How to Read Your Strata's Financial Statements
Most councils check the bank balance and move on. Four numbers in the package you already receive will tell you whether a special levy is coming, years before it arrives.
Every month your strata manager sends council a financial package. Most councils open the last page, check that the bank balance looks roughly like last month's, and move on. Then a special levy arrives and nobody can explain how the building got there.
The package is not complicated once you know what each page is for. Four numbers tell you most of what you need, and all four are on statements you already receive. Here is how to read them.
What you should be receiving
The Strata Property Act requires the strata corporation to keep books of account showing money received and spent and the reason for each. In practice a competent manager turns that into a monthly or quarterly package containing:
- A balance sheet — what the corporation owns and owes at a point in time
- An income and expense statement — what came in and went out over the period, usually against budget
- A contingency reserve fund statement — the reserve's opening balance, contributions, spending and closing balance
- An accounts receivable or arrears listing — who owes what, and for how long
- A bank reconciliation — proof the books agree with the bank
- Copies of invoices paid in the period, or a cheque and payables listing
If you are not getting all of these, ask. They are not a courtesy; they are how council discharges its duty to oversee the corporation's money.
The balance sheet: three lines that matter
Read it as a snapshot. Assets on one side, liabilities and fund balances on the other.
Cash, split by fund. You should be able to see operating cash and contingency reserve cash separately. If they appear as one number, that is the first question to ask.
Accounts receivable. Money owed to the strata, overwhelmingly unpaid strata fees. A number that grows every month is a collections problem, not a rounding issue.
Fund balances — operating and contingency reserve. These are the accumulated positions of each fund, and they are the closest thing your building has to a report card.
The line councils miss most often is a "due to / due from" between the funds — an internal borrowing where operating has spent reserve cash, or the reverse. It is not automatically improper, but it should be deliberate, minuted, and repaid. An unexplained inter-fund balance drifting upward month after month means the operating fund is quietly living on the reserve.
The income and expense statement: read the variances, not the totals
This is the operating fund over the period, and the useful column is the one comparing actual to budget.
Ignore small variances. Look for:
Structural overspending. A line that is over budget every single month is not a bad month; it is a bad budget assumption. Insurance, utilities, and waste removal are the usual suspects in BC right now.
Suspiciously good numbers. An expense line at a fraction of budget usually means deferred work, not efficiency. Landscaping at 40% of budget in September means the work did not happen.
Repairs and maintenance versus contingency spending. Routine work belongs in operating. Major component replacement belongs in the reserve. Repairs charged to the wrong fund distort both.
Year-to-date, not just the month. One month tells you almost nothing. The year-to-date column against the same proportion of budget tells you whether the year is on track.
Seasonality, before you panic or relax. Snow removal, landscaping, heating and irrigation are not spread evenly across the year, so a February landscaping line at 5% of budget and a February snow-removal line at 200% are both normal. What is not normal is a manager who cannot tell you which of your lines are seasonal and which are flat. Ask once and write the answer down; it makes every subsequent month faster to read.
If your building is heading for a deficit, the options and consequences are set out in what happens when a BC strata goes over budget. And when there is a surplus at year end, it does not simply vanish — the Act sets out what may be done with it, including carrying it forward or moving it to the reserve.
The contingency reserve fund statement: the number that predicts your future
Most owners think of the CRF as savings. It is better understood as the building's funded liability for wearing out.
Three things to check.
The balance, against the depreciation report. Your depreciation report projects what the building will need and when. The only meaningful question about your reserve balance is whether it is on the path that report assumes. A healthy-looking $180,000 is not healthy if the roof is due in four years at $400,000. How much should a BC strata's contingency fund be covers the estimating method, and BC strata depreciation reports and the 2026 deadline covers the obligation to have one.
The annual contribution. The Act sets a minimum contribution, and a minimum is exactly what it sounds like. Buildings that contribute the legal minimum for a decade are the buildings that levy.
Withdrawals. Spending from the reserve generally requires a vote of owners at a general meeting, with a narrow exception for genuine emergencies. Any withdrawal on the statement should trace back to a resolution in the minutes. If it does not, that is a serious question, not a bookkeeping query.
If the picture is worse than you hoped, your depreciation report says you are underfunded — now what is the practical next step, and strata loan, special levy, or higher fees covers the funding routes.
The arrears listing: read the ageing, not the total
A total of $9,000 outstanding tells you nothing. The ageing — current, 30, 60, 90-plus days — tells you everything.
A large current balance days after fees were due is normal. A balance sitting in the 90-plus column is a collections failure, and it compounds: the longer it runs, the harder it is to recover, and there are limitation periods that eventually bar collection outright.
Ask three questions each month. Is any single account growing? Has the required notice been sent? Is the strata's collection process being followed consistently for everyone, or only for the unpopular owners? Selective enforcement is its own liability. What a BC strata can do when an owner doesn't pay strata fees sets out the escalation path.
The bank reconciliation: the page nobody reads
It is the one page that proves everything else is real. It ties the closing bank balance to the closing book balance, explaining the difference with outstanding cheques and deposits in transit.
You do not need to audit it. You need to confirm three things: that it exists, that it is current, and that any reconciling item is small and recent. A stale reconciliation, or one carrying old unexplained items, is the single strongest warning sign in a strata financial package. Client funds in BC are held in trust by a licensed brokerage precisely because this matters.
Four numbers to track every month
Strip everything else away and watch these:
- Operating actual versus budget, year to date. Are you living within the budget owners approved?
- Contingency reserve balance against the depreciation report's projection. Are you funding the future or borrowing from it?
- Arrears over 60 days. Is money owed being collected?
- Any inter-fund balance. Is one fund propping up the other?
Put those four in the minutes every month. A council that has watched them for a year is never blindsided at budget time — and budget season stops being an argument, because the numbers have been in front of everyone all along.
When the statements themselves are the problem
Sometimes the issue is not the building's finances but the reporting. Packages arriving months late, statements that change retroactively, no arrears ageing, no reconciliation, or a manager who cannot explain a line item are all failures of service rather than of the building.
Ask for it in writing, once, specifically. If the answer does not improve, signs it's time to switch your strata management company and how to measure the value of your strata management company are the next steps. For self-managed buildings where the volunteers are doing their best with a spreadsheet, financial-only strata management buys the reporting without the full service.
Frequently asked questions
What financial statements should a BC strata council receive? At minimum a balance sheet, an income and expense statement against budget, a contingency reserve fund statement, an arrears listing with ageing, a bank reconciliation, and supporting invoices. The Act requires books of account showing money received and spent and the reason for it.
How do I know if my strata's contingency reserve fund is healthy? Compare the balance and the annual contribution against your depreciation report's projections, not against a rule of thumb. A reserve is adequate only in relation to what the building is going to need and when.
What is a due to / due from between strata funds? An internal borrowing between the operating fund and the contingency reserve fund. It is not automatically improper, but it should be deliberate, minuted and repaid. A balance growing quietly month after month means operating is being funded from the reserve.
Can a BC strata spend contingency reserve money without a vote? Generally no. Spending from the reserve requires approval by owners at a general meeting, with a narrow exception for genuine emergencies. Every withdrawal on the statement should trace back to a resolution recorded in the minutes.
How often should a strata council review financial statements? Monthly, at the council meeting, with the key figures recorded in the minutes. Reviewing them only at budget time is how councils end up surprised by a levy.
Related reading
- What Do Strata Fees Cover in BC? A Plain-English Breakdown
- How Much Should a BC Strata's Contingency Fund Be? (+ How to Estimate)
- What Happens When a BC Strata Goes Over Budget
- What a BC Strata Can Do When an Owner Doesn't Pay Strata Fees
- Your Depreciation Report Says You're Underfunded — Now What?
The record-keeping and fund rules sit in the Strata Property Act — Part 4 for records, Part 6 for the operating fund and contingency reserve fund.
Clear monthly reporting is the cheapest governance a strata can buy. Onehive provides strata management and financial-only management across Metro Vancouver — request a proposal.
Written by
Onehive Property Management manages strata corporations and rental properties across British Columbia. Our guides are written by the people who do the work — council meetings, budgets, insurance renewals and all — and reviewed against the Strata Property Act before publishing.