Understanding Depreciation Reports: What Every Strata Council Should Know

A depreciation report is one of the most important planning documents a strata corporation can have. Yet many councils don't fully understand what it contains or how to use it effectively. Under the Strata Property Act, most strata corporations are required to obtain a depreciation report every three years (or pass a resolution to waive it, which requires a 3/4 vote and is generally inadvisable). The report provides a 30-year forecast of the strata's major capital expenditures—roofs, mechanical systems, elevators, balconies, parkades, and more—along with an analysis of the contingency reserve fund and its adequacy. The report is not just a compliance exercise. It is a roadmap for long-term financial planning. A well-used depreciation report helps councils set appropriate strata fees, plan for special levies before they become emergencies, and communicate with owners about the financial health of the corporation. Key things to understand about your depreciation report: the cost estimates are point-in-time projections, not guarantees; the funding scenarios are models, not prescriptions; and the report's value depends heavily on the qualifications and diligence of the engineer who prepared it. Stratawest works with councils to ensure they understand their depreciation reports, use them in annual budget planning, and update them on schedule.