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.
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.
