Looking to Buy in a High-Rise? Ask for a Depreciation Report.

    While British Columbia was late to the table with respect to passing legislation mandating Depreciation Reports (Reserve Fund Studies) in the Strata Property Act,  we do have the benefit of learning from our provincial predecessors who have gone through the growing pains that we are currently experiencing.

    If you are interested in purchasing in a high-rise, be sure to ask for a Depreciation Report and review it thoroughly.  It is imperative that the strata council reserves for window replacements to ensure that the Contingency Reserve Fund has ample resources to cover these costs.  When compiling Depreciation Reports, Certified Reserve Planners (CRPs) perform extensive site inspections and examine all common assets of a strata corporation, including windows.     When the building components have been inspected, the CRP determines where the asset is, (in the case of the article below – the windows,)  in terms of its life cycle and when the strata should anticipate its replacement.  After reserving for the anticipated costs of replacement, this asset is included in all three of the necessary funding models presented to the Strata Council and included in the report.

    All buildings, whether new or old, should have a Contingency Reserve Fund to cover or plan for the inevitable cost of asset replacement.   Whether your strata conducts a Depreciation Report for planning purposes in order to avoid a large special assessment, or you have a Depreciation Report produced in order to maintain the market value of your residence, the bottom line is that you must have one.

     

    Degrading condo windows expected to trigger major wave of replacements
    University of Waterloo professor John Straube says buyers of glass condos should consider cost lifespan of window walls and cost to replace.

    Content By Patty Winsa.  Published on Wednesday, February  19, 2014.  To read the article as it originally appeared in The Star, click here.

    That million-dollar condo view comes with a hidden price tag as degrading windows in older buildings are expected to trigger a major wave of replacements which could cost owners upwards of $100,000, a university professor says.

    “Window walls have already been around in their current form for 20 to 30 years and we expect that they will have a 30- to 35-year lifespan,” says University of Waterloo professor John Straube, who divides his time between the civil engineering and architecture departments.

    “Over the entire face of a large condo, they could cost $100,000 (a unit)” to replace, said Straube, noting the figure is a projection because “we don’t actually have that much experience.

    “What we do know is that’s what it has cost to replace glass in limited buildings to date.”

    The adhesive, gaskets and sealants used to install window walls eventually degrade due to temperature changes and exposure to the sun, allowing moisture and water to get in. The glass wall’s aluminum frame becomes pitted and disfigured over time due to corrosion.

    The cost of replacing the glass walls could be “five to 10 times” what it cost to replace windows in a home because the windows have to be stronger and they are harder to reach, Straube said.

    As well, the glass walls result in higher energy costs.

    “Technology may offer slick solutions and reduce this cost,” said Straube.

    “We just have little experience.”

    Owners often don’t anticipate all the repairs associated with condo maintenance and consumers must be more informed, he said.

    “This is not the same as buying a house. These will require a much larger proportion of our dollars to operate and maintain,” said Straube, who has consulted with Toronto apartment owners on how to repair and retrofit their aging buildings.

    Straube said the province should change the building code to include more consumer protection as well as standards for building safety.

    Since the ‘70s and ’80s, the building industry has had experience with curtain walls, a more expensive glass wall used in commercial buildings and high-end condos. The walls sit in front of the concrete slab — hence the term curtain — and are clipped on with pieces of aluminum. Less contact with the concrete means better insulation.

    On the other hand, window walls sit on the concrete slab and are less durable. “They’re cheaper, the aluminum frame is thinner and they have more joints that are finished with less durable sealants,” said Straube, adding they were invented to improve affordability in the residential market.

    Other experts, though, say it’s hard to predict a doomsday scenario where condo owners are soon paying thousands to repair the window walls.

    “Because we’re relatively new to this amazing condo market, we’re not sure about the life of these buildings,” saidGraeme Stewart of Toronto firm E.R.A. Architects.

    But he noted condo owners should probably be saving more for long-term maintenance.

    “There’s an expectation from the buyer’s side that (the units) are going to potentially last forever (but) there is an ambiguity about how long they’re going to last.”

    People must realize condo buildings have regular maintenance cycles, like homes, said Stewart.

    The architect is looking at innovative ways to retrofit and reclad Toronto’s aging apartment buildings, which were predominantly built in the ’50s and ’60s.

    Stewart said it’s much more cost-effective to repair the concrete structures, which can stand for centuries, rather than raze and replace them.

    Useful Links:
    Strata Property Act
    Certified Reserve Planner 

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