How much will an appraisal cost me?
Our appraisal/report fees are determined on a case by case basis. Determining factors (Not all inclusive) include: the scope of the assignment, the availability of relevant data, the size of the project, concurrent commitments/assignments and the required time frame for completion. If you would like to discuss a particular assignment, please Contact Us.
How long does it take to complete an appraisal/Depreciation Report?
We strive to complete every report in a time efficient manner while upholding a high standard of quality and integrity. Completion times vary depending upon the scope of the assignment and our current workload. When we receive an appraisal/report request we will quote what we feel to be a reasonable time frame for completion. As we do place a high value on client relationships, we will do our best to make sure that our timeline works with yours.
Is a Depreciation Report going to make my Strata Fees go up?
Every Phung Horwood Depreciation Report contains recommendations regarding the current and future contributions to the Contingency Reserve Fund (CRF). Through discussion with the Strata Council (and Property Manager if applicable) we make every effort to come up with a plan that is suited uniquely to your Strata. In some cases this can include a recommendation for increased contributions to the CRF. It is important to understand that your overall Strata Fees are dependent on several factors, only one of which is the CRF contribution. Each Strata Council will create their budgets based upon all factors and set Strata Fees accordingly. We do not make recommendations regarding your overall Strata Fees.
My Strata needs an insurance appraisal. What does an inspection entail? What do you need to see?
An onsite insurance appraisal inspection generally requires access to a representative sample of units, common areas of the development, mechanical and electrical rooms and exterior site improvements. Our appraisers will make various field notes, take relevant photographs, review building plans (if available) and make the necessary measurements to accurately describe the property for the purposes of estimating replacement cost.
My Strata needs a Depreciation Report. What information do you need from us? What do you need to see?
The Depreciation Report is a complex document, and as such, we require additional information from the Strata Corporation when compared to insurance appraisals. As the report is financial based, we generally require several years of financial statements, the current and/or historical operating budgets and any available expense records. In the course of completing a Depreciation Report, the more information we have, the better informed we become. Any available building plans, maintenance histories and strata minutes are very useful. Additionally, discussions with longtime Strata members can provide useful information regarding the history of the development.
The site visit(s) will involve a more in-depth visual assessment of all common assets and elements of the subject building and property, numerous photographs and more detailed measurements. If there are any areas of particular interest or concern (i.e. recent or planned repairs/replacements) we will discuss them with Strata representatives. Generally we will require access to a sample of units for the purpose of making a visual inspection of balconies, decks and windows.
Is an insurance appraisal the same thing as a market value appraisal?
No. An insurance appraisal will estimate the cost to re-build an existing building or development in the case of a complete loss. Replacement cost varies dependent on current trends within the construction industry and includes demotion and debris removal allowances and any potential bylaw upgrade costs. A market value appraisal will determine a value that represents the achievable sale price for a property on the open market. This value is based upon the three accepted approaches to property valuation: the Cost Approach, the Income Approach and the Direct Comparison Approach. Please refer to our definitions page.
How accurate is your cost data / estimates? Are they set in stone?
Phung Horwood cost estimates are derived from the following:
- Construction professionals involved with the Subject improvements;
- Numerous local experts and sub-contractors;
- Historical costing information contained within our office files; and
- Industry recognized costing manuals and services.
We make a concerted effort to ensure that our data is reliable and accurate; however there are always certain variables involved. Any replacement or repair costs are subject to change over time and should be reviewed periodically to ensure that they remain relevant.
Will we have access to you after my appraisal/Depreciation Report is finished?
Absolutely. Phung Horwood makes a point of fostering and maintaining strong client relationships. If you have any questions or concerns regarding your report we are available via phone, email or in person to discuss them with you. In the case of a Depreciation Report, all Strata members will have the opportunity to provide some input as part of the process.
Do we really have to contribute for replacement of that component? It looks fine to me.
The purpose of the Depreciation Report is to ensure that the Contingency Reserve Fund is sufficiently funded such that future replacement of common assets and improvements can be readily achieved as needed. Therefore, over the course of a component’s lifespan, funds should be continuously accumulated towards its eventual replacement. The Depreciation Report will recommend that the component be budgeted for replacement at a certain time; however this is subject to change based upon future maintenance and repair practices. Eventually, the component will require replacement, and as long as contributions have been made in the past, the costs should be covered. If no contributions have been made, the replacement will need to be funded by special levy. Also keep in mind that unexpected events do occur no matter how well you have maintained your asset. By planning for a substantially or fully funded reserve, any unexpected expense should be at least partially covered.