Experienced in High Quality Capital Plans and Depreciation Reports
Capital Plans and Reserve Fund Studies, also known as Depreciation Reports in BC, detail a property’s common assets and project maintenance, repair and replacement costs over a 30-year timeframe. D.R. Coell & Associates has been producing exceptional quality capital plans and depreciation reports since BC legislated the reports in 2013. We have a dedicated team of certified reserve planners who provide depreciation reports and capital plans to any organization that may benefit from budgeting long term repair and replacement of capital assets; including but not limited to: strata corporations, non-profit societies, BC Housing, private and public assisted living facilities, as well as private clubs.
As Certified Reserve Fund Planners (CRP), our depreciation reports are prepared in accordance with the Real Estate Institute of Canada, which is known as having the most advanced reserve fund planning system in Canada. As Accredited Appraisers of the Canadian Institute (AACI P.App.), our reports exceed the requirements under the Appraisal Institute of Canada’s Canadian Uniform Standards of Professional Practice and will therefore be fully covered under the association’s errors and omissions insurance program. The policy carries a Claim Limit of $2,000,000, an Aggregate Limit of $2,000,000 and a Program Aggregate of $20,000,000. Proof of insurance is provided in the Addenda of each report.
Depreciation Reports Are Required by Law in British Columbia
The Strata Property Act requires strata corporations with five or more strata lots to obtain a depreciation report, no later than 6 months after their second annual general meeting (AGM).
A Reserve Fund Study throughout most jurisdictions in North America, or a Depreciation Report in British Columbia, is a written description of the depreciating assets of a Condominium, or in British Columbia, a Strata, will require major repair or replacement within a projected life cycle, which is typically 30 years. The study details the age, condition, life expectancy and estimated cost of the repair or replacement. The study establishes a long-term budget reflecting:
- what much the financial requirement will be;
- when it is required;
- what level of contribution to the fund will be required to be adequately funded at the time the expenditure is expected.
D.R. Coell & Associates Functional Reserve Fund Study is a step-by-step report that incorporates clear explanations, comprehensive physical and financial analyses and valuable tools to assist clients in understanding and implementing effective reserve fund strategies.
Described in the Strata Property Regulations are specific requirements for Depreciation reports. As experienced Reserve Planners, Strata Corporations can rest assured that a Depreciation Report provided by D.R. Coell & Associates meets and exceeds requirements. Highlights of the report include:
- Reserve Fund Component Description and Analysis which includes an information sheet for each of the Corporations common elements, detailing normal, or economic lifespan, observed condition (effective age), deficiencies, and estimated repair timeline and costs.
- Statement of Reserve Fund Operations examines and compiles the Corporation’s past reserve fund transactions to more accurately forecast future reserve fund expenditures.
- Economic Analysis examines trends in overall construction cost inflation and achievable interest rates for the Corporation’s reserve fund in order to provide realistic projections for repair costs and reserve fund balances.
- Benchmark Analysis estimates optimum reserve fund contributions using a sinking fund method, which is more appropriate than the straight line method commonly used.
- Deficiency Analysis compares actual reserve fund balances to estimated reserve requirements to effectively determine recommended annual contributions by unit owners to the reserve fund.
- 30 Year Reserve Fund Projection presents the proposed reserve fund operations for the next 30 years in one convenient chart.
As required under the Strata Property Act, a new report is required every three years (the anniversary date). This report would be considered an “update” but will require an on-site inspection as well as a complete review of the corporation’s financial statements since the first report. That said, given the inherent knowledge of the development and the management strategy of the corporation a reduction in our fee is highly probable.
Our team is here to help you and your strata property owners in British Columbia understand the process of undertaking a Reserve Fund Study, the benefits of a well-planned out Reserve Fund, and the risks associated with an inadequate Reserve Fund Plan.
Why Do You Need an Depreciation Report?
Depreciation Reports are invaluable financial forecasting tools. A depreciation report provides users with an inventory of common physical property, major components and a clear, concise plan for long and short-term maintenance. The purpose of a depreciation report is to determine what the provision of resources should be for major repairs and replacements of building components and improvements, or common elements, over time to ensure adequate funding of all future capital expenditures when required. D.R. Coell & Associates Reserve Fund Study (Depreciation Report) is a step-by-step report that incorporates clear explanations, comprehensive physical and financial analysis and valuable tools to assist the strata council and its members in understanding and implementing effective reserve fund strategies.
Obtaining a Depreciation Report adds value to your complex. Regular, up-to-date Depreciation Reports provide potential buyers with peace of mind that a condominium unit purchase will not come with a large special assessment in the near future. Current owners can enjoy security knowing that their strata fees are being allocated to regular maintenance, and when to expect an increase in fees or special assessment levy.
There are many other reasons for having a Reserve Fund Study/Depreciation Report prepared. Some of these are:
- to be in compliance with the Strata Property Amendment Act;
- to fulfill the fiduciary duty of Strata Council;
- to provide the owners within the condominium/strata with a plan for the establishment and maintenance of adequate funding for current and future repairs and replacements;
- to equitably distribute the proportionate share of component costs to each owner within the condominium/strata, regardless of their ownership time period;
- if implemented appropriately, the plan should reduce the risk of requirements for future special assessments;
- an implemented plan should prolong the economic life of building components through planned maintenance;
- planned maintenance should reduce long-term repair and replacement costs;
- well maintained building components along with a fiscally responsible contingency plan should help sustain re-sale values
Depreciation Reports In Victoria, Gulf Islands, Vancouver & More
D.R. Coell is based in beautiful Victoria B.C. but thanks to investment in the latest technologies, our Reserve Planners are able to work anytime, from anywhere. This enables our team to provide Depreciation Reports and Reserve Fund Studies not only across Vancouver Island but throughout British Columbia & Alberta. No matter where you need a Depreciation Report or Capital Plan, we will come to you.
Proudly Offering Depreciation Reports in:
- Capital Regional District: Victoria, Saanich, Oak Bay, Esquimalt, View Royal, Langford, Colwood, Central Saanich, Highlands, North Saanich, Sidney, Metchosin, Sooke, Salt Spring Island, Juan de Fuca, Southern Gulf Islands, Port Renfrew, Jordan River
- Cowichan Valley Regional District: Duncan, Ladysmith, Lake Cowichan, North Cowichan
- Nanaimo Regional District: Nanaimo, Parksville, Qualicum Beach, Lantzville
- Comox Valley Regional District: Comox, Courtenay, Cumberland
- Mount Waddington Regional District: Alert Bay, Port Alice, Port Hardy, Port McNeil
- Strathcona Regional District: Campbell River, Gold River, Sayward, Tahis, Zeballos
- Alberni-Clayoquot Regional District: Port Alberni, Bamfield, Sproat Lake, Great Central Lake, Tofino, Ucluelet
- Greater Vancouver
- Prince Rupert
- Prince George
Frequently asked questions
- Who is Qualified to Prepare a Depreciation Report?
The Strata Property Act requires depreciation reports to be conducted by a “qualified person”. This leaves the required qualifications up for interpretation. What is most important is that the writer has a strong understanding of the corporation’s bylaws, agreements with owners pertaining to the repair and maintenance of common property, limited common property and strata lots.
Depreciation reports prepared by D.R. Coell & Associates will exceed requirements under the Strata Property Act, as well as be prepared in accordance with guidelines set out under the Real Estate Institute of Canada which is known for having the most advanced reserve fund planning (depreciation report) system in Canada. Engaging D.R. Coell & Associates to prepare your report will guarantee your report has been prepared by a qualified professional.
- Who is Exempt From Needing a Depreciation Report?
British Columbia’s Strata Property Act requires that all Stratas with more than 5 strata lots obtain a depreciation report every three years. Stratas may waive the requirement or defer the report by passing an annual ¾ vote. While Stratas and other organizations
may be exempt from needing a Depreciation Report, or waive the requirement, it is worthwhile to have them done. Depreciation Reports are a comprehensive financial document that adds tangible value to Strata Corporations as well as various other organizations.
- How Much Does a Depreciation Report Cost?
The fee for service is based on the size of your complex, the type of construction, the number of common elements, along with other nuances of different developments and/or Stratas. Our team is happy to prepare a no-obligation, customized quote to meet
your specific requirements. As mandated under the Strata Property Act, a new report is required every three years. This report would be considered an “update” and is typically available at a reduced fee.
- How Often Should a Depreciation Report Be Conducted?
Depreciation Reports are required for Stratas with more than 5 lots, every three years. While Stratas may choose to waive the requirement, it is worthwhile to have Depreciation Reports
completed regularly. As a Depreciation Report is a detailed financial tool, obtaining regular, timely reports adds overall value to your complex.