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Reserve Fund Studies
It is a requirement under The Condominium Act (1998) that all existing and new Condominium Corporations establish a Reserve Fund. This is accomplished by having a Reserve Fund Study performed. The purpose of the Reserve Fund Study is to estimate when the various components of the common elements will require repair or replacement and how much must be collected from the unit owners on an ongoing basis so that sufficient funds will be available.
- A comprehensive study; or
- An updated study not based on the site visit; or
- An updated study based on a site inspection.
The basic components of a Reserve Fund Study should include:
- A Review of the Condominium Documentation - this includes:
- the declaration and bylaws;
- as- built drawings (architectural, structural, mechanical, electrical, site services);
- repair and maintenance records;
- audited financial statements;
- any previous investigation reports on items in the component inventory; and
- any existing warranties, guarantees and service contracts for each item in the component inventory.
- estimated or actual year of acquisition;
- estimated or present age;
- normal life expectancy;
- remaining life expectancy;
- estimated cost of major repair or replacement
The Physical Analysis takes into consideration the results of the site inspection in determining when major repair or replacement may be required. Cost estimates for major repair or replacement established using one or a combination of the following:
- quantity takeoffs and in the pricing;
- historical costs;
- estimates for contractors specializing in this work;
- historical information from similar condominiums.
- description of the financial status of the reserve fund;
- recommended funding plan for a 30 year period;
- recommended annual contribution to the reserve fund;
- recommended annual inflation increase;
- estimated revenue generated from interest;
- if required, year-to-year percentage increases to the annual contribution.
Our methodology for conducting Reserve Fund Studies exceed the strict requirements of the Ontario Condominium Act (1998) and will provide your Corporation with a long-term comprehensive financial plan to ensure adequate funding for the future.
- the Corporation's Board with several acceptable funding options for their consideration,
- if required, on-site meetings (pre and post-inspection),
- a post-study Records Manual, and
- completed Form 15 (Notice of Future Funding for Reserve Fund).
With over 1,400 inspections within the last decade, we have the knowledge, experience and expertise to conduct your Rserve Fund Study.