Depreciation Report Received! - But is it of value?

I have written about this before, but I am repeatedly reminded and angered that there is still so much going wrong with this process.

As most Strata are aware, as of Dec 13, 2013, all Strata should have had a Depreciation Report (also called 30yr Capital Planning Report) prepared.  They will need 75% of the owners to agree on an annual basis if they choose to not have this report prepared, but Strata that are going this route are finding it much more difficult to sell units in the complex because the buying public is demanding this information.

I was recently at a BCBEC seminar where Tony Gioventu of http://www.choa.bc.ca spoke on the subject.   Tony estimated that as many as 60% of Strata have not yet completed these reports AND have not officially opted out of the requirement to do so.  Many are just ignoring the requirement putting the Strata in violation of the law and opening up the Strata council to possible legal recriminations.

But of those that are proceeding and having this report generated, many are finding that not all reports are equal and many do not have the information needed to make informed decisions.  Many reports do not meet the requirements set out in the act.

One particular are of concern that Tony elaborated on was the complicated nature of air parcels and how they divvy up the responsibility and cost of maintaining and repairing the Strata's assets.  Many times, these agreements are complex enough to require legal interpretation of who the various parties are and what will be their responsibilities.

Tony also went on to say that he hoped the market will flush out those providing sub-standard reports and that is what my primary concern is.  As a home inspector, I have now read a dozen or so of these reports.  Some have been prepared by world class building envelope firms and some have been prepared by second rate engineering houses or even worse BY A FELLOW HOME INSPECTORS.

As a very well trained home inspector, I know more than many in my industry when it comes to building envelope construction and maintenance.  I would still never dream of going into the field of providing these depreciation reports to Strata and feel it is also totally inappropriate that any fellow home inspector would provide these services as well. 

A conversation at my table reinforced this conviction in spades.  I was at the table with several old timers from the now defunct BCIPI organization I used to belong to.  But there was also a relatively new ASTTBC certified inspector at the table who had the newly created ASTTBC RRFA (L) certification as well.  He was certified and encourage by ASTTBC to provide depreciation reports on unsuspecting Strata. 

At one point, this individual (who is on a Strata Council) started to slander one of the world class engineering firms I recommend to all my multi-family clients. His Strata had hired this company and received a report from them.  He was claiming that the report was missing assets (doors on an upper deck level) and also had lifespans for wall assemblies that he felt were in error stating that the report had a longer life span for a face sealed stucco assembly compared to a rains-screened stucco assembly.

I was sufficiently shocked and upset by his claims, that I investigated them with the company he was slandering.  It took only minutes to get a response on the specifics of the 'dispute' even though I had not provided the name of the inspector, addresses, or even the city of the Strata (because I did not know any of this information at the time).  Turns out that the doors, because they were in a protected environment, were in a different section of the report that had a different renew schedule compared to more exposed assets, and the stucco wall 'discrepancy' was because some of the complex had been recently remediated and other parts had not.  Obviously recently remediated walls (whether rain-screened or not) would have a longer life span than assemblies that were much older and at the end of their useful life.

But here is an individual Certified by ASTTBC as a RRFA (L) who does not even know how to read a professionally created report, what do you think are the chances that he can write one?  A look at the RRFA (L) requirements on the ASTTBC website sheds some light on the real issue - lack of training.  After completing just one 72 hour course, the ASTTBC home inspectors are authorized to prepare these reports on all Strata up to 2 stories.  This could even include Strata with hundreds of townhouses.  The large engineering companies typically use BCIT trained Building Envelope Technologists to prepare these reports.  The technologists have multiple years of full time schooling and even then, they are under the supervision of more experienced engineers as they prepare these reports.

Who do you think prepares the better reports?  Who should you insists on hiring for your next reporting needs? 

Those interested can contact me through my website, and I will provide a list of the top firms for your report needs.

Further information on depreciation reports may be found on these links provided on the http://www.choa.bc.ca website.

Depreciation Reports

The B.C. provincial government has introduced new regulations making depreciation reports mandatory for strata corporations in B.C. Strata corporations of less than 5 units will be exempt from the requirements, plus a strata corporation may consider exempting itself by passing a 3/4 vote resolution. Changes to the Form B, Information Certificate were also introduced.

• "What to know about Depreciation Reports" – a CHOA information guide
• A copy of the CHOA News Release may be found here
• A copy of the regulations may be found here
• A copy of Tony Gioventu's Condo Smarts column re: Depreciation Reports and Form B changes may be found here
• Additional information is available at the B.C. Government's Strata Property website
• A copy of the Strata Property Act Form B (as of March 1, 2012) may be found here (PDF) or here (Word doc).
• A copy of a Depreciation Report Request For Proposal may be found here (PDF) or here (Word doc).
• A copy of the OIC pertaining to 1) how long a strata corporation must maintain depreciation report records, and 2) when a strata corporation that was formed after December 14, 2011 must obtain a depreciation report is available here (PDF).
• Letter to Minister Coleman: Depreciation Reports and Reserve Fund Studies, July 5, 2010 (PDF)

Civil Resolution Tribunal Act

On May 7th the provincial government introduced legislation, Bill 44 the Civil Resolution Tribunal Act, for justice reform that included a new alternative dispute resolution option for strata corporations in British Columbia. This is the first step in creating a low-cost, efficient, effective, alternative dispute resolution tribunal for BC's strata corporations. Bill 44 passed third reading on May 30, 2012.

• A copy of the CHOA Press Release can be found here (PDF).
• The Government of British Columbia News Release may be found here.
• Information on the Ministry of Justice website may be found here.
• Information on the Housing Policy Branch website may be found here.
• Bill 44, the Civil Resolution Tribunal Act may be found here.
• A copy of Tony Gioventu's Condo Smarts column "Civil Resolution Tribunal Act" may be found here

Increase Public Safety and stop the recognition of inadequate trained 'electricians'. Sign the petition today!

Recently the BC Safety Authority announced that they were undermining the Canadian Electrical Apprenticeship and Electrical Red Seal Endorsement system by allowing inadequately trained ASTTBC individuals to conduct limited regulated work.

This is a gross violation of Public Trust and is likely to lead to increased dangers to the public AND the ASTTBC individuals participating in this practice.The actions of ASTTBC have never been about 'Public Protection' and in fact are nothing more than Empire Building.

Review the official response from the Electrical Inspectors Association of BC www.senwi.ca/Misc/EIALettertoPremier.pdf and then sign the permit.

Sign the Petition Today: http://www.protectredsealtrades.ca/actions.asp

For more information about the Red Seal program visit http://www.protectredsealtrades.ca/

New players in the electrical business, but is the public safe?

ASTTBC now has approval to provide 'semi-skilled' labour to perform limited fields of work, like testing, servicing and repairing of electrical, electronic and biomedical equipment.

Per this Tyee article,  this move has the electrical professionals fearful of public safety and welfare.

ASTTBC continues to move into industries that are already well served by others certification.  This leads to competing certifications and confusion in the industries and needless bureaucracy to manage duel systems.

It became clear to this inspector well over a year ago, that ASTTBC does not appear to have ever been about public safety, and instead appears to be about building an empire.

But at who's expense and risk?

BC Safety Authority warns of CO dangers caused by Air Conditioning

Air Conditioners, like exhaust fans and range hoods, can depressurize a home and suck exhaust gases out of chimneys.  This can introduce CO into the home - a silent killer.

See the recommendations from BC Safety Authority

Cooking with gas? You may have air quality that would be ilegal if found outside!

Energy Department’s Lawrence Berkeley National Laboratory finds that "interior air quality in homes that cook with a gas stove can reach pollutant levels that would be illegal if found outdoors."

Full Article

Contaminates include nitrogen dioxide, formaldehyde, and carbon monoxide.


My inspection reports always stress that in all homes with gas cook-top or ovens, the occupant needs to run the range hood during the entire cooking period and for at least 1 minutes after the burners have shut down.  However, the above mentioned article also touches on range hood effectiveness:

"Previous studies have found that range hoods vary widely in their effectiveness at removing pollutants. In a laboratory study of seven models ranging from $40 to $650, Singer found capture efficiencies ranging from 15 to 98 percent, and also found that a higher price did not guarantee better performance."

So it is important that the range hood stays on long enough after the cooking period to adequately remove the contaminants.  A better option is to have never installed the gas appliance in the first place.

SENWI is committed to the environment and converts its vehicle to burn WVO

In a move to significantly reduce our carbon impact, we have converted our inspection vehicle to burn Waste Vegetable Oil.  For more details please visit our story of  1250 Kms on a single 50 litre tank of Diesel!

Home Inspector Association issues another Propaganda Rant

One of the home inspection associations in BC have issued yet another propaganda rant that is far from accurate, in an effort to boost their reputation in the BC marketplace.

The facts are that all 4 inspection organizations approved by BC Consumer Protection have basically identical entrance requirements and ongoing education requirements.  All of the organizations require formal education followed by field training and then field assessments.  On paper there is very little difference between the organizations.  As an inspector who moved from ASTTBC to CanNACHI, I can assure you it took some effort to provide all of the paperwork I needed to show that my original certification through ASTTBC met all of the entrance requirements set out by CanNACHI.  It was far from a cake walk.

Here are some of the inaccuracies contained within the CAHPI news release.

1) CAHPI actually fought against licensing at times during the process leading up to licensing because they were afraid ASTTBC would be named the sole licensing body (something that the ASTTBC certified inspectors at the time were not even in favour of). ASTTBC and the now defunct BCIPI were the only organizations to consistently work towards licensing.

2) Prior to licensing, the ASTTBC certifying process was the ONLY organization to require field training and assessment BEFORE allowing the inspector to offer services to the public. Organizations like CAHPI did not require field training prior to allowing their inspectors to 'Practice' on the public.

3) The CanNACHI entrance requirements have no similarity to the American InterNACHI entrance requirements.  You cannot enter CanNACHI after taking only a internet based exam. (see entrance requirements here).

4) CanNACHI applicants must complete 50 hours of field training BEFORE being granted an Associate Membership level and being able to provide services to the public.  They are not able to 'promise' that they will complete this at a later time and start practising immediately.

5) CAHPI indicates in their article that they are advocating for 300 hours of education yet still only require 150 hours for their new inspectors (which is less than other organizations requirements including CanNACHI, that require 200 min.)

6) The Standards of Inspection from all 4 organizations are virtually identical.  This is in a large part due to the fact that the standards have more to do with insurance limitations than what we as inspectors should be inspecting to provide a suitable level of protection to the public.

If we as an inspection industry are ever to become a profession, then we need to change some fundamental aspects of home inspection:

A) Remove certification of inspectors from inspector associations. 

I have heard horror stories about the certification process within each organization.  Inspectors appear to sometimes get through too easily and the requirements to pass do not seem to be consistent even within the same organization.

I firmly believe that BC Consumer Protection should take over the certification of inspectors as a neutral third party.

The inspection associations would then only be responsible for training, marketing, and providing social/networking events to their inspectors.  They could also provide seminar opportunities, but I believe that a much higher level of seminars education is available in the marketplace by attending events hosted by professionals.  Organizations like TECA, BCBEC, HPO, RCI, & BCSCA all host regular seminars taught by experts.

With the certification removed from the four existing organizations, their is a chance the existing organizations would become obsolete (a needed step) and a new single organization could be created to provide training and social interaction.

B) Remove the ability of agents to recommend home inspectors.

This is by far, the biggest barrier to the BC Consumer being protected during the purchase process.  It is estimated that over 90% of all inspectors rely on agent referrals for their livelihood. Organizations like CAHPI are very efficient at developing relationships between their inspectors and Real Estate agents.  This was one of the key reasons I decided to not pursue a membership with them when I left ASTTBC.

The home inspector is in a direct conflict of interest with the Real Estate agent.  The agents are primarily trying to sell a home and we as inspectors are advising whether that purchase makes sense from a liability standpoint.  The agents are looking for inspectors that are quick (under 3 hours for a house and 1 hour for a condo), provide a report on site (so a checklist or computer generated report that provides little in-depth knowledge to the buyer regarding the dwelling), and finally be non-alarming (in the agent's opinion).  This agent preferred inspector profile is not conducive to truly understanding the current conditions of a dwelling and leads to a purchaser making uninformed decisions.

Until agent based referrals are stopped, very little will change in the industry and consumers will continue making uninformed decisions.