Depreciation Reports

Coronet Realty Ltd. is a Vancouver property management and real estate company. We are a full service company specializing in residential property management, non-resident taxation and the purchase and sale of residential investment real estate.

A Depreciation Report is a document that provides estimates of the expected life and repair/replacement costs for major items in a strata corporation’s physical structure. These items and components include the structure and the building systems. A Vancouver property manager will be familiar with the concept.

The structure includes the exterior and the interior common property. Items like the roof, the exterior walls, doors, windows, landscaping and parking lots all come under the exterior heading. Included in the interior portion of the structure are common property doors, windows and walls as well as the underground parking. The building systems include plumbing, electrical, fire prevention, heating and ventilation.

The costs that are considered in the Depreciation Report are those that normally do not occur on an annual basis. Generally they are the expenses paidd from the Contigency Reserve Fund or through special levies. They are not regular expenses typically paid out of operating accounts.

A main part of a Depreciation Report s financial forecasting. This section considers anticipated costs over a 30 year timeline. There are various cash flow funding models for the Contingency Reserve Fund that can provide specific balances, contributions, withdrawals and any special levies.

The Depreciation Report can be broken into three time periods. The first is the long term, spanning 30 years. The second forecasting period is for the coming five years. The last period covers the current year, and deals with the annual implementation of the depreciation report. The DP will show up in annual budgets at the AGM as contributions to the contingency reserve fund..

The Depreciation Report is only a forecast. It is an estimate based on best knowledge and industry standards. Items may last longer or shorter than forecast . The actual expenditures amy be greater or less than the forecast amounts.

This approach to budgeting for stratas has been in use in other provinces for a while. It is now a component in BC’s Strata Property Act. It will be a requirement for strata corporations in BC to have a report or have on in progress by 2013 .

The Depreciation Report approach is the best one for strata corporations to take. It removes a lot of crisis management and reduces the number of unexpected special levies. Spreading costs over the lifetime of the building make it easier to budget for them. It can even reduce overall costs.

Coronet Realty Ltd., is a Vancouver area real estate company specializing in residential property management, non-resident taxes and non-resident taxation, rent collection, rental management, and property management. We are located at 3582 East Hastings Street, Vancouver, BC, V5K 2A7. Prior to October 2009 our company name was Coronet Property Management Ltd., so if you’re looking for Coronet Property Management Ltd, you’ve found us). We are specialists in Vancouver property management

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