Who Is Qualified To Prepare A Depreciation Study?
In order to comply with the new regulations under the Strata Property Act, depreciation studies must be completed by a qualified individual with the knowledge and expertise to understand the individual components, scope and complexities of common and limited common property as well as common assets which the Strata Corporation must maintain. Premium Urban Design has staff experienced in the completion of these reports, and would be pleased to assist Strata Corporation with this important step in their planning process.

How Often Is A Depreciation Report Completed?
The new regulations require a Depreciation Report to be completed every three years including an onsite inspection after the initial report is completed for the strata corporations who are not exempt.

How Much Does A Depreciation Report Cost?
Preparation costs for Depreciation Report greatly vary. Professional fees for service are dependent on many factors such as; size, location, style (condo vs. town-home), access to original architectural drawing/engineering reports, past contractor quotes and documents on previous repairs.
The subsequent report may only require updating of the original report, however the asset will have aged since the first report and other factors such labour and replacement costs in addition to interest and inflation rates can also change over this period. Regardless whether it is the initial report or subsequent reports, on-site visual inspections are required and all valuation forecasting is to be established for at least 30 years
Our process at Premium Urban Design is to provide a complimentary, formal proposal to the strata council or associates acting on their behalf.

How Does A Depreciation Report Affect Third Party Relationships?
Experience elsewhere in Canada has indicated that a Depreciation Report is also beneficial to a variety of third party sources including: insurance and mortgage providers, mortgage insurers and most notably, by prospective purchasers. This report may assist buyers with their mortgage qualifications, identify insurance risk and to help them understand any potential liability prior to making a purchase. Accuracy and dependability of the report is critical, for the strata corporations’ accountability to all third parties relying on the information

How Does Strata Prepare?
Strata Corporations can support the preparation of a Depreciation Report and greatly reduce expenditures by gathering all records and documents that are specific to the individual type of Strata Corporation.

The Depreciation Report begins with a comprehensive account of all strata records, building plans/Engineer reports, warranties, registered documents, maintenance manuals/logs, and information applicable to operations and repairs. Following this evaluation, an onsite inspection will be completed to identity each element of the building and establish the condition as well as individual service needs of each particular area.

What Is The Financial Impact?
A Depreciation Report will bring more equality to existing and prospective owners as irregular ongoing expenses will be offset by any consistent contributions made to the reserve fund. Special levies (a request for additional monies) occur less frequently, allowing each strata owner to anticipate their individual strata costs with more confidence creating less financial hardship. Funding extensive repairs and replacements will become predictable versus deferring maintenance due to a lack of reserve money. Ultimately this maximizes the life expectancy of each component.
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