Service
Reserve Fund Study
Your first step in protecting your property — a comprehensive, accurate 30-year capital plan you can rely on, and actually use.
What is a reserve fund study?
A reserve fund study is an analysis of all the depreciating components a condominium corporation will need to repair and replace over the next 30 years. It records the present condition of each component, estimates when it will need repair or replacement, and what that will cost. Those timelines and costs are compiled into a financial projection that helps the corporation set appropriate contributions. A study generally includes:
Inventory of common property
A breakdown of all common property — building, exterior/interior, mechanical, and life-safety components.
Component analysis
Condition, actual and effective age, remaining life, and current and future replacement costs for each component.
Financial analysis
The level of reserves required to meet anticipated future costs for maintenance and replacement of common property.
Recommendations
Funding models that help the property determine the contributions required to reach its funding targets.
Alberta
Must outline a 30-year capital replacement budget.
British Columbia
Depreciation report over a 30-year timeline.
Ontario
Capital replacement budget over a 30-year timeline.
Saskatchewan
Capital replacement budget for the next 25 years.
Who can author a reserve fund study?
Depending on your jurisdiction, eligible authors may include:
- Professional engineer
- Professional technologist
- Certified or registered engineering / applied science technologist
- Registered architect
- Accredited Appraiser Canadian Institute (AACI) member
- Designated Reserve Fund Planner or Designated Appraiser Commercial (CNAREA)
- Professional quantity surveyor
- Certified reserve planner accredited by the Real Estate Institute of Canada
- Graduate of the Reserve Fund Planning Program at the University of British Columbia
Beyond qualifications, providers must understand how condominiums deteriorate, how the property is operated and maintained, and the costs of repairing or replacing it. Confirm a provider is eligible to author the report in your area before selecting them.
Why a reserve fund study matters
A reserve fund study helps your property plan and prepare for the future. Most importantly, it ensures enough funding is set aside to maintain, repair, or replace common components. Without an accurate, up-to-date study you can't effectively plan, leaving owners exposed to paying for costly repairs out of pocket through a cash call or special assessment. An up-to-date study delivers:
Asset protection
Adequate capital to maintain common property, reducing or eliminating the need for special assessments.
Lower operating costs
Servicing or replacing components at the right time prevents expensive emergency repairs and collateral damage from failures.
Peace of mind
Sufficient funding reduces — and can eliminate — the risk of a special assessment, making the property more attractive to buyers and giving owners confidence their investment is secure.
An up-to-date study is also required in many jurisdictions to complete a sale. Without one, conditions of sale can be delayed and buyers may walk away.
Getting the most out of your study
The biggest challenge every property faces is making sure the study aligns with its future goals. Choose a provider that encourages open dialogue. The board should be open to the provider's recommendations — they offer an unbiased account of the property's condition — while sharing the historical knowledge owners and managers have about the building so it can be reflected in the report.
Owners may also want changes included that aren't strictly required by condition. A good provider will incorporate those requests where they don't compromise the property's financial future. Without strong collaboration, it's difficult to keep a study relevant and accurate until the next one is required.
How Reserve Plus helps
Condominium corporations and stratas use Reserve Plus to generate comprehensive, accurate reserve fund studies — delivered as a first draft in 30 days or less. Every client also gets myRPlanner (powered by StelorPM), our reserve fund management software, included for the full term. With myRPlanner you can:
- Create and approve your own reserve fund plan — a requirement in most provincial jurisdictions.
- Generate annual reserve fund reports comparing actual vs. expected contributions and expenditures.
- Understand your property's risk of a special assessment or cash call.
- Request quotations for upcoming work so you can budget accordingly.
- See clearly how your current financials relate to the reserve fund.