Building Condition Assessments Keep Your Assets Covered

The co-op housing sector, which includes the Agency, has created many resources on building condition assessments and why your co-op needs one.

The building condition assessment (BCA) and reserve-fund study (RFS) are two separate reports, but they work together. Sometimes when people ask about a BCA, they assume it includes the RFS too. You need both to develop long-term planning for capital repairs, replacements and financing for your co-op’s major projects.

Since a BCA / RFS is a snapshot of the condition of your buildings and property at a specific time, it should be updated every three to five years. There are several reasons for this advice:

1. Building components may deteriorate much sooner than you expect because of weather conditions, excessive wear and tear, or problems with the original construction or later work.
2. Your co-op may have put off making routine repairs and replacements or used a construction company that cut corners instead of working to the highest standard.
3. The older your BCA is, the less accurate it will be. For example, it will not include any major work on your property since you completed the last BCA.
4. You know that your annual operating budget will not cover the cost of your co-op’s capital repairs and replacements. That money must come from your capital replacement reserve fund, a big loan, or both. If you’re considering applying for a loan for capital repairs, the lender will likely want a report no more than three years old.

Please read our updated Guide to Building Condition Assessments and Reserve Fund Studies for additional information on getting your BCA updated and what it should cost your co-op.

Funding is available for BCAs and RFSs, as well as other technical reports, through CMHC’s Preservation Fund for co-ops with an operating agreement. If your operating agreement has expired, you should apply to the Seed Preservation Fund.