Reserve funds and studies
Answers to questions about your condo’s reserve funds and studies.
A It is like a homeowner’s savings plan for keeping their home in good repairs. The reserve fund cannot be used to make alternation to the condo’s assets, including to install electric vehicle charging stations. Corporations must conduct periodic studies to determine if the amount of money in their reserve fund is adequate. CAO’s Guide to Ensuring Health Reserve Funds has more in-depth information.
Reserve fund studies must happen periodically as defined in the Condo Act. They must be conducted by a designated expert like an engineer or architect. They are used to create the reserve funding plan and outline the future projected needs of a condo’s common elements and assets.
There are three types of reserve fund studies:
- Class 1 – Comprehensive study
- Class 2 – Updated study with a site inspection
- Class 3 – Updated study without a site inspection
CAO’s Guide to Ensuring Health Reserve Funds has more in-depth information.
Your condo corporations must conduct periodic studies to determine if the amount of money in their reserve fund is adequate. A class 1 study must be conducted within the first year following the registration of the condo’s declaration and description. After the first class 1 study is done, the class 3 and class 2 studies are done on an alternating basis at least every three years.
Important Note: The reserve fund study provides an estimate of future costs and may be an underestimation of repair and replacement costs as unexpected expenses may arise. CAO’s Guide to Ensuring Health Reserve Funds has more in-depth information.