BC Strata Depreciation Reports 2024: Complete Guide to New Mandatory Requirements

Everything strata councils and property managers need to know about the game-changing regulations that took effect July 1, 2024

Quick Summary:

• Mandatory depreciation reports for all strata corporations with 5+ lots starting July 1, 2024

• No more deferral votes

• Five-year update cycle now standard

• Enhanced qualifications required by July 2025

• Developer contributions start July 2027

The landscape of strata property management in British Columbia changed dramatically on July 1, 2024. What was once optional for many strata corporations has now become mandatory, and the familiar annual vote to defer depreciation reports is no longer an option. If you're a strata council member, property manager, or strata owner, understanding these new requirements isn't just important—it's essential for legal compliance and effective property management.

What Changed: The End of Deferral

The most significant change implemented by Order in Council OIC 204-2024 is straightforward but impactful: all strata corporations with five or more lots must now obtain depreciation reports on a mandatory five-year cycle. Gone are the days when strata councils could hold their annual ¾ vote to defer this requirement for another year.

This change aligns British Columbia with eight other Canadian provinces that already mandate depreciation reports, bringing consistency to strata property management across the country. But for BC strata corporations, it represents a fundamental shift in how they approach long-term property maintenance and financial planning.

Key Changes at a Glance

• Mandatory requirement for all strata corporations with 5+ lots

• No more annual deferral votes (¾ vote to waive requirement eliminated)

• Five-year renewal cycle (increased from the previous three-year requirement)

• Enhanced professional requirements coming July 2025

• Developer funding requirements starting July 2027

  
  

Who Must Comply (And Who's Exempt)

Mandatory Compliance

If your strata corporation has five or more strata lots, you must obtain a depreciation report. This includes:

• Traditional apartment-style strata buildings

• Townhouse complexes

• Mixed-use strata developments

• Bare land strata corporations (with special considerations for infrastructure)

  
  

Exemptions

Strata corporations with four or fewer lots remain exempt from mandatory depreciation report requirements. These smaller strata corporations retain the flexibility to decide whether obtaining a depreciation report makes financial sense for their specific situation.

Implementation Timeline: What You Need to Know

Already in Effect (July 1, 2024)

• Mandatory depreciation reports for eligible strata corporations

• Five-year renewal cycle

• Elimination of annual deferral votes

Coming July 1, 2025

• Enhanced professional requirements: Depreciation reports must be prepared by designated professionals with specific qualifications

• Stricter standards for report quality and content

Future Requirements (July 1, 2027)

• Developer funding mandate: Owner developers must provide funding toward the first depreciation report for new strata corporations

• Funding formula: Minimum $5,000 plus $200 per strata lot, up to a maximum of $30,000

  
  

What This Means for Your Strata Corporation

For Strata Councils

Immediate Action Required: If your strata corporation doesn't have a current depreciation report (completed within the last five years), you need to begin the process of obtaining one. This isn't optional—it's a legal requirement.

Budget Planning: Factor depreciation report costs into your annual budget. Costs for the report will vary according to:

• Location and access;

• Size and complexity of the complex;

• Available documentation;

• Time line for delivery

  
  

Long-term Planning: Use this as an opportunity to establish proper long-term maintenance planning and reserve fund management.

For Property Managers

Client Education: Many strata councils may not fully understand the new requirements. Proactive education and guidance will be essential.

Vendor Relationships: Establish relationships with qualified professionals who can prepare depreciation reports efficiently and cost-effectively.

Compliance Monitoring: Develop systems to track which properties need reports and when renewals are due.

For Strata Owners

Financial Impact: Expect potential special assessments or increased strata fees as corporations work to comply with new requirements and implement report recommendations.

Property Value Protection: Proper depreciation reporting and maintenance planning help protect and potentially enhance property values over time.

Special Considerations for Bare Land Strata

Bare land strata corporations face unique challenges when it comes to depreciation reports. Unlike traditional strata buildings, bare land stratas must assess:

Infrastructure Components

• Private roads and pathways

• Underground utilities (water, sewer, electrical)

• Stormwater management systems

• Common area facilities (clubhouses, recreational amenities)

• Landscaping and irrigation systems

Assessment Challenges

• Access limitations: Underground infrastructure may require specialized equipment for assessment

• Seasonal factors: Some components may only be assessable during certain times of year

• Municipal interface: Understanding the boundary between private strata infrastructure and municipal systems

• Rural considerations: Remote locations may present additional assessment and maintenance challenges

Professional Requirements

Bare land strata depreciation reports often require engineers with specific infrastructure expertise, potentially increasing costs compared to traditional building assessments.

Real World Example

We recently worked with a rural bare land strata where private septic infrastructure was difficult to assess due to seasonal groundwater conditions—highlighting the importance of planning early and engaging the right professionals.

Understanding the Five-Year Cycle

The shift from a three-year to five-year renewal cycle provides several advantages:

• Reduced frequency of major expenditures for report preparation

• More meaningful assessments as building conditions change more noticeably over five years

• Better alignment with typical building maintenance cycles

• Cost efficiency for strata corporations

However, this doesn't mean maintenance planning should be less frequent. Annual review and updates of your depreciation report findings remain best practice.

Professional Requirements: What's Coming in 2025

Starting July 1, 2025, depreciation reports must be prepared by "designated professionals." The BC government has identified six specific professional designations that qualify individuals to prepare depreciation reports:

The Six Designated Professional Qualifications

(Include a comparison table graphic here to show designations, designation bodies, and areas of expertise)

1. AACI - Accredited Appraiser Canadian Institute

• Designation Body: Appraisal Institute of Canada (AIC)

• Expertise: Property valuation, building assessment, and reserve fund analysis

2. CRP - Certified Reserve Planner

• Designation Body: Real Estate Institute of Canada (REIC)

• Expertise: Reserve fund studies, long-term capital planning

3. P.Eng. - Professional Engineer

• Designation Body: Engineers and Geoscientists British Columbia (EGBC)

• Expertise: Structural and infrastructure analysis

4. Professional Architect

• Designation Body: Architectural Institute of British Columbia (AIBC)

• Expertise: Building envelope and systems

5. Certified Building Inspector (Advanced Qualifications)

• Expertise: Building system evaluation and safety

6. PRA - Professional Reserve Analyst

• Designation Body: Association of Professional Reserve Analysts (APRA)

• Expertise: Reserve fund analysis and financial modeling

Why This Diversity Matters

Depreciation reports require a combination of technical and financial skills:

• Engineers and architects bring deep technical analysis

• Appraisers and planners (AACI, CRP, PRA) contribute financial strategy and modeling

Matching Professionals to Property Type

Traditional Strata: Any designation works; select based on experience and scope

Bare Land Strata: Engineers + AACI or CRP for infrastructure and financial synergy

Mixed-Use: Look for property-type experience regardless of designation

Financial Planning Impact

Immediate Costs

• Report preparation

• Professional services (engineers, inspectors, planners)

• Potential special assessments for identified capital repairs

Long-term Benefits

• Smarter budgeting and fewer emergency repairs

• Stronger reserve funds

• Enhanced property values

  
  

Top 5 Compliance Mistakes to Avoid

Avoid These Common Pitfalls:

• Waiting too long to book your report

• Choosing price over qualifications and experience

• Ignoring the report's recommendations

• Failing to provide site access

• Not communicating with owners.

• Action Steps for Compliance

  
  

If You Don't Have a Current Report

1. Contact designated professionals

2. Budget for the report cost

3. Gather documentation

4. Schedule the assessment early

5. Implement findings

   
   

If You Have a Recent Report

1. Confirm it’s less than five years old

2. Follow up on existing recommendations

3. Review and update your reserve fund

4. Schedule your next report proactively

   
   

Looking Ahead: Industry Evolution

Mandatory depreciation reports represent a major step forward for BC strata management. The shift will encourage:

• Specialized professional development

• Standardization of reporting and methodology

• Cross-discipline collaboration

• Adoption of assessment technologies

• Increased transparency and trust in strata governance

  
  

Conclusion: Embracing the New Reality

The elimination of deferral votes marks a new era in proactive strata property management. Though the compliance burden may feel significant, the long-term payoff is better maintained buildings, stronger reserve funds, and enhanced property value.

Those who take early action—working with qualified professionals and leveraging depreciation reports as strategic planning tools—will be better positioned to thrive in this new regulatory environment.

Need a compliant depreciation report prepared by a designated professional? Contact us at Jackson & Associates or www.reservefund.ca to get started.

For specific questions about your strata corporation's depreciation report requirements, consult with qualified professionals and refer to the current Strata Property Act and regulations. This article provides general information and should not be considered legal advice.

About the Author: The author holds both AACI (Accredited Appraiser Canadian Institute) and CRP (Certified Reserve Planner) designations, qualifying them as a designated professional under BC's new depreciation report requirements effective July 2025. With expertise in both property valuation and reserve fund planning, they bring comprehensive knowledge to strata property financial planning and depreciation analysis.

Related Resources:

• BC Government depreciation report requirements

• Appraisal Institute of Canada

• Real Estate Institute of Canada