The purpose of this Reserve Fund Study or Depreciation Report is to provide cost estimates of various reserve components, subject to major repairs and/or replacement over their expected lifespan, and to estimate the funding required for such major repairs and replacement in accordance with the provisions of the Condominium Property Act specific to each Province.

At Westview we take a functional approach to reserve fund studies. Our report is a financial document, based on a physical and financial analysis of a condominium corporation.

A functional reserve fund study or Depreciation Report consists of two parts:

1.     A physical analysis of the property; and

2.     A financial analysis of the reserve fund operations.

The physical analysis of a Functional Reserve Fund Study culminates in the Westview Consulting Ltd benchmark analysis on a single spreadsheet, comprising the following elements:

  • Building components organized in a uniformat system

  • Reserve component expenditures

  • Quality assessment of reserve components

  • Unit cost of reserve components

  • Actual reserve component expenditures over a relevant time period

  • Life cycle analysis of reserve fund components

  • Current replacement cost estimates of reserve components

  • Future replacement cost estimates of reserve components

  • Current reserve fund requirements

  • Future reserve fund accumulations at compounded interest

  • Future reserve fund requirements (unfunded reserve components)

  • Reserve fund contributions calculated by the sinking fund method

  • Rations of reserve fund allocations

The financial analysis consists of a review of the audited financial statements and a review of the historical expenditures for major repair and capital replacements.

Part of the financial analysis that we can complete is a reserve fund deficiency analysis, which measures the reserve fund shortfall by comparing the actual reserve fund balance to the estimated current reserve fund requirements, or the reserve fund balance, which the corporation should have, if it were fully funded.

Lastly, recommendations are provided as to reserve fund contributions as a 30 year reserve fund projection is completed, showing the opening balances, reserve contributions, interest income, reserve expenditures and closing balances.

 

Experience with many different building types:

  • Townhouse

  • Apartment

  • Mixed commercial/residential condominiums

  • High Rise

  • Hotels/Resorts

  • Recreation Facilities

  • Exercise Facilities

  • Airport Facilities

  • Non-profit housing

  • Schools

 

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Capital Planning

Before a building owner or property manager can estimate future major repair or replacement costs, they need to determine the current condition of the building or facility. A Capital Expenditure Plan is a long-term review of the building or facility and provides a schedule for major replacements, along with cost estimates. Our team specializes in property and building reviews and have performed them on a wide-range of different buildings and facilities.

 
 
 

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