What is a Depreciation Report and how does it effect a Buyer? As of December 13, 2011, Strata Corporations will be required to prepare and maintain a “Depreciation Report,” which estimates the life expectancy of major items and the ultimate cost of their repair or replacement. A Strata Corporation whose strata plan contains less than 5 strata lots is exempted from this requirement.
Strata Corporations will be required to obtain this mandatory depreciation report before December 13, 2013 and then after that, these reports must be updated every 3 years, unless exempted. The report must project the anticipated costs of maintenance, repair and replacement of major building components over the next 30 years. The report must also include a financial forecast that offers at least 3 cash flow funding models for the Contingency Reserve Fund. GOOD NEWS for Buyers!! Make sure you ask for a copy of this important report when purchasing a stratified home.