Reserve Fund: Questions and Answers
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What is a Reserve Fund?

Under the Condominium Act, a condominium corporation is required to establish a fund for the repair and replacement of the common elements and assets of the corporation. The common elements are everything on the property except each unit. These include, but are not limited to: outside walls, roofing, windows, patios, courtyard and parking garage.
A portion of your monthly maintenance fees is put towards the reserve fund.
A condominium corporation is required by law to conduct a "Reserve Fund Study" periodically.

What is a Reserve Fund Study?

A reserve fund study is conducted by an independent qualified company. The study examines the current state of the property and determines what future expenditures will be required to maintain the common elements, and when those expenditures are likely to take place. The study includes a schedule covering the next thirty years and the level of funds that are required for those expenditures.

What if the Reserve Fund isn't adequate?

The condo corporation is required by law to ensure that the reserve fund is adequate to cover those expenditures. The Board must collect sufficient money from the owners to meet this requirement.

Can I opt out of the Reserve Fund or stop paying maintenance fees?

No, condominium fees are neither optional nor negotiable. When you buy a condominium, you purchase a portion of a condominium corporation. You have exclusive use of your own unit, and you are part-owner of the common elements, in a proportion based on your unit's square footage. Larger units pay higher maintenance fees and smaller units pay lower maintenance fees. Even if you don't use the garage, you are required to pay your portion to maintain the garage.

Sources:
  • Condominium Ownership: What You Need to Know, by Audrey M. Loeb, LL.B., LL.M., ACCI. Published by the Canadian Condominium Institute, 2006. - The Condominium Act: A User's Manual, 2nd Edition, by Audrey M. Loeb. Published by Thomson Canada Ltd., 2005.
  • Condos (Ontario Government website)
  • Condominium Buyers' Guide. Published by Canada Mortgage and Housing Corporation, 2002.