The Depreciation Report takes a look at the physical components of the Common Property*and determines the condition of where they are at on their life cycle, how long the life cycle typically is for the building component, and how much it will cost the Strata Corporation when the component needs replacing, and adjusts for inflation. The Depreciation Report then lays out 3 models of financial planning for the Contingency Reserve Fund. The Deprecation Report serves as a very helpful long term plan to ensure the Strata Corporation knows how much the real cost of capital replacements are going to be, and helps the Strata Corporations to save adequately (and if not save adequately, then at least let the Owners know what Special Levies may be coming in the future).
A RAR provides a real time look at the condition of the building, the on-going maintenance or maintenance that is currently required to ensure the building components are working as they should and will not cause a substantial risk to the complex, the operations of the building, and any in suite fixtures where an upgrade is recommended. It also addresses any concerns that may happen as found in the inspection of the current conditions of the components of the building.
Depreciation Report: Sprinkler System is in average condition. Building is 15 years old, Sprinkler System should last for 40 years. Cost to replace system $500,000 in 25 years adjusted with inflation. * please note this is only an example and is not reflective of each building.
Risk Assessment Report: Sprinkler system has been reported to have had regular maintenance, and operation policy is to replace any sprinkler heads that show a leak immediately by the fire safety company contracted to the building. Regular inspections are confirmed, reports have been reviewed for the last 3 years as provided and pressure is satisfactory. RECOMMENDATION: HIGH PRIORITY: Install sprinkler cages over each head including in-suite sprinkler heads. This is a major risk for the Strata Corporation as one knocked head could cause hundreds of thousands of damages if not more. Please see cost chart estimates attached to report for budgetary figures of replacing all 124 sprinkler heads.