APR Building Strategies & Reserve Planning

A Depreciation Report is a key planning and budgeting tool required for strata corporations in British Columbia. It provides a detailed assessment of the condition and lifespan of the building’s common property components, such as the roof, exterior walls, plumbing, and other shared elements. The report also includes a financial plan to help the strata corporation set aside enough money in a contingency reserve fund (CRF) to cover the cost of future repairs or replacements.

As of the recent legislative changes, all strata corporations in BC must complete a depreciation report every five years, and the option to waive this requirement has been removed. This ensures that all buildings are properly maintained and that strata corporations are financially prepared for upcoming expenses.

The report includes:

• Physical assessment: A comprehensive review of the building's common components, such as the roof, windows, and plumbing systems, assessing their condition and estimating when they will need repairs or replacement.
• 30-year financial forecast: A detailed projection of the costs associated with maintaining and replacing the building's components over the next 30 years. This forecast helps strata corporations plan how much they need to contribute to their CRF to cover these future expenses without relying on special assessments.
• Budget planning tool: The depreciation report serves as a practical budgeting tool that helps strata corporations avoid unexpected financial burdens by planning and saving for major repairs and replacements in advance.

Additionally, all reports must be signed off by a qualified professional, such as a Certified Reserve Planner (CRP), ensuring the accuracy and reliability of the report.