Decoding Strata Financials – Depreciation Reports, Contingency Funds, and Strata Fees

Posted on Aug 28, 2025


In the first two posts of our series, we explored the basics of strata living and the role of the strata council and AGMs. Now it’s time to tackle what many buyers find the most intimidating part of strata ownership: the financials.Understanding how a strata manages its money is just as important as inspecting the unit you’re buying. Poor financial planning can lead to sudden “special levies,” skyrocketing fees, or even major disputes between owners. On the flip side, a well-funded strata means peace of mind, predictable costs, and a more stable investment.This guide will walk you through the key financial documents you’ll encounter as a buyer or owner: depreciation reports, the contingency reserve fund (CRF), the operating fund, and monthly strata fees.

Why Strata Financials Matter

When you buy into a strata, you’re not just purchasing your unit—you’re also buying into the shared financial health of the corporation.Think of it this way: if the building needs a new roof and there’s no money saved up, every owner (including you) will have to pay their share of the cost through a special levy. Depending on the size of the building, that could mean thousands—or even tens of thousands—of dollars.That’s why reviewing a strata’s financial documents before buying is critical. It helps you determine whether the community is well-prepared for the future or if you’re walking into a financial minefield.

Depreciation Reports – The 30-Year Roadmap

A depreciation report is one of the most important financial documents for any strata corporation. In British Columbia, most stratas with more than four units are required by law to obtain one.

What Is a Depreciation Report?

A depreciation report is essentially a 30-year forecast of the building’s repair and replacement needs. It’s prepared by professionals (engineers or qualified consultants) and includes:
  • An inventory of the building’s major components (roof, windows, plumbing, elevators, etc.).
  • The expected lifespan of each component.
  • The estimated cost of repair or replacement.
  • Funding models showing how the strata can pay for these costs over time.

Why It Matters for Buyers

If you’re buying a strata property, the depreciation report will tell you:
  • When big-ticket repairs are coming up.
  • Whether the strata has a realistic savings plan.
  • If special levies are likely in the near future.
For example, if the report shows that the roof needs replacing in five years and the contingency reserve fund is almost empty, you can expect a special levy.

The Contingency Reserve Fund (CRF)

The contingency reserve fund is the strata’s savings account for major repairs and emergencies. By law, part of your monthly strata fees must go toward the CRF.

What the CRF Pays For

  • Roof replacements
  • Elevator overhauls
  • Boiler or plumbing upgrades
  • Window replacements
  • Structural repairs
Basically, anything beyond routine maintenance.

Healthy vs. Unhealthy CRFs

A healthy CRF has enough funds to cover upcoming projects identified in the depreciation report. An unhealthy CRF is underfunded, meaning owners may face sudden levies when repairs are needed.As a buyer, you want to see steady contributions to the CRF and a balance that reflects the age and size of the building.

The Operating Fund

While the CRF is for long-term expenses, the operating fund covers the day-to-day costs of running the strata.

Examples of Operating Expenses:

  • Landscaping and snow removal
  • Janitorial and cleaning services
  • Garbage and recycling collection
  • Utilities for common areas (electricity, heating, water)
  • Minor repairs and supplies
  • Property management services
Each year, the strata council prepares a budget for the operating fund, which owners vote on at the AGM.

Monthly Strata Fees – What They Really Cover

Strata fees (sometimes called “maintenance fees”) are the monthly contributions owners make to support both the operating fund and the CRF.

Typical Inclusions in Strata Fees:

  • Building insurance
  • Common area utilities
  • Landscaping and exterior upkeep
  • Cleaning and janitorial
  • Repairs and maintenance of shared spaces
  • A portion allocated to the CRF
In some buildings, fees also cover:
  • Heat, gas, or water for individual units
  • Concierge or security services
  • Amenities like gyms, pools, or clubhouses

High Fees vs. Low Fees

Many buyers instinctively want the lowest strata fees possible. But low fees aren’t always a good thing. A building with very low fees may not be saving enough for future repairs, which almost guarantees special levies down the road.On the other hand, higher fees in a well-maintained building may mean the strata is financially responsible and prepared for the long term.

Special Levies – The Unwelcome Surprise

When the CRF doesn’t have enough money to cover a major expense, owners are hit with a special levy—an extra one-time payment.Examples of costs that trigger special levies:
  • Replacing a roof or plumbing system
  • Emergency repairs from unexpected damage
  • Renovations or upgrades voted on by the owners
The amount each owner pays is based on their unit entitlement (their share of the building, usually determined by square footage).Special levies can range from a few hundred dollars to tens of thousands, depending on the project.

Red Flags to Watch For

When reviewing a strata’s financial records, pay attention to:
  • Missing or outdated depreciation reports – suggests poor planning.
  • Low CRF balance – especially if the building is older.
  • Frequent special levies – indicates chronic underfunding.
  • High delinquency rates – if many owners aren’t paying fees, it’s a warning sign.
  • Unrealistic budgets – consistently underestimating expenses may lead to fee hikes.

What Buyers Should Request

Before finalizing a purchase, always review:
  1. Depreciation Report – to see future expenses.
  2. Financial Statements – to confirm CRF and operating balances.
  3. AGM and SGM Minutes – to spot upcoming levies or disputes.
  4. Strata Bylaws – to understand rules about fees, late payments, and fund contributions.
These documents will give you a clear picture of the building’s financial health.

How Owners Can Protect Themselves

If you already own a strata property, you can protect your investment by:
  • Attending AGMs and voting on budgets.
  • Reviewing financial statements annually.
  • Asking questions about long-term planning.
  • Supporting realistic fee increases that prevent surprise levies.
Remember, strata ownership is a group effort—the better the financial planning, the less painful the surprises.

Final Thoughts

Financial stability is the backbone of every successful strata. A well-managed strata with a healthy CRF, realistic operating budget, and up-to-date depreciation report will protect your investment and reduce the risk of unexpected costs.For buyers, reviewing financial documents is just as critical as inspecting the unit. For owners, staying engaged ensures your community remains financially secure.Strata fees aren’t just an expense—they’re an investment in the long-term health of your property.
Next in the series: Now that you understand the financial side of strata ownership, let’s look at the laws and regulations that govern all strata corporations in BC—including your rights and responsibilities as an owner.

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