Time is running short for British Columbia strata corporations aiming to hit the Dec. 13 target to have government-mandated depreciation reports in place.
Depending on who the stratas pick to prepare the report, they may be facing a wait of up to several months, which could take them into next year, and past the deadline.
B.C. regulations were changed in 2011 to require depreciation reports every three years to help stratas plan long-term for repairs and maintenance of common properties and assets.
It isn’t known how many strata corporations have decided to go ahead with the reports, which can cost anywhere from a few thousand dollars to $10,000-plus, depending on the property.
Another factor in cost is who is hired to prepare the report. Legislation does not cite specific credentials.
Sandy Wagner, president of the Vancouver Island Strata Owners Association with 8,600 members, estimates the bulk of Island stratas are getting the reports done.
The reports will help maintain property values, she said. Also, financing agencies are increasingly asking for them.
Wagner recommends strata corporations budget anywhere from $5,000 to $12,000.
It can take months for a report to be completed. At her own strata, the consultant picked after a request for proposals was hired earlier this year, and the report is expected in November.
There is no provincial penalty if a report is not completed on time, she said.
The association has heard of a few cases where reports have come in with factual errors, Wagner said.
As for who is doing the reports, “that, right now, is the challenging part,” Wagner said.
The Condominium Home Owners Association of B.C. lists several professions whose practitioners may have the skills to do a report, including professional engineers, architects, members of the Real Estate Institute of Canada designated as a reserve planner, appraisers and others.
Victoria’s Unity Services Corp. president John Grubb said demand has been strong for reports. “All the service providers are pretty much up to their eyeballs with depreciation reports,” he said Thursday.
Grubb, who has worked in home renovation and building maintenance for years, said he’s been busy preparing reports. Right now, clients are booking into spring 2014 for reports.
He predicts that demand will grow even more as time passes.
Christopher Wright, Victoria branch manager at Chatwin Engineering, said governments and universities have relied on engineers for decades to look at their portfolios, adding that they have been doing depreciation reports, or reserve fund studies, for a long time.
It can take about four months to complete a report, he said. Numbers are confidential, but Chatwin has completed and is working on such reports. Stratas must supply and sometimes spend a few weeks chasing down documents on their buildings for the consultant.
In many cases, service providers to the buildings, such as emergency generator maintenance and elevator companies, are interviewed. Again, it may take a month for those firms to provide information. If needed, other specialists may be hired, especially with older buildings, which can contain hazardous materials.
Ken Hollett, managing director at Cushman & Wakefield valuation and advisory service in Vancouver, said he was expecting a big rush at the last minute, “but I haven’t seen it so far.”
He thinks that many stratas have decided not to get a report done and are waiting for now. Hollett, an appraiser, has completed about a dozen of the reports. He may call in an engineer if necessary.
