What is a depreciation report and why do we need one?

As per section 6.2 of the Strata Property Act, a depreciation report must satisfy the following:

1. A physical component inventory and evaluation
2. A summary of repairs and maintenance work for common expenses respecting the items that usually occur less often than once a year or that do not usually occur;
3. A financial forecasting section
4. The name of the person from whom the depreciation report was obtained by
5. The date of the report;
6. Any other information or analysis that the strata corporation or the person providing the depreciation report considers appropriate.

Strata corporations are required to obtain a detailed depreciation report to outline in the detail the condition of the building and the maintenance it will need over the next 30 years. The purpose of doing so is to outline how strata councils will deal with the problems and ensure that adequate funds are put aside each fiscal year in order for renewal work to be carried out at the appropriate time before asset failure occurs and with minimal financial hardship for the owners. The Act requires that the depreciation report be updated every three years.