Russell Cass from Home Check was here this morning to give us a better insight on depreciation reports. Some of the points Russell made were:
A depreciation report is nothing more than a home inspection with a maintenance budget.
A report is good for 3 years.
Reports are often difficult to read. As a Buyer it may be prudent to have a third party analyze and explain the document.
A Strata can vote against having a depreciation report done but they have to revisit that every 18 months.
*STRATA REGULATION REQUIREMENTS OF A DEPRECIATION REPORT
E&O or Statement of NO cover
Relationship with Strata if any
Must state site was visited
Exterior- Roof, Roof Decks, Doors, Windows, Skylights
Systems- Electrical, Heating, Plumbing, Fire Protection, Security Systems
Common Amenities and Facilities
Parking Facilities and Roadways
Utilities, including water and Sewage
landscaping, including Pathways, Sidewalks, Fencing, Irrigation
Interior Finishes including Floor Coverings and Furnishings
Balconies and Patios
Identify Common and Limited Common Property that the Lot owner is Responsible to maintain and not the Strata
Anticipated maintenance/Repair (more than annual)
Replacement Costs (more than annual)
Projected 30 years (use current or previous year financials)
Describe Factors and Assumptions, Interest Rates, Rate of Inflation
Describe Contingency Contributions
Balance in Contingency Fund (minus funds allocated but not removed)
Projected over 30 Years
Beginning with Current or Previous Fiscal Year
Show either or any of a) Fund Balance and Withdrawals b) Special levies c) Borrowings
*As interpretted by Russel Cass of Home Check