Depreciation Reports (Reserve Fund Studies)

Purpose of Depreciation Reports

Strata corporations are legally required to repair and maintain common property. A depreciation report tells a strata corporation what common property and assets it has and the projected maintenance, repair and replacement costs over a 30-year time span.

Common property is not just buildings. Common property and assets can also include landscaping, roads, recreational amenities and many other items. All strata corporations with five or more lots, including bare land strata corporations (sometimes referred to as “strata subdivisions”) must obtain depreciation reports on a five-year cycle. Bare land strata corporations are usually responsible for the long-term repair and maintenance of bare land strata infrastructure which can include roads, water, electricity, and sewage.

A depreciation report helps strata lot owners protect their homes and investments and avoid being surprised by unexpected special levies for maintenance and repair. The report also provides valuable information to prospective buyers, mortgage and insurance providers.

Requirements

Effective July 1, 2024, the Province strengthened requirements for strata depreciation reports.

• All strata corporations with five or more lots must obtain a depreciation report on a five-year cycle; strata corporations with four or fewer lots continue to be exempted and are not required to obtain depreciation reports

• Strata corporations may no longer hold an annual ¾ vote to defer getting a depreciation report

• Strata corporations without depreciation reports, or depreciation reports received prior to December 31, 2020, must obtain depreciation reports by:

  • by July 1, 2026 for strata corporations 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)

  • by July 1, 2027, for strata corporations located in other areas of British Columbia including the Southern Gulf Islands and Bowen Island

• 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.