What is the Purpose of a ‪#‎DepreciationReport‬ ?

Posted on by Premium Urban Design

What is the Purpose of a ‪#‎DepreciationReport‬ ?

The purpose of a depreciation reports is to establish:

• What is owned
• How much money is in the Contingency Reserve Fund
• When each building system will likely need to be repaired/replaced
• Estimates the future cost for repairs/replacement
• How to prepare a financial arrangement for the future

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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Spend More Time On Planning and Design… Spend Less!

Posted on by Premium Urban Design

Good design and planning are key to any successful home building or renovation project. Any extra time spent on the planning will save you in time loss and money throughout the construction phase. After getting a general understanding of the regulations of building it is important to understand your goal. Knowing your “why” will get you through the rough times – and there will be issues with every good plan… no matter what.

When thinking about design you should be thinking about four key elements:

1. Function

Understanding your “Why” purpose of your building project. Knowing your long term goals or short term goals will save your quick update and/or flip? Always consider the project benefits and weather it will serve you financially? Know that there are different ways to achieve the end result. Considering hiring a professional to flush out your wants, needs and ideas.

2. Form

Mass and shape define form. Mass refers to the volume defined by a structure relative to its surroundings. Mass can be controlled by your surroundings, cost and local regulations. Shape is the composition and complexity of the surface planes. Shape can be controlled by cost and the materials proposed.
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3. Materials

Both exterior and interior building materials should be chosen based on upon their suitability for the building type, durability, impact on the environment, climatic conditions, code, cost, availability, character of the established design.

4. Cost

Do your home work…

Establishing a good budget for securing proper financing will help define that overall design. Solidifying your cost and design will help through your next steps and will give you a clear picture to reaching your overall goal. Know who you are hiring and always get a contract with a competitive quote… this will help support your budget, and minimize changes and hidden expenses. Establishing a time line.

When to get help?

If you have been collecting articles and magazines but don’t know how to put those ideas on paper or if you know little about construction, then search for help from a professional designer. Most clients have problems visualizing 2D drawings, so when working with a professional they can simplify the design for process and give you a better view into your ideas by using 3D. It is always easier and cheaper to change your mind on paper then half way through your building project. Keep in mind that you may also require the assistance of engineers or specialists depending on your local permit requirements or complexity of project.

Note:

As a suggestion – always allow for room in the budget for a professional to ensure that you are covered if and when a change occurs and they do… retain the services of an engineer.

When building remember to

Prepare, Plan, Educate, and Communicate.