- until July 1, 2026, if located in Metro Vancouver (other than an island within Metro Vancouver only accessible by boat or air such as Bowen Island), the Fraser Valley, or the Capital Regional District (other than an island within the CRD only accessible by boat or air such as the Southern Gulf Islands)
- until July 1, 2027, if located in other areas of British Columbia including the Southern Gulf Islands and Bowen Island
(i) a professional engineer registered as a member in good standing with the Association of Professional Engineers and Geoscientists of the Province of British Columbia;
(ii) a person registered as an architect with the Architectural Institute of British Columbia;
(iii) a person registered as an applied science technologist under the Professional Governance Act;
(iv) a person designated Accredited Appraiser Canadian Institute by the Appraisal Institute of Canada;
(v) a certified reserve planner accredited by the Real Estate Institute of Canada;
(vi) a person designated as Professional Quantity Surveyor by the Canadian Institute of Quantity Surveyors.
- New strata corporations established on or after July 1, 2024 but before July 1, 2027, must get a depreciation report within two years of the strata corporation’s first annual general meeting and every five years thereafter
- As of July 1, 2027, owner developers will provide some funding towards the first depreciation report for new strata corporations with five or more lots: a minimum of $5,000 plus $200 per strata lot to a maximum of $30,000. Accordingly, strata corporations established on or after July 1, 2027, must obtain a depreciation report within 18 months of the strata corporation’s first annual general meeting
The regulations have added to the content required in depreciation reports: an executive summary, and (if applicable to the strata corporation) air conditioning and ventilation.
Content requirements
As per Strata Property Regulation 6.2, a depreciation report must have certain content.
Physical component inventory and evaluation
A depreciation report must include a physical component inventory and evaluation of components which must:
- be based on an on-site visual inspection of the site and, where practicable, of the components conducted by the person preparing the depreciation report
- include a description and estimated service life over 30 years of those items that comprise the common property, the common assets and those parts of a strata lot or limited common property, or both, that the strata corporation is responsible to maintain or repair under the Strata Property Act, the strata corporation's bylaws or an agreement with an owner
Items to be reviewed include (but are not limited to):
- the building structure
- the building exterior including roofs, roof decks, doors, windows and skylights
- the building systems, including the electrical, heating, ventilation, air conditioning, plumbing, fire protection and security systems
- common amenities and facilities (for example: pool, exercise room, guest house etc)
- 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 list above is not a complete list; and not every strata corporation will have all of the components listed above. The list will vary by strata corporation. For example, some strata corporations have building structures they are responsible for repairing and maintaining, others do not. Some strata corporations will have water utilities they are responsible for repairing and maintaining, others do not.
The depreciation report must also identify those parts of the common property and limited common property, if any, that individual strata lot owners are responsible to repair and maintain. For example, patios and balconies that are designated limited common property in a high-rise "condo tower".
Financial forecasting section
Depreciation reports must also include a financial forecasting section to help the strata corporation, and owners, to plan for the repair and maintenance of common property and assets.
The financial forecasting section must include:
- The anticipated maintenance, repair and replacement cost for contingency reserve fund common expenses (expenses that usually occur less often than once a year or do not usually occur) projected over 30 years and the factors and assumptions used, including interest and inflation rates.
- At least 3 cash-flow funding models for the contingency reserve fund over 30 years. Cash flow models could include: the contingency reserve fund, special levies, increased strata fees, borrowing or some combination of these. The models must include projected inflation rates and the interest generated from money invested in the contingency reserve fund (CRF). Note: the models are provided in the report for consideration by the strata corporation, they do not have to be adopted.
- The current balance of the contingency reserve fund (CRF), minus any expenditures that have been approved but not yet taken from the fund, and how the CRF is currently funded.
Depreciation reports must also include:
- A summary of the repair and maintenance work for common expenses that occur less often than once year (i.e. contingency reserve fund expenses)
- The date of the report
- Any other appropriate information or analysis that the strata corporation or the person providing the depreciation report considers appropriate
- An executive summary
Qualifications for report providers
Effective July 1, 2025, the Strata Property Act and regulations specify six professions which can prepare depreciation reports. These six professions are: engineers, architects, applied science technologists, certified appraisers, certified reserve planners, and quantity surveyors.
Specifically a depreciation report must be obtained from one of the following:
(i) a professional engineer registered as a member in good standing with the Association of Professional Engineers and Geoscientists of the Province of British Columbia;
(ii) a person registered as an architect with the Architectural Institute of British Columbia;
(iii) a person registered as an applied science technologist under the Professional Governance Act;
(iv) a person designated Accredited Appraiser Canadian Institute by the Appraisal Institute of Canada;
(v) a certified reserve planner accredited by the Real Estate Institute of Canada;
(vi) a person designated as Professional Quantity Surveyor by the Canadian Institute of Quantity Surveyors.
When obtaining a depreciation report, strata corporations should choose a provider from the designated professions that has experience with their type of strata corporation. For example, the knowledge and expertise required to prepare a depreciation report for a six-plex will be considerably different than the knowledge required to prepare a depreciation report for a high-rise residential “condo” tower with its own power generating plant, sections, and underground parkade.
The regulations continue to require that the person (note: the word “person” used in the regulations is a legal term and can mean either an individual or a company) preparing the depreciation report have the knowledge and expertise to:
- understand the scope and complexity of the strata corporation's common property and common assets
- understand the individual components
- understand the strata corporation’s bylaws and any agreements entered into with owners respecting common property and strata lots
- prepare a depreciation report that complies with the regulations including a physical component inventory and evaluation and financial forecasting
The depreciation report must include the name of the person from whom the depreciation report was obtained and a description of:
- that person's qualifications
- the error and omission insurance, if any, carried by that person
- the relationship between that person and the strata corporation
Access to and retention of reports
The most recent depreciation report, if any, must be attached to the "Form B: the Information Certificate" and provided to buyers.
Under Section 35 of the Strata Property Act, the strata corporation must retain:
- any depreciation reports obtained by the strata corporation under section 94 of the Strata Property Act
- any reports obtained by the strata corporation respecting repair or maintenance of major items in the strata corporation, including, without limitation, engineers’ reports, risk management reports, sanitation reports and reports respecting any items for which information is, under section 94 of the Strata Property Act, required to be contained in a depreciation report
- the records and documents referred to in section 20 or 23 obtained by the strata corporation. These are documents provided to the strata corporation by the owner developer.
References:
Strata Property Act sections: 1, 35, 59, 91-96, 98-101, 103, 105, 108, 109, 111, 158, 194, 195
Strata Property Regulation: 6.1-6.6, 6.11, 11.1-11.3
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