A reserve fund is a segregated fund of money provided for the major repair or replacement of the capital components of the condominium/strata. Provincial legislation requires that reserve funds and operating funds are not commingled. To determine the funding requirements of the reserve fund a condominium/strata must have a reserve fund study commissioned. In Alberta and Saskatchewan a reserve fund study must be undertaken every five years. In BC a depreciation report must be undertaken every three years. 

A reserve fund study is a review of the capital components along with the supporting historical documentation of the condominium corporation. The report that follows the study outlines the capital components of a condominium corporation, how much money the corporation currently has in the reserve fund, and a projected forecast, including potential costs for the repair or replacement of those components. This may include items such as roofing, balconies, heating systems, and more. Reserve fund study reports are a key document and tool that allows condominium corporations to plan for future repairs and replacements.

A reserve fund study from Entuitive involves one of our experts visiting your condominium to perform a limited visual review of the capital components to understand their current state. This is followed by a review of the corporation’s financial statements and supporting historical documents. Together, this information provides the basis for the final report that highlights the current age, condition, and remaining life expectancy of all capital components, when the components are forecasted for potential replacement, and a high-level estimation of costs.

Like a lawyer might say...it depends! Each corporation is reviewed on an individual basis to determine funding requirements. A new building may have lower funding requirements whereas an older building, or a building with many amenities, may have higher funding requirements. A reserve fund study and report will assist a corporation in determining those funding requirements. Typically, a corporation will contribute 15-50% of their operating budget to the reserve fund.

Entuitive will provide a list of documents that includes historical and current financial documents, previous engineering or contractor reports, service contracts for capital components, and various historical documents of the corporation.

All condominium owners contribute to the reserve fund.

The cost of a reserve fund study and report will depend on the individual corporation. There is no “one size fits all.”

According to the Condominium Property Act of Alberta and the Condominium Property Act of Saskatchewan, a reserve fund study should be completed every five years. 

The legislation in each province lists who can conduct, and the qualifications required, to undertake a reserve fund study and report. 

The team at Entuitive, including engineers, building envelope specialists, and capital planning specialists, have decades of experience in the construction, maintenance, and renewal of all types of condominiums. Our experts work with corporations across our markets to assist them in maintaining and repairing their condominiums, as well as providing education to to ensure the condominiums last a lifetime.