Reserve Fund Studies / Depreciation Reports
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
Related Links
Condominium Property Act - Alberta
Condominium Property Regulation - Alberta
Strata Property Act - British Columbia
https://www.bclaws.gov.bc.ca/civix/document/id/complete/statreg/98043_00
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.