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What is an Engineer's Report?

By 2011-10-20

When you sell a property in BC you're required to prepare a Property Disclosure Statement (PDS) so potential buyers are aware of any possible defects in the property. You, as a seller, must not conceal any defects you're aware of.

If you're selling a strata-titled property -- a condo, townhouse or any multifamily complex where you own your unit plus a share of the common areas -- you must include any engineer's reports or building envelope analysis on the property.

But what exactly constitutes an engineer's report? Should you only include engineer's reports on suspected problems or flaws, or do you need to include any engineer's report that exists, no matter how routine?

Recently the BC Supreme Court made a ruling on that question after it dismissed a condo seller's breach of contract suit. The buyer had rescinded his contract just before completion claiming that the seller had not included an engineer's report in the PSD.

The issue was that the engineer's report in question was not prompted by a suspected mechanical or structural problem that would need to be fixed; it was requested by the strata corporation so they could plan their expenditures for replacement and restoration as the building aged. This kind of engineering report is called a contingency reserve fund study (CRFS) or depreciation report.

The court ruled that any report prepared by an engineering firm must be disclosed in a seller's PDS. So if you are preparing to sell your condo or townhouse, ask your stata council and building management about all engineer's reports on anything to do with the state of the property.

You can read more about the case here.