Condos/Stratas › Reserve Funds

• Reserve Fund Requirements
• Reserve Fund Study
• Reserve Fund Plan
• Eligible Reserve Expenses
• Funding the Reserve Fund

Funding the Reserve Fund

British Columbia

In BC, the contributions to the reserve fund by the developer are discussed under BC Start Up Rules

After turnover, the required contributions to the reserve fund are defined in Regulation 6.1:

• if the reserve fund has a balance of less than 25% of the amount of the annual operating contribution at the end of the fiscal year ( or estimated operating expenses in year 1), the minimum contribution is 10%
• if the reserve fund has at least 100% of the annual operating contribution, then any further contribution must be approved by a 75% vote

Otherwise any amount of contribution is acceptable

 Alberta

Paragraph 30.1(2)(b) of the Act states that once the expenditure has been made, there must be sufficient funds left for the purpose of capital replacement. The exact balance that needs to remain in the fund, after an expenditure, would be the amount that is reasonable as determined by the reserve study and the plan for funding.

So how does the Board deal with an unexpected expense and ensure sufficient money remains in the reserve fund to comply with the Act?

1. The Board could make a special assessment to the owners.
2. The Board could transfer more money from the operating fund to the reserve fund.
3. The corporation could obtain a bank loan and transfer those funds into the reserve fund.
4. The corporation could allow the payable to the contractor to remain outstanding for a period agreed to by the contractor.