Registered Reserve Fund Analyst, Lloyd Kenzle explains how BC's Strata Act will work and what you can expect from it...
BC's Strata Law Act has been introduced gracefully and here is what you can expect and how it will actually impact the marketplace.
Here are some of the top reasons and the design behind the way these politicians and professional advisors have managed to create a system of regulation that will ultimately regulate itself through market trends.
Here is a look at the way the effects of the Strata Act are shaping up.
It is important to remember, there is not really any government body currently monitoring the situation directly. Strata councils and strata corporations have been left to make their own decisions about how and when they will approach a change over to depreciation reports.
The instigation of depreciation reports and contingency reserve study and analysis is the first step to building a foundation for secure financial planning for strata complex managers, strata councils, strata corporations.
All too many times in the past, strata complexes have fallen apart, created financial holes that cannot be repaired, and leaving many strata lot (individual strata property owner) in dire straights as the operations of the strata council and the strata corporation have collapsed around them. Monies are not often not recovered. Canada rates high on the international stage for this kind of occurrence compared with other similar countries.
Curbing the trend of strata complex and condo management (including financial) collapse and the massive effect on the economy as a result.
The financial collapse of a condo complex has huge ramifications on the greater economy as a whole. Let’s think about a complex with 300 families living in a managed complex only to find all their payments have gone and the company managing the complex has gone underground.
Months and years can go by before a complex can regain its feet. When condo is in trouble, big investors just love to let it squander for as long as possible so they can snap them up at rock bottom prices.
Three hundred families affected by such turmoil can soon turn into much more. The implications are real, do happen and often affect a micro economy depending on the condo first -- and then spread.
Encourage the better management and therefore future financial success of strata complexes condos and the lives of those individuals owners.
This is extremely important because if a strata council or strata corporation cannot pay for necessary upkeep problems that grow also impact all owners directly and often severely. Imagine trying to sell your condo when the walls at the entrance and the gates are not working properly.
Maintain growth in property markets knowing the foundation of the property market is in good shape -- and I do mean that literally.
While the Strata Law laying out the guidelines for for strata councils and strata corporation depreciation reports and strata complex contingency reserve fund study and reporting, the indirect result is a stabalisation of individual property lot values, the strengthening of those values over time, other advantages will be made for strata management and those benefits should be used wisely.
Better management leads to reduced costs. Ultimately saving on the cost it takes for the strata council or strata corporation to manage maintenance as a result of accurate depreciation reports. Extra savings can be reintroduced into the property for extra facilities and also be shared among the individual strata lot owners.
While deprecation reports are also call condo contingency reserve fund studies, or condo contingency reserve fund analysis and reports, and even reserve fund analysis projections, they can also be simply thought of as maintenance cost and renewal cost projections -- I guess it sounds better when something is called a depreciation report because it implies financial gain.
The best way to understand them is to think of them as reports created by professionals with the legal accreditation the work with condos and strata properties and produce their predictive costing so those financials can be used for accounting, liabilities, financing and other important planning.
In layman’s terms, depreciation reports can be called maintenance and repair cost projections. And to be honest, I’m pretty sure that explanation has cleared the air of mystique surrounding depreciation reports for many individuals and potential condo buyers. Just another thing we do different at C4U Inspections, we simply and communicate with our clients without industry jargon.
Need more information and have questions? Contact C4U Inspections today
Lloyd doesn't break the rules for anyone and as a leading chief home inspector in BC, that means he follows industry requirements, government regulations and licensing codes of conduct to the letter. Unbiased, ethical and professional home inspection and building consultation services.