Synthetic example: Buyer report

Synthetic example

FRC / FEE & RESERVE CHECKBUYER REPORT

What the documents mean for your purchase.

Synthetic Condominium Corporation No. 9999 / Suite 201 / 2099 fiscal year

Budget and study: 2099 / Work schedule read: 2099 only / Audited to December 31, 2098

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The building, the money, and what to ask.

The nearest work, the funding, and three questions that could change your decision.

123

Nearest significant work

• 1

  Garage roof slab waterproofing

  2099 / $950,000 S2 p. 3

• 3

  Main Roofing System

  2099 / $700,000 S2 p. 3

• 2

  Window Replacement - Phase 1

  2099 / $520,000 S2 p. 3

Plus $40,000 contingency in 2099: money set aside, not a building part.

The schedule read covers 2099 only (2100 to 2103 not read).

Reserve funding this year

$103,020 a year less than the study.

Sources: S1 p. 1; S2 p. 1

Reserve outlook

The study's projection stays above zero; lowest $58,020 (end of 2099).

This chart assumes the reserve contributions in the study. The 2099 budget contributes $103,020 less.

Source: S2 p. 5. The study's figures, not a forecast by this report.

Three questions for the seller, management or your lawyer

1. 1

   Has the board adopted a funding plan that replaces the study's $303,020 reserve contribution for 2099, or does it plan to close the $103,020 gap?

2. 2

   Does the status certificate disclose any special assessment, levied or approved, and any arrears on the unit?

3. 3

   Is the garage roof slab waterproofing work ($950,000, 2099) contracted, delayed or done?

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The building in detail.

Planned replacements are not evidence that something has failed.

1234

1. 1

   Location 1: Underground garage

   2099 / $1,130,000

   The parking levels below ground. "Roof slab waterproofing" is the waterproof layer on the concrete slab that forms the garage's roof (the study lists it under "Underground Parking Garage"). Study items: Roof Slab Waterproofing System; Parking Garage Painting.

2. 2

   Location 2: Windows, balconies and walls

   2099 / $780,000

   The outside walls, windows and balconies. Study items: Window Replacement - Phase 1; Balcony Concrete Repairs.

3. 3

   Location 3: Roof

   2099 / $700,000

   The roof covering that keeps water out of the building. Study items: Main Roofing System.

4. 4

   Location 4: Fan-coil units

   2099 / $160,000

   The heating and cooling units inside the suites. Study items: Fan Coil Unit Replacement.

Source: Reserve Fund Study, p. 3. Every item behind these amounts is in the full list at the end.

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Follow the money.

The yearly contribution and the reserve balance answer different questions.

1. How much goes into the reserve each year?

Source: Budget, p. 1; Reserve Fund Study, p. 1.

The reserve contribution is what the corporation puts into the reserve fund each year. The balance is what the fund holds at a point in time.

2. How could the reserve balance change?

The Reserve Fund Study's own projection of the year-end balance, 2098 to 2099.

This chart assumes the reserve contributions in the study. The 2099 budget contributes $103,020 less.

Starting point: $152,000 at the end of 2098, as the study projects it.

Contributions, spending, interest and inflation are the study's own assumptions. This report does not change or extend them.

This is the study's projection, not a forecast by this report or a decision by the board. Positive balances alone do not establish long-term adequacy.

Source: Reserve Fund Study, p. 5.

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The next five years in detail.

Estimated project spending for the whole corporation, not a charge to one unit.

1. $2.81 million

   2099

   Garage and 3 more

2. Not established

   2100

   Not covered by the schedule read

3. Not established

   2101

   Not covered by the schedule read

4. Not established

   2102

   Not covered by the schedule read

5. Not established

   2103

   Not covered by the schedule read

These are estimates for the whole corporation, paid over time from the reserve fund. They are not charges to one unit, and a project price alone does not show whether an extra payment will be needed.

The schedule also lists 11 items for 2096 to 2098, before 2099; whether that work was done is not stated. See the full list at the end.

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The evidence behind the numbers.

The documents, what was read from them, and how each amount was worked out. You do not need to read this section to understand the main result.

Documents read

• S1

  Budget 2 pages; used: pp. 1, 2

  2099 reserve contribution $200,000; a disagreement or ambiguity discussed in this report; statement on special assessments. Text read.

• S2

  Reserve Fund Study 5 pages; used: pp. 1, 3, 5

  2099 reserve contribution $303,020; schedule of major work: 18 items, 2096 to 2099; year-by-year balance projection. Text read.

• S3

  Unit Fee Schedule 1 page; used: p. 1

  Monthly payment $810.76 for suite 201. Text read.

• S4

  Audited Financial Statements 1 page; used: p. 1

  Reserve balance $152,000 on December 31, 2098. Text read.

Text read means the software read the words on the pages. Read by text recognition means the pages were scanned images and the software recognized the words on them. Neither guarantees that every table in a document was read.

Check the calculation

Reserve difference: $303,020 - $200,000 = $103,020 a year.

Assumptions

• Amounts are in Canadian dollars, as the documents state them. No interest, inflation or later decision is added.

Where the documents disagree or are unclear

• Owners' yearly fees and total revenue are different figures, not a conflict: "Maintenance Fees 949,380" is what owners are charged; "TOTAL REVENUE $972,912" also counts other revenue lines ($23,532 more). This report uses the owners' line (Budget, p. 1).

What was not established

• No engineering or building-condition report was uploaded, so this report does not describe the building’s current condition. The Reserve Fund Study was used for its plan and costs; any condition notes it contains were not assessed, and it is not a physical inspection.
• Work after 2099: the schedule that was read lists nothing later, which does not show that none is planned.