Reserve Fund: Questions and
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
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.
- 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)
Buyers' Guide. Published by Canada Mortgage and Housing Corporation,