Providing Peace of Mind for your Depreciation Report Needs

The Province of BC has new regulations that identify 6 designated professions that are qualified to produce Depreciation Reports effective as of July 1, 2025. Included in those 6 designations are accredited appraisers and certified reserve planners. NLD Consulting is proud to have qualified experts that hold AACI’s and/or CRP designations with standards managed by the Appraisal Institute of Canada (AIC) and Real Estate Institute of Canada (REIC) respectively. Our team has gone through rigorous educational requirements and training to meet standards and requirements as set out by the BC Legislation.

The Depreciation Report will provide at least 3 different funding models for the Strata Corporation’s consideration. These models will describe different ways of funding the CRF over a period of 30 years, and will also include predicted timing and scale of replacement costs for the various shared building components which will require repair or replacement.

Therefore the Depreciation Report can be a valuable tool for budgeting and planning the repair and replacement schedule for your Strata Corporation.

The Depreciation Report will analyze the current state of your CRF fund relative to the long-term financial obligations of the Strata Corporation to repair and replace the various shared building components. This review will provide an indication if your Strata Corporation is already on a proper funding path based on present contributions, or if additional funding may be necessary to adequately cover upcoming costs.

It is highly likely that 1 or more of the funding model scenarios presented in the finished report will recommend increased contributions and may also reveal if future special levies may be required. However, the funding recommendations in a Depreciation Report only deal with the contributions to the CRF, not to the operating fund.

No, the Strata Corporation is under no obligation to follow the recommendations or any of the funding models in the report. However as in the past, BC legislation does dictate the minimum contribution levels a Strata Corporation must contribute into the CRF. This contribution level is the equivalent of 10% of their operating budget on an annual basis.

It is also important to know that following the minimum BC legislated CRF contribution requirements will result in guaranteed special levies for most types of strata corporations at some point in the future. This level of funding is simply inadequate to provide for relatively stable long term CRF contributions.

The fee to conduct a Depreciation Report is affected by primarily:

• a) The size/scale of the Strata Corporation, including total number of strata lots;
• b) The complexity of the Strata Corporation, including number of reserve components, and legal structure of the development (eg. Sectioned Strata, Phased Strata, Air Space Parcels)
• c) The age of the Strata Corporation, if important documents such as Architectural drawings are unavailable.

The typical fees for a Depreciation Report will range from a few thousand dollars for the most basic small Strata Corporation, to well over ten thousand dollars for a large complex Strata Corporation. However, on a cost per owner basis, Depreciation Reports are inevitably the most costly per owner in small Strata Corporations, and the least costly per owner due to economies of scale for large Strata Corporations. For a no-obligation, free Depreciation Report proposal/quotation, please complete our Quick Quote.

The time frame for completion of a Depreciation Report from the date ordered to finalized report will take over one month for the most straight forward assignment, to several months for highly complex Strata Corporations. This is due in part to the typical process for document gathering (which may often take weeks to gather), as well as the timing/frequency of Strata Council meetings. Therefore, if the goal is to incorporate recommendations from a Depreciation Report into an upcoming annual budget, a lead time of at least a few months will be necessary.

The BC legislation effective July 1st, 2024 requires a new Depreciation Report be conducted every 5 years. If there are any additional questions you would like answered, feel free to Contact Us at your convenience for further information.