The Condominium Property Act in Alberta, requires that condo boards establish and maintain a reserve fund, to provide capital for major repairs and replacement of common property owned by the corporation.
As buildings age, they need to be repaired: roof, parking lots, landscaping, etc. Condo owners must pay for the repair or replacement of common property, which is where a reserve fund comes in.
The Condominium Property Act requires that condominium corporations establish and maintain a capital replacement reserve fund to provide for major repairs and replacement of property and common property owned by the corporation. As buildings age they need to be repaired and maintained e.g. the roof of the complex needs to be replaced. The same is true of other parts of the common property such as the asphalt in the parking lot, underground utilities, or services and landscaping. Condominium owners must pay for the repair or replacement costs of the property owned by the corporation. The reserve fund is not used for repairs or replacements that are done annually. [Service Alberta]
What is the condo board’s responsibility with a reserve fund?
- Hiring a qualified person to conduct and prepare a reserve fund study
- Adopt a reserve fund plan
- Provide a copy of the approved reserve fund plan to condo owners before implementing
- Maintain reserve fund in a separate trust bank account
- Provide owners with a report on the reserve fund at every AGM
How much money should be in a reserve fund?
Each condo will have a different number, which is determined by the reserve fund study.
How is a reserve fund funded?
Condo fees (which could be increased to make room), special assessments to owners or borrowing money.
Who can do a reserve fund study?
Only a qualified person, which the condo board will need to source. They should ask for: credentials, references and liability insurance.
Interested in learning more about reserve fund studies and reserve fund plans? Check out the Government of Alberta website. If you have questions about condos or condo buying in Calgary and area, please feel free to contact us or tweet us.
