FAQ

 

Insurance Appraisal FAQs

What is the scope of an Insurance Appraisal?

The main purpose of an Insurance Appraisal is to ensure that the entire property; materials, labour, professional fees, overhead, contractor’s profit, taxes and insurance, is insured to a supportable dollar amount. In general terms this comprises:

  • The structures including foundations, frame, exterior & interior walls, roof structure, roofing, interior finishes, HVAC, electrical, lighting, fire protection equipment, and elevators.
  • The site improvements such as: pavement, curbs, trees, grass, and fencing
  • An allowance for demolition and removal costs
  • An allowance to bring the original structure up to current British Columbia and Municipal Codes for fire protection, parking, and handicapped access

Why should Insurance Appraisals be done?

  • For Stratas, according to the Strata Property Act a strata corporation must obtain and maintain full replacement cost insurance on the building, the common facilities and any insurable improvements, and also review annually the adequacy of the insurance. Get more details on the Strata Property Act.
  • Many buildings are not up to current codes for sprinkler systems, parking spaces, and handicapped access. The additional cost that would be required to bring these properties up to code is often significant.
  • Having a recent Insurance Appraisal can at times allow for more flexible terms with your insurance broker.

How often should a full appraisal be done?

Every year.

That is why we create multi-year programs with free updates for our clients so that they have a recent appraisal available to them at all times. Having your property appraised frequently will ensure that the latest changes to construction costs, building codes, and bylaws are incorporated into the appraisal.

What will the appraiser need?

The appraiser will need to meet someone on site, who can provide access to a typical suite (residential), common areas, parking garages, and mechanical rooms.

The appraiser will need to borrow blueprints or obtain Strata Plans so that accurate floor area measurements can be obtained.

Why does the appraiser need to view a suite?

It is important for an appraiser to view a suite with “typical” finish in order to document important construction components. The quality and type of floor finishes, ceiling finishes, countertops, cabinets, appliances, baseboards, crown moldings, lighting fixtures, vaulted ceilings, and plumbing fixtures will be noted and used in the determination of an appropriate replacement cost. 

Will personal belongings such as beds, tables, chairs, and dishes be included in the appraisal?

No. Insurance Appraisals typically cover the buildings only.

Common equipment such as swimming pools, jacuzzis, security systems, and handicapped lifts should be included in your appraisal. Other equipment such as exercise machines, televisions, and billiards tables may be included, but this will depend upon the arrangements made with your appraiser. 

Will suite improvements, such as flooring or cabinets, be included?

If they were installed and paid for by the building owner, yes.

In a situation where the building is older and most of the suites have undergone some replacement or modification, it is the appraiser’s responsibility to determine a reasonable estimate of the overall type and quality of finish. Any information provided by the owner or managers that will help clarify this to the appraiser is important.

Depreciation Report + Reserve Fund Studies FAQs

What is a Depreciation Report?

A Depreciation Report/Reserve Fund Study is a legislated report required in BC and most of Canada.  The report’s purpose is to provide a 30-year financial plan to fund future major repairs and replacements of common assets of a strata or condo corporation. It also provides a detailed look into the condition and lifespan of a property’s main components. This report increases the understanding and predictability, or reduces surprises, of future costs for current and prospective condo owners.  The common assets included in a Depreciation Report or Reserve Fund Study are structural components, exterior cladding, roofing, balconies, elevators, plumbing, site services and landscaping.  These assets have a finite lifespan and require repairs or replacements over the long-term to keep these common assets in good condition.

What types of properties do Depreciation Reports cover?

Strata Developments, Bare Land Stratas, Apartment & Townhome Buildings, Commercial, Office, Retail, Industrial, etc. 

Should my building have a Depreciation Report?

Yes. In the case of a strata property, a depreciation report is mandatory according to the Strata Property Act (BC) and Regulations. For all other buildings, an up-to-date depreciation report ensures an accurate assessment of your property’s current physical condition and provides guidance in planning for future maintenance and repair.

What items are included in a Depreciation Report?

Typically, there are seven components covered in the report, including the structure, enclosure, electrical, mechanical, fire safety, interior finishes & amenities, and site work. This list may vary according to the characteristics of each property. 

What are the benefits of a Depreciation Report?

A depreciation report provides strata owners with a detailed look into the current condition of all the components of their property’s common areas and helps plan for the future. In addition to the insight into the components’ current conditions and future needs these reports are also expected to become vital in all future real estate transactions. Prospective buyers are going to start asking for depreciation reports as a standard part of the purchasing process and any property which does not have one may experience more difficulty in enticing prospective buyers.

Why should I use Normac for my Depreciation Report?

Normac uses only highly-trained and qualified professionals in the preparation of all depreciation reports to ensure accuracy and provide assurance of quality for clients.

What information will the strata have to provide?

This can vary depending on the types of components found within a property. Typically the items required include, but are not limited to, the property’s plans (strata, architectural, mechanical, etc.), financial records, maintenance manuals and logs, any leases and/or licenses, and any other legal forms affiliated with the property. For a more extensive list of what information your property might require please see the following link: CHOA – “What to Know About Depreciation Reports” 

How often should a Depreciation Report be completed?

 According to the Strata Property Act (BC) a depreciation report must be completed every three (3) years. 

How much does a Depreciation Report cost?

 Pricing will vary based on the property’s location as well as its size and the extent of its components. Please contact us for a free quote for your property today.