McIntosh Perry will help take the pain out of depreciation reports for your strata council.
Not only are we one of Vancouver’s most experienced providers of depreciation reports, we know how to make them easy to understand.
We will clearly lay out the options and what they mean for your future prosperity, helping you avoid mistakes that other stratas have made. On request, our Strata Group lead, expert Doru Cornescu, can personally walk your team through the report and help them understand the results of potential decisions.
There are many more experts who stand behind each and every report we prepare. Our experienced engineers, technicians and technologists will accurately determine the condition of your building, parking garage, and other strata assets. They have unique tools at their disposal, like our internal database of real-world materials and equipment life expectancies, developed over our 45 year history.
Because time won’t stop in a few decades, our reports go further, providing cost projections 40 or even 60 years into the future rather than the usual 30.
Best of all, our reports cost less than you would think, thanks to the many efficiencies we’ve built into our process.
Ask for a free proposal for your next depreciation report. Call toll free 1-888-348-8991.
Why Have a Depreciation Report?
Maintenance and renewal of strata assets are essential for preserving property value. Being able to prove a healthy level of funding attracts desirable owners, allowing owners who sell to enjoy a healthy rate of return.
Planning for repairs and replacements makes financial sense, and allows the corporation to take advantage of approved investment opportunities, letting the market do some of the revenue-generating work.
Any strata corporation of five units or more must prepare a depreciation report every three years. While the corporation can vote to exempt themselves, doing so would mean missing an incredible opportunity to plan for the future. It also means that owners are forced to pay special levies that are often much larger if something fails completely due to neglect.
Fully Qualified for all Strata Types
McIntosh Perry has several decades’ worth of experience with residential, commercial, institutional and industrial building construction, including 500+ unit high rises. Having authored hundreds of depreciation reports, we’ve mastered the art of being more comprehensive in less time. We are fully insured for errors and omissions, as required by BC law.
What Your Depreciation Report Includes
Your strata corporation’s depreciation report will be fully compliant with the Strata Property Act and Regulations. It will contain both of the following key sections.
1. Complete Physical Inventory and Analysis
The purpose of the physical analysis is to confirm what the property consists of, its current condition, and note all expected repair or replacement dates. In part, the report is a complete inventory of all shared parts of the property, including the building enclosure (roof, walls, windows), building structure, and any interior systems like plumbing, HVAC and fire safety. Any assets that belong to the strata outside of the main building are also included. The physical analysis includes things like:
- Records of year of acquisition/construction of all assets, noting present age and life expectancy.
- A complete review to confirm building condition by our engineers and technicians, noting if wear and tear is in line with expected condition.
- Assessment of the remaining life expectancy including adjustments for condition, factoring in any repair and maintenance work.
- Projected year for repair or replacement for each asset, and estimated costs.
It requires a number of legal documents to be provided by the strata corporation, including any official drawings for the property, prior investigation reports, and any existing maintenance and inspection reports.
2. Financial Analysis and Plan
The financial analysis is designed to look at your strata’s projected expenses, examine how much money you have, determine how much money you need, outline possible ways to fund the needed work, and make recommendations.
A proper financial analysis starts with the opening balance of the fund, finishes with the closing balance, and includes cash flow projections for up to 60 years in the future if needed:
- The expected cost of future repairs and replacements for everything in the inventory.
- Explanation of all factors used to calculate these costs. For example, we use published construction price indexes for the area your strata is located in for greater accuracy.
- An assessment as to whether or not the contingency reserve fund (CRF) will meet all future needs, noting the amount of any shortfall or overage. If there is a shortfall, options for loans, operating transfers, borrowing proceeds, or special levies are itemized.
- Confirmation of the recommended contributions for each owner for each fiscal period. We generally recommend a rate designed to reach parity with the increase in the consumer price index as soon as possible.
- Estimated interest earnings, usually based on the average of the opening and closing balances for short-, medium-, and long-term GIC rates.
We provide options for at least three funding models, and a recommendation as to how to best meet your corporation’s needs. Please keep in mind that in BC, strata must have a contingency reserve fund that equals a minimum of 25% of the operating fund for one year (or a plan to make up the difference).
Providing a plan of this scope and detail requires access to strata documents like the operating budget, balance sheet, ledgers, invoices, and any insurance certificates.
Legal documents like service agreements, reciprocal easements, leases, strata bylaws and strata plan are also needed to provide a complete background.
The Power to Determine Your Future
A collection of charts and ledgers aren’t much help if your strata Council has trouble understanding what they mean. That’s the difference with McIntosh Perry: we take the additional step to give you that clarity.
With our experience and expertise behind you, you’ll be able to make fully informed decisions and get the most from your investment in your strata.
To find out more or to ask for a quote, call us at 1-888-348-8991.