How Do I Read a Depreciation Report Before Buying Into a Building?
BC just tightened the rules on these reports, and the first hard compliance deadline for North Shore stratas landed on July 1, 2026. Here's what the report actually tells you, and where to look first.
“• A depreciation report projects a building’s major repair costs over roughly the next 30 years and shows whether current funding is keeping pace
• As of July 1, 2024, BC strata corporations with five or more units must obtain one on a mandatory five-year cycle, with no more deferral votes allowed
• Strata corporations in Metro Vancouver, including the North Shore, without a current report needed one by July 1, 2026; the funding scenarios inside it matter more than the report simply existing”
Why This Document Matters More Than It Used To
A depreciation report is a professional assessment of every major shared component in a strata building, from the roof and elevator to plumbing, electrical systems, and parking structure, projecting when each will need replacement and what it will cost. It's built around three funding scenarios that show what strata fees or reserve contributions would need to look like to keep the reserve fund on pace, at threshold, or fully funded against those upcoming costs.
For years, many strata corporations avoided this document almost entirely. The Strata Property Act used to allow strata corporations to defer getting a depreciation report indefinitely with an annual 3/4 vote, and plenty did exactly that. That loophole closed for good as of July 1, 2024, according to the BC government's updated strata housing regulations. Strata corporations with five or more units are now on a mandatory five-year cycle, with no deferral option. For buildings without a current report, or with one dated before December 31, 2020, the deadline to obtain one was July 1, 2026 for stratas in Metro Vancouver, the Fraser Valley, and the Capital Regional District, which covers the entire North Shore.
Practically, that means a lot of older North Shore buildings that had been putting this off for years were forced to finally commission a report over the past couple of years, which is genuinely useful for buyers: more current data exists now than at almost any point in the past decade.
Start With Whether the Report Is Even Current
Before reading the substance, check the date. A report more than five years old is technically out of compliance, and its cost projections are likely stale, especially given how much construction and labour costs have shifted in recent years. If a building's most recent report predates 2021, ask the strata council or property manager when the next one is scheduled and whether they're on track for their required deadline.
The Part That Actually Matters: Funding Scenarios
The inventory and condition assessment sections are worth skimming, but the funding scenarios are where the real signal lives. Every report presents at least three: a "fully funded" model that keeps pace comfortably with every projected expense, a "baseline" model that covers the essentials with less cushion, and a "threshold" model that's the bare minimum to avoid a funding crisis.
What you're looking for is which scenario the strata has actually adopted, and how it compares to their current contribution rate. If the strata's current strata fees and CRF contributions are tracking below even the baseline scenario for upcoming major expenses, that's a meaningful gap, and it's usually a leading indicator of either a coming special levy or a significant fee increase down the road, not a hypothetical risk.
Cross-Reference With What's Actually Been Spent
A report is a projection, not a guarantee anything happens on schedule. Cross-reference its major upcoming items (a roof at year three of its projected life, a parkade membrane flagged as needing attention) against recent AGM minutes to see whether the strata is actually acting on the report's recommendations or letting them slide. A report that says "the roof needs replacement in two years" is far more reassuring if the minutes show the strata is already soliciting contractor quotes than if there's no mention of it at all.
What This Means for You
I read a depreciation report less as a document to fully absorb line by line and more as a set of questions to bring to the strata council or property manager. Which funding scenario are they actually following, is the current report within its five-year window, and does anything projected in the near term line up with what's showing up in recent minutes. That's a fifteen-minute conversation that tells you more than the raw document usually does on its own.
About Matt Council
Matt Council is a top-performing North Vancouver Realtor and West Van specialist with a background in finance. He moves beyond the sales hype to offer clients a data-driven, pressure-free approach to buying and selling real estate on the North Shore. Whether you are evaluating a presale in Lower Lonsdale or a detached home in Lynn Valley, Matt helps you understand the numbers behind the move.
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