funding scenario keeps the reserve near 100%, while a threshold funding approach targets a pre-set dollar or percent-funded level set by the strata.
A special levy calculated on the standard allocation basis needs a three-quarter vote of owners. Spending from the CRF on work recommended in the most current depreciation report passes by majority vote.
Reading and acting on the depreciation report: Questions for council
Council review compares the inventory with the property, confirms that the financial assumptions are stated, and reconciles the projections with the strata’s maintenance history. Discrepancies between the report and known building conditions typically surface at this stage.
A council may request changes where it finds factual inaccuracies. The report still joins the strata corporation’s records on delivery, regardless of whether council agrees with it, and that record stays available to owners, buyers, and lenders during due diligence.
Assessing data reliability and identifying gaps
Provincial guidance flags blanket assumptions as a common weakness: a preparer who inspects one townhouse with a shake roof may wrongly assume every unit has the same roofing. A summer inspection can also miss winter heating or window condensation problems.
Omissions of strata-responsible components may make a report incomplete and non-compliant, and are a common red flag for reviewers. A specialist study, such as a property condition assessment or an envelope report, can help clarify whether an omission is a genuine gap.
Emergency repairs or insurance deductibles may leave the actual CRF balance lower than expected, so a stale fund balance may cause the model to overstate the fund. Council should confirm the balance against recent financial statements before relying on the projections.
Sequencing capital projects when resources are limited
No BC government or BC Housing document prescribes a ranked order for projects when the fund cannot cover everything at once, though some obligations are effectively non-negotiable. The BC Fire Code, for example, requires ongoing maintenance of fire alarm and water-based fire protection systems in existing buildings, a life-safety obligation that typically outranks discretionary upgrades in sequencing decisions.
Claims data offers a second signal: in a 2020 review of the strata insurance market, the BC Financial Services Authority (BCFSA) reported that water damage accounted for roughly 46% of total strata claim costs since 2017.
A condition assessment and design brief from a qualified building science firm is a common part of preparation for a major renewal. This capital improvement planning stage can help refine scope, costs, and bundling options. Phasing that work across multiple stages can raise the total cost as remobilization, inflation, and disruption add up.
Using report findings for CRF decisions
BC councils apply their own CRF requirements when acting on report findings. A strata council comparing notes with an out-of-province condominium, or managing a portfolio across provinces, can compare those figures with reserve fund requirements in other provinces.
For depreciation report and reserve planning support from Rimkus Built Environment Solutions, contact us.
Frequently asked questions about BC depreciation reports
How do depreciation reports affect buyers and lenders?
Depreciation reports may show buyers and lenders whether the strata has funded upcoming capital work or may require special levies. They may offer indicators of physical health through component inventories and financial health through reserve adequacy, which may help both parties assess repayment risk and collateral quality.
What happens if a BC strata corporation misses its depreciation report deadline or fails to renew the report on schedule?
The strata remain required to obtain one, although the Strata Property Act does not specify penalties for missing the deadline. The absence may create disclosure issues affecting sales and insurance, and it can complicate lender and buyer due diligence for financing or property transactions.
What is the difference between a depreciation report and a reserve fund study?
A depreciation report is the BC Strata Property Act’s term for this analysis; “reserve fund study” is the term used more commonly elsewhere in Canada and in the United States. Both document a similar physical inventory and 30-year cost forecast that boards or councils use to plan reserve contributions.
This article is intended to provide general information and insights into prevailing industry practices. It is not intended to constitute, and should not be relied upon as, legal, technical, or professional advice. The content does not replace consultation with a qualified expert or professional regarding the specific facts and circumstances of any particular matter.