What Does a Depreciation Report Look Like?

A depreciation report is more than just a document—it’s a roadmap for maintaining and managing your strata property’s value over the long term. But for many strata councils, property managers, and owners, the question remains: “What does a depreciation report actually look like?”

In this blog, we’ll walk you through the typical structure of a depreciation report, explain the key components, and show why working with ENGIPRO ensures you get a detailed, actionable, and compliant report.

What Is a Depreciation Report?

A depreciation report evaluates a building’s common elements—such as roofs, elevators, plumbing, and windows—and provides a financial plan for their maintenance and replacement. It’s required by the BC Strata Property Act for most strata corporations and is typically updated every five years.

But what does the final document actually look like? Let’s break it down.

Key Components of a Depreciation Report

A typical depreciation report includes the following sections:

1. Executive Summary

   This Executive Summary provides an overview of key insights from the depreciation report, offering a quick snapshot of the property’s financial and physical health. It includes:

   • Property Overview: Key details about the building, including its type, size, and management.

   • Financial Health: An assessment of current reserve fund adequacy, future funding requirements, and contributions.

   • Funding Models: Scenarios for reserve fund contributions and their impact on financial planning.

   • Recommendations: Expert advice on the most balanced funding strategies to maintain property value and sustainability.

   This section is designed to provide strata councils and owners with a clear and concise summary of the property’s current condition and long-term maintenance needs.

   
   

2. Inventory of Common Components

   This section lists all the common property components included in the assessment, such as:

   • Roofing systems

   • Building envelope (e.g., siding, windows)

   • Mechanical systems (e.g., HVAC, elevators)

   • Electrical systems

   • Interior finishes in common areas (e.g., lobbies, hallways)

   Each item is categorized with details about its current condition, remaining useful life, and priority for repair or replacement.

   
   

3. Condition Assessment

   The condition assessment is the heart of the report. It provides detailed evaluations of each building component, often supported by:

   • Photographs: Clear images showing the current state of key components.

   • Condition Ratings: A rating system (e.g., Excellent, Good, Fair, Poor) to indicate the urgency of repairs or replacements.

   • Narrative Comments: Expert insights into potential issues, expected lifespans, and maintenance recommendations.

     
     

4. Financial Forecast

   This section outlines the costs of future repairs and replacements, typically projected over 30 years. It includes:

   • Estimated Replacement Costs: Based on current market prices and expected inflation rates.

   • Repair Schedules: A timeline showing when each component is likely to require attention.

   • Inflation and Reserve Fund Calculations: Projections for reserve fund contributions to ensure adequate savings for future expenses.

     
     

5. Reserve Fund Analysis

   The reserve fund analysis evaluates whether the strata corporation’s current savings are sufficient to meet future needs. It includes:

   • Current Reserve Fund Balance: How much is already saved.

   • Recommended Contributions: Annual amounts required to avoid shortfalls.

   • Funding Scenarios: Options for increasing contributions or deferring non-critical repairs.

     
     

6. Appendices

   The appendices include comprehensive supporting materials and references, such as:

   • Qualifications: Credentials of the professionals involved in preparing the report.

     Assumptions and Limiting Conditions: Key assumptions and limitations that guided the analysis.

   • Strata Property Act and Regulation Excerpts: Relevant legislative references for context.

   • Glossary of Terms: Definitions of key terms used throughout the report for clarity.

     
     

The Risks of Skipping a Depreciation Report

While some strata corporations may choose to waive their depreciation report, this decision can lead to significant risks:

• Financial instability: Without accurate projections, it’s difficult to save adequately for future repairs.

• Decreased property value: Poor maintenance planning can deter buyers and reduce overall property value.

• Legal or compliance issues: Strata corporations that fail to meet their obligations under the Strata Property Act may face challenges in legal or financial disputes.

What Makes a Good Depreciation Report?

Not all depreciation reports are created equal. A high-quality report should be:

• Comprehensive: Covering all major components and providing detailed financial projections.

• Actionable: Offering clear recommendations and timelines for maintenance and replacements.

• Compliant: Meeting the requirements of the BC Strata Property Act and BCFSA guidelines.

  
  

At ENGIPRO, we deliver reports that excel in all these areas, giving strata corporations the insights they need to plan confidently.

Why Choose ENGIPRO for Your Depreciation Report?

Here’s why strata councils and property managers across BC trust ENGIPRO for their depreciation reports:

1. Certified Expertise: Our team includes Professional Engineer (P.Eng.), Certified Reserve Planner (CRP), Professional Reserve Analyst (PRA), and Chartered Civil Engineer (CEng MICE) experts. We deliver reports that meet the latest legislative standards and provide reliable guidance for long-term financial planning.

2. Clear Reporting: We use visual aids, straightforward language, and actionable recommendations to make our reports easy to understand.

3. Fast Turnaround: We deliver comprehensive reports within 30 days, so you can act quickly.

4. Competitive Pricing: Our customized pricing ensures affordability without compromising quality. Learn more about our pricing here.

5. Compliance Guaranteed: Every report meets the latest BC Strata Property Act requirements.

Conclusion: What Your Depreciation Report Should Deliver

A well-prepared depreciation report is more than a checklist—it’s a vital tool for protecting your property’s value, planning future expenses, and ensuring compliance. By partnering with a trusted firm like ENGIPRO, you can be confident that your report is accurate, actionable, and tailored to your property’s unique needs.

Ready to See What a High-Quality Depreciation Report Looks Like?

Contact ENGIPRO today to schedule your depreciation report and get the insights you need to manage your property effectively. With fast turnaround times, certified expertise, and a commitment to quality, ENGIPRO is your trusted partner for depreciation reports in BC.

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External Links:

1. BC Strata Property Act - https://www.bclaws.gov.bc.ca/civix/document/id/complete/statreg/98043_01

2. BC Reserve Fund Planning - https://www2.gov.bc.ca/gov/content/housing-tenancy/strata-housing/operating-a-strata/finances-and-insurance/the-contingency-reserve-fund-crf

3. BC Housing Depreciation Report Guidelines - https://www2.gov.bc.ca/gov/content/housing-tenancy/strata-housing/operating-a-strata/repairs-and-maintenance/depreciation-reports

4. BCFSA Depreciation Report Guidelines - https://www.bcfsa.ca/industry-resources/real-estate-professional-resources/knowledge-base/advisory/strata-property-regulation-changes-strata-depreciation-reports