North Country Appraisals provides Reserve Fund Depreciation Studies and Appraisals for Strata Corporations in BC. These Depreciation Reports, also called Capital Reserve Fund Studies, are now mandatory for Strata Corporations in British Columbia.
Our professional appraisals team is well-positioned to provide a clear, comprehensive, independent and accurate analysis of your Strata Corporation’s building and common property components. Our BC Depreciation Reports provide Strata Corporations with a list of current deficiencies, future projected expenditures, costs and a financial plan for components that could need replacing or repairing over the next 30 years.
In reference to Our History, in his early adult years in 1969 Harvey’s Technical Report prepared for his Technology Diploma issued by SAIT Polytechnic was on Building Rehabilitation which shows his keen interest in the nuances of building construction and how buildings operate during their life. With the creation of the CRP designation by the Real Estate Institute of Canada, Harvey’s involvement with the management and administration of the NCA Group provides the company and its associates with superior expertise than can benefit the discriminating strata corporation, management agencies and insurance adjusters.
What is a Depreciation Report?
A Reserve Fund Study / Depreciation Study is:
▶ A financial document provides the basis for the funding of major repairs and replacement of the common elements and assets of the corporation.
▶ A depreciation report is a legislated requirement for strata corporations in British Columbia (there is an opt out clause).
Depreciation reports detail the following:
▶ The common components of the strata (a detailed inventory) such as roof, windows, siding, building envelope, etc.
▶ The current condition and expected lifespan of these components;
▶ The costs and timing to replace/repair these components – both current and future costs;
▶ How much money the strata currently has set aside (contingency fund);
▶ Detailed plans for funding the future costs of the common assets (funding models).
▶ Conduct financial analysis to provide 3 funding options to achieve goals strata goals.
Why Do A Depreciation Report?
Benefits to the Strata
▶ Organized plan of ‘major’ repair and replacement timing and expenses;
▶ Assists in determining the appropriate for the annual Contingency Reserve Fund (CRF) contribution
▶ Proactive management and planning
Benefits to the Owner
▶ Better understanding of the value of your asset
▶ Personal financial planning
Risks of Opting Out
▶ Lenders and mortgage insurers will start to use the depreciation report as a tool to manage risk.
▶ Real estate is typically the largest asset most Canadians purchase in their life time. Buyers purchasing strata units will demand depreciation reports to ascertain the purchase risk.
▶ Marketing units and longer listing times could potentially lead to discounted selling prices as lenders and mortgage insurers may look unfavourably upon high ratio buyers due to unknown future strata fees and special assessments.
▶ The absence of a depreciation report may make it more difficult for a vendor to sell their unit.
Our BC Depreciation Reports may include the following:
A comprehensive list of components that could require repair or replacement over the next 30 years including:
▶ structure
▶ building systems: electrical, heating, fire protection, plumbing, security systems
▶ building exterior – roofs, roof decks, windows, skylights, doors
▶ utilities
▶ common facilities and amenities
▶ parking facilities
▶ landscaping
▶ balconies and patios
▶ common area and interior finishes including hallways
▶ green building components where applicable
A financial forecast and budget to estimate financial requirements for the Strata Corporation over a specific time period (30 years?)
A summary of repairs and maintenance work for common expenses