The primary standard for Depreciation Reports, also known as Reserve Fund Studies or Replacement Reserve Studies, is their local legislation. Members of Appraisal Institute of Canada (AIC) use their organizational standards or the locally legislated ones, whichever are higher. OurCastle is a member of Real Estate Insitute of Canada and uses the AIC standards in its reports.
The primary standard for Building Condition Assessments (BCA), also known as Property Condition Assessments or Facility Condition Assessments, is ASTM E2018-5 from organization formally known as American Society for Testing and Materials. Most providers tailor them to fit requirements of a Reserve Fund Study of local legislation .
Many organizations prefer Depreciation Reports from dedicated planning professionals rather than wide service engineering firms. Reserve fund planners do not have an incentive to suggest scheduling capital renewals sooner than necessary.
Differences between a Depreciation Report and a BCA are defined by their Scope of Work.
A typical Scope of Work for either study involves only a ‘walk-through survey’ without invasive testing. In such cases, users will find almost no differences between the two.
A Depreciation Report does not include invasive testing, like cutting into walls or pipes. A BCA can include invasive testing as an add-on to the typical Scope of Work.
A Depreciation Report will always include financial projections over an extended period of time (~25-30 years). In some cases, a BCA may only include financial projections over a short period of time (~5 years).