Common and Expensive Repairs That Can Blindside Strata Owners Part I
Depreciation reports are absolutely vital because they make building owners aware of upcoming repairs. A well-crafted depreciation report also helps owners avoid paying hefty special assessments, gradually saving up an ample reserve fund instead.
A Horrific Scenario
Without a regular building assessment, your strata corporation could be completely oblivious to a major problem. One co-op part owner in the West Village area of New York was flabbergasted to see bricks sliding out of her facade and smashing into the sidewalk below.
After an emergency evaluation, expert building repair and engineer teams discovered that entire portions of the brick facade were bulging. Local authorities were called in to help keep the area clear and aid in the erection of a safety scaffold.
Because the building did not have a reserve fund to speak of, a special assessment fee was levied against the building’s unit owners. Based on the percentage that the one owner had, her bill tallied up to a whopping $35,000.
These types of expenses that come out of nowhere can place a hefty financial burden on building residents. The collective experience can also cause the building’s reputation to crumble much like the brick facade, making vacancy and unpaid fees more likely.
Anticipating Common Problems
Facades are one of the major issues an older condominium building can face, especially if it is six storeys high or taller. Over the years, the materials take a beating from repeated wind, rain and freezes. Small leaks start to form that undermine the structural integrity of the entire face. Eventually, things start to fall down.
A facade repair can range from $30,000 for a typical repainting job to a million or more for a complete replacement. Worse yet, large elements of the roof eaves may need to be replaced during the process. One project can snowball into a larger one that ends up making almost everyone in the building strapped for cash.
A regular depreciation report can help avoid this problem. You will have an estimate of when structures may begin failing, and your strata corporation can begin saving up well in advance. Rather than hitting residents all at once with crippling assessment fees, you can determine a reasonable portion for each unit owner to contribute. These small fees can add up into quite a buffer, preparing for worst-case scenarios both expected and unexpected.
Additionally, a depreciation report will identify the smaller problems that can contribute to bigger ones. Rather than waiting for an entire component to fail, you can patch up the minor problems as they occur. This diligence prolongs the life of older building elements and helps residents get more mileage out of every structural system.
Part II of this article will discuss common problems that strata buildings can face in addition to facades. To learn more about our depreciation reports services now, take a look at our dedicated page.