Strata Depreciation Report

 A depreciation report is an estimate of the repair and replacement cost for major items owned by the strata corporation and the expected life of those items. It outlines the common property assets, their expected life and their replacement costs. It gives a strata corporation a tool to address the necessary costs to maintain common property and assets when they age. It forces the strata corporation to be proactive in repair and maintenance, as well as financial planning.

Since the owners of strata units are partially responsible for the common property, it’s very important for the owners to know how much repair and replacement work is required, what the approximate costs are and when the costs will likely occur.

For potential buyers, knowing what the state of the physical assets are of the property, understanding where the contingency reserve fund and special reserve fund is in terms of adequate preparation of short and long-tern maintenance would give them an idea of whether they will be subject to a huge levy the moment they take ownership. Therefore, it’s necessary that potential buyers review the depreciation report and seek expert advice before making a buying decision. 

The depreciation report covers common property as part of a strata building and not individual units within that building. Owners of strata units are fully responsible for inside of their own units.  Also, under British Columbia's Strata Property Act and Regulations, strata corporations must obtain a depreciation report unless the strata consists of fewer than five strata lots. The Regulations also require the report to be updated every three years.

If you need more information about strata, please click here or contact me at awang@macrealty.com