How to REALLY Understand a Strata Depreciation Report BC

If you are buying a strata-held property in BC, you’ll likely be given a depreciation report to review. But the thing is, how do you make it make sense? Liz Penner, your top-realtor in Fraser Valley, gives you an insight into the value of understanding Depreciation Reports. 

Strata Depreciation Reports: What You Need to Know

Strata depreciation reports are a relatively new requirement in BC, requiring strata councils to provide them in 2011. The need for these reports was introduced to give strata councils a planning tool for extensive capital repairs. At the same time, it provides prospective home buyers with an accurate snapshot of the condition of the property they are purchasing.

Strata councils with 5, or more, units are required to vote on getting a depreciation report every year but can opt-out. This means that not all strata councils will have a depreciation report. This is particularly true for newer developments that are still under a new home warranty and smaller ones with less than 20 units.

What is a Strata depreciation report?

A strata depreciation report is typically an 80-100 document prepared by an engineering firm to assess the physical condition of the structures on the building and the associated components. 

The document is extensive, containing images of the components with written details, including each component’s age, condition, estimated useful life, and replacement cost.

What does a strata report look like?

Provincial regulations require that a depreciation include an inventory and evaluation of a building’s common property elements including:

• structure,
• exterior (such as roofs, roof decks, doors, windows and skylights),
• systems (such as electrical, heating, plumbing, fire protection and security); and
• common amenities (such as fitness room, pool, bike lockers etc) (Baragon, Ellen, Jan 8, 2021).

Why do you need a Strata depreciation report?

A strata depreciation report is an essential tool in helping you assess the condition of the property you are buying. This is particularly important as prospective home buyers are rarely given access to mechanical rooms to determine the condition of the building elements that they will soon be responsible for paying to repair.

Depreciation reports can be tricky to read as they are long, detailed, and technical. What’s more, is that they tend to offer the owners several options to fund capital projects. The reports are often several years old, and it can be hard to tell what recommendations have been adopted by the strata council.

This can be further complicated by a strata council or property managers that are not immediately available to answer questions about the documents presented.

This is where it pays off to have a great realtor. When you purchase a home, realtors can read and interpret the depreciation report, the strata documents, and the financial statements of the strata you are buying into. 

A great realtor must explain the reports to you in a way that makes them easy to understand. Concerns about the documents such as an upcoming assessment or significant repairs, can be discussed and addressed professionally.

Hire a Trusted Realtor Today

Thinking of buying or selling a strata-held property in BC? Get in touch with Liz Penner today, your Top-Selling Realtor in Langley, Surrey, & Cloverdale. I’ll help you find the right home for you. Interested in listings around the Fraser Valley area? Feel free to visit our website or dial 604-376-3350 now.

For more information about Depreciation Reports in BC, check out the link below:

References:

Baragon, Ellen. Jan 8, 2021. Strata Depreciation Reports: What REALTORS® and Clients Need to Know. BCREA Practice Tips. Accessed on Feb 28, 2021. Accessed from: https://www.bcrea.bc.ca/uncategorized/strata-depreciation-reports-what-realtors-and-clients-need-to-know/