Thread: Strata depreciation report

Hi, Guys

Our local goverment just issued Strata depreciation report by law. this report has to be done once every 3 yrs. Right now all kinds of companies wanted for this business. I think our HIs are more suitable for this job, general inspection & review on condos & THs, inexpensive to stratas. But I just noticed our insurer does not cover DR inspection.

Anybody has done this business? Can you share your experience?

Thanks

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I do not agree with your premiss that an HI is qualified to prepare and complete the entirety, or even a portion, of a five+ unit/lot strata, Strata Depreciation Report.

A mere portion of what this is, includes what we refer to as a "reserve study" in the U.S.

HIs in general are neither architects, engineers, appraisers, fund accountants, financial planners, nor certified accountants; nor are they qualified to analyize and determine contract liabilities and obligations real property or otherwise. In general HIs are not qualified to project future costs, job-cost-analysis, evaulate sufficiency of funding, projections, nor analize cash-flow, nor make cash-flow-projection models. Parking garages, highrise super-structures, elevator systems, 30+ year planning evualuation; an HI -- are you kidding?

Keep in mind that you could pretty much FORGET about EVER doing a regular HI on ANYTHING covered within that strata EVER AGAIN, for a buyer or a seller...since you'll be practically FOREVER 'on the hook' for the depreciation report to the entirety of every lot/unit and anything built/updated upon it to any potential, actual, or future seller/ buyer/owner any financier/funder/mortgage holder/investor/etc. and any funder/planner and insurer for indefinite future for as long as they own, have any interest, liability, imdeminity, and beyond even their sale. Every forthcoming report or update is built upon the history reporting - and you'd be conflicted and conflict of interest to have participated on the overall strata reporting & disclosures AND then doing individual HI at same.

Working FOR one of the types above (or a 'teamed' firm) and under their licensure, professional expertise, authority, direction, and completely covered through THEIR PROFESSIONAL INSURANCE, certain site "survey/inspection/current condition" type work, in a limited capacity, for CERTAIN types of properties - might be able to be performed by someone who also works as an HI, i.e. work-papers/work-product for the actual report producer; however an HI would/should not be in the buisness or practice of authoring, nor certifying, ensuring or insuring, of the actual Strata Depreciation Report, or be reporting the "Report" itself.
Liability is HUGE, and would not be suprised your present HI imdeminty doesn't cover such activites - and is FAR OUTSIDE the scope of HI.

"Premiss" is a variation of "premise", and is recognized by Wiktionary, so I suppose it's allowed.
At least I will allow it

That is a fair assessment of the situation, HG. Yes, there is $$ to be made in that field, but there is big $$ to lose as well, with no safety net.

thank you for the attached doc. I will go through it.

DR is required once every 3 yrs.
In this pattern,
1, how accurate will one single report be?
2, Can one single report take that much liability?
3, Will the financial plan really work? I doubt
4, The property quite possibly has nothing to change in 3 yrs. Why do they need a costly report again?
5, If it is so serious, why the inspection is based on visual?
6, Why HIs cannot do the regular Inspection on the unit which is in the DR the HI has done? The DR is on common property & LCP only.
7, Why do the owners need a DR? Actually I found some properties would opt this out.

Originally Posted by Peter Louis

thank you for the attached doc. I will go through it.

DR is required once every 3 yrs.
In this pattern,
1, how accurate will one single report be?
2, Can one single report take that much liability?
3, Will the financial plan really work? I doubt
4, The property quite possibly has nothing to change in 3 yrs. Why do they need a costly report again?
5, If it is so serious, why the inspection is based on visual?
6, Why HIs cannot do the regular Inspection on the unit which is in the DR the HI has done? The DR is on common property & LCP only.
7, Why do the owners need a DR? Actually I found some properties would opt this out.

After you've read the document I attached, you should, at a minimum, have the basic answers to all of the questions you posed. I will not begin to explain the multi-disciplined standards for derriving value, auditing and projecting fund accounting, nor generalized engineering, architectural, nor contract law.

If you have further questions, I suggest you review the entirety of the rules, regulations, and by-laws.

I don't know which language is your "first" one, but I couldn't easily locate a version of the document I shared in french, or any other language. I suspect you can easily source the regulations & by-laws in french, if that's your "first" language, on the appropriate provincial and Council website(s).

I suspect this DR will take a lot of regular condo & TH purchasing inspections from HIs. Also take over the appraisal.

A little help please. I do not understand what this is. Asets ? What reserves some one or some business has ? I followed H.G.s link and still not there.

It is only relevant to multi residences in the province of BC, Canada.
Strata organizations are required by law to set aside $$ for building maintenance and must hire an independent surveyor to determine the life span of the major systems.
So if you are good at estimating the cost of high rise repairs and good at predicting the future, fly at 'er.

The BC goverment said most provinces in Canada & most states in the South had this in practice yrs ago.

So this is basically a glorified Condo Reserve Study?

Originally Posted by Markus Keller

So this is basically a glorified Condo Reserve Study?

Plus Audit, Plus Appraisal, plus Cash Flow projections & Statement of Fund Balances.

Plus the certifier is on the hook indefinately - in front of the strata (condo) for errors, omissions, misrepresentations by others, etc. Mandatory preparation, mandatory disclosure to owners & all potential buyers and funding entities.

Originally Posted by H.G. Watson, Sr.

Plus Audit, Plus Appraisal, plus Cash Flow projections & Statement of Fund Balances.

Plus the certifier is on the hook indefinately - in front of the strata (condo) for errors, omissions, misrepresentations by others, etc. Mandatory preparation, mandatory disclosure to owners & all potential buyers and funding entities.

Indefinately? why is it once every 3 yrs? Plus, if it is so critical, why is this by-law just in place?

You haven't even done the least bit of research to educate yourself on the subject.

Originally Posted by H.G. Watson, Sr.

You haven't even done the least bit of research to educate yourself on the subject.

My Master, no accuse, explain please.

Actually, I started looking into this 2 months ago. I knew some HIs working on this too. I expect HIs can get this business although I might not be good enough to get it.