Reading a strata depreciation report like an engineer

Most BC buyers receive their strata document package, scan the depreciation report’s cover, and skip to the disclosure statement. That’s how six-figure surprises become someone else’s problem — usually yours.

A depreciation report is a 30-year capital-expenditure forecast for a strata corporation. The report ranks every major building component, projects its end-of-life, and estimates the cost to repair or replace it. Done well, it’s the closest thing to an engineer’s report you’ll see during a typical purchase.

The sections that matter

1. Component inventory — how the engineer categorised the building. Sloppy categorisation here cascades into bad cost estimates everywhere else.
2. Condition assessment — the engineer’s read on remaining useful life. Look for components in poor or very poor condition with a short remaining life.
3. Funding model — does the strata’s current contingency reserve fund (CRF) and contribution rate cover the forecast? Or is a special levy implied?
4. Special levies forecast — many reports flag expected levies. Read this carefully; some are coming sooner than the headline year.
5. Building envelope & mechanical — these are the line items that matter for our purposes: roof, building envelope, plumbing risers, heating system, elevators.

The three line items that should change your offer

• Building envelope work projected in < 5 years. Even if a special levy isn’t yet voted, this is real money you’ll likely contribute to.
• Roof replacement in < 5 years without a corresponding CRF cushion.
• Underfunded depreciation contributions. If the engineer’s recommended contribution rate exceeds the strata’s actual rate by more than ~20%, you’re being asked to fund someone else’s deferral.

We model these explicitly in the strata audit step of every buying engagement. The Property Score doesn’t yet — but the methodology page lays out where that module is going.