Quote:
Originally Posted by Gridlock
Strata Fees:
So in regards to the lame realtor yesterday^^, he did tell me about one thing regarding strata fees.
Apparently, the laws regarding their funding have changed that complexes need to have a depreciation report on all common property(siding, roofing, pipes, mechanicals) and have a funding plan for their replacement.
Basically, that backtracks to: we know we need to replace the roof in 10 years, we know its going to cost this much, so what does our strata fee need to be now in order to fund the maintenance of the building/complex.
So you are going to see a change in how buildings determine what their fee is going to be and how its charged.
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Strata councils/buildings can opt out of the depreciation report but it must be passed annually. Personally, I see this more as a cash grab than something done to give buyers 'peace of mind'. Our building has chosen to opt out of this and will continue to do so in the near future. We have had all our windows replaced as part of a huge building envelop project with rainscreen, fire system overhaul, roof refurbished, both of our water tanks replaced, so a lot of the major work that needs to be done has been done.
An example: the depreciation report for our building was to cost $4000. When we hired an engineering firm to do our building envelope assessment, it was about $4500, and that covered only the exterior surfaces of the building. How comprehensive of a depreciation report on the whole building do you think any strata corp would get based on these costs? It will be a "this is that old, needs to be replaced at X dollars. That is this old, replace at Y dollars. Your building is this age, these are the things that should be replaced". It CAN help a building plan for upcoming costs, but in order to do this, strata fees will likely have to go up in anticipation of these things.
Prospective buyers buying into a building with a depreciation report done may have more peace of mind, but this report and associated costs may or may not be accurate. It can also significantly hit a building's value if the depreciation report lists a bunch of expensive things that will need to be accounted for in the future, which can definitely scare buyers away.