Why Lenders in BC Are Demanding Fresh Depreciation Reports Before Approvals
- ENGIPRO
- 13 minutes ago
- 2 min read
The Financing Surprise No One Wants
A Surrey strata recently applied for a $2M loan to replace elevators. They expected smooth approval—until the lender refused their 2018 Depreciation Report as “outdated.” The strata had to rush a new report, delaying funding by months and raising costs.
This story is becoming common across BC. Lenders want fresh Depreciation Reports—and here’s why.
Why Lenders Require Updated Reports
Risk Management
Banks need assurance that the strata can handle big repairs without defaulting.
Alignment with CMHC Standards
CMHC and most lenders now expect DRs to be less than 3 years old.
Capital Reserve Adequacy
Reports with inflation-adjusted costs show whether the CRF is realistic in today’s market.
Transparency for Investors
Fresh DRs prove strata councils are proactive, lowering the lender’s risk exposure.
The Real Cost of Outdated DRs
Loan delays
Higher interest rates (risk premiums)
Strained negotiations with owners
Lost contractor pricing during delays
Best Practices for Strata Councils
Update DRs every 3 years (even if law allows 5)
Engage licensed engineers (P.Eng) for credibility
Include benchmark analysis to show reserve fund sufficiency
Plan updates before loan applications
FAQ
Q: Will banks accept a 5-year-old DR?
A: Increasingly no—3 years is becoming the informal standard.
Q: Can we update just the financials?
A: Some lenders allow it, but most prefer a full update.
Conclusion
In BC’s lending landscape, an outdated Depreciation Report is a deal-breaker. For stratas, keeping reports current is no longer optional—it’s a requirement for access to financing, smoother approvals, and financial credibility.
Other Resources:
CMHC – Multi-Unit Mortgage Loan Insurance - https://www.cmhc-schl.gc.ca/professionals/project-funding-and-mortgage-financing/mortgage-loan-insurance/multi-unit-insurance
BCFSA – Depreciation Report Regulations - https://www.bcfsa.ca/industry-resources/real-estate-professional-resources/knowledge-base/advisory/strata-property-regulation-changes-strata-depreciation-reports
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