The number 1 question I get asked when showing a home (Condo/Townhouse) is...
"Is this owner-occupied"? NOPE
"When is your client looking to move out?" NOPE
"Is that a gas fireplace or electric" (this get asked a lot) but still NOPE
"Is there a depreciation report for this building?" YEP, that's the one.
This question always makes me chuckle a little bit. The Buyers agent or Buyer fires this question off right out of the gate (sometimes I even get it before the showing is set up) and if the answer is "YES" the seas part, harps are played in the background, and the building all of a sudden becomes the gold standard. If the answer is "NO" then, pack up shop, gotta go, no point looking any further, lets leave before this building implodes on us.
Let's back up to a few years ago, the Strata property act made these changes that mandated all strata buildings must have this report done UNLESS it was deferred by a 3/4 vote. Some newer buildings felt that they did not need to spend the $5,000 - $10,000 that it costs to do this report.
What is the report? Well, a company will come in and tell you the windows of your building are 10 years old, and should last 20 more years. Your roof is 10 years old, and should last 15 more years , they then look at your reserve (contingency) fund etc etc etc. It then gives the strata corporations 'recommendations' (notice how I put that word in parenthesis) on how to save for these items that will need replacement. The goal is to have 30 year funding system to eliminate or at least minimize future levies.
The problem is, tons of stratas are getting these reports done, but very very few of them are following the funding recommendations. The reason why? It would raise the monthly strata fees up considerably in most cases. It's a pay now, or pay later scenario. Windows, paint, boilers, roofs, elevators etc, nothing lasts forever.
There has been a recent report that over 90% (yes 90%) of stratas are not adequately funded...even AFTER having a Depreciation Report done.
So the moral of my story is, to all the people that simply ask "is there a depreciation report for the building?" It really doesn't matter if its not enforced. Simply having one done, to satisfy the requirement doesn't mean the strata is any better than a building without one. Talk to your Realtor (hopefully its me) and get the hard facts on the building and what's going on with it.