Toll Free: 1-888-250-6696 Q: Which type of condominium requires a Reserve Fund Study? A: In Ontario, every condominium corporation, regardless of its type, must conduct a Reserve Fund Study. This requirement is stipulated by the Condominium Act. Q: When is a Reserve Fund Study required? A: According to the Condominium Act, the first Reserve Fund Study should be conducted within the first year after the condominium registration, and a new Reserve Fund Study should be conducted every three years thereafter.   Q: How often should a Reserve Fund Study be conducted? A: A Reserve Fund Study should be conducted in three-year intervals. Q: What types of Reserve Fund Study exist? A: According to the Condominium Act, there are three classes of Reserve Fund Studies. Class I is a comprehensive study, Class II is an update of an existing Reserve Fund Study with a site visit, and Class III, is an update without a site visit. Q: What is the sequence of conduction a Reserve Fund Study? A: A comprehensive study (Class I) should be conducted within the first year after condominium registration. An update without a site visit (Class III) after three years, and an update with a site visit (Class II) after another three years. This study cycle repeats again and again as long as the corporation exists.  Q: Which elements are included in the Reserve Fund Study? A: The study includes only the common elements of the condominium, as defined in the condominium legal documents. Such elements may include the external walls, roofs, windows and external walls, stairwells, common corridors, parking lot, underground parking, elevators, storm and sanitary systems, watermain, and any other elements and areas within the boundaries of the condominium that are defined as common. Q: What is the time period of the study? A: A Reserve Fund Study is calculated for a period of 30 years. Q: Which parameters are included in the Reserve Fund Study analysis? A: The analysis takes into account only components that are considered regular maintenance. The study lists elements that need to be replaced or repaired as a result of a long term wear and tire, and are valued above $500. The assessor estimates the life expectancy of each element, its current condition, its predicted remaining life, the time interval between element repairs or replacement, and the current replacement or repair cost. The study also takes into consideration the current reserve balance, and the predicted inflation and interest rates. Q: Who is eligible to perform a Reserve Fund Study? A: According to the Condominium Act, only professionals who have specific skills, such as Professional Engineers or Architects, and who carry liability insurance can conduct the study. Q: Why is a Reserve Fund Study important? A: In order to maintain the common elements of the condominium in a proper condition, periodical repairs and replacements of many of the elements are required, which is usually costly. The Reserve Fund Study helps to plan the long-term future budget and enable the Board to collect money in advance and in small portions from the unit owners. That way, when the time comes to replace or repair a certain element, the money for it is already exists in the Reserve Fund, enabling the Board to conduct the work. Q: What needs to be avoided when conducting the study? A: It is important that the study is conducted as precisely as possible. If the study is overpriced then the unit owner’s monthly payment might be higher, which can adversely affect their market value. On the other hand, if the study is underpriced then the budget might be insufficient and prevent necessary repairs or replacements keeping the common element in inadequate condition, and therefore might also adversely impact the unit value as well as functional and safety positional issues. Q: What does the scope of work include? A: In general, the procedure includes a site visit(s), analysis, writing a report, preparing a Form 15, and submitting a draft to the Board for its review. After reviewing the Board’s comments, a final version is issued. Click here to read more about the Reserve Fund Study scope of work. Q: What does the report include? A: The Reserve Fund Study report includes many sections, starting with a general description of the corporation, terms and definitions, limitations of the study, list of reviewed documents, description of elements included in the study and their current condition, costs table, three different scenarios of cash flow tables and charts, Form 15, and photograph documentation. Click here to see a Reserve Fund Study sample report. Q: How long does it take to prepare the study? A: It depends on the complexity of the condominium. For small condominiums, the report can be ready within two weeks, but for condominiums that are more complex, it may take up to four weeks. Q: How much does it cost to prepare the study? A: It depends on the size, type, and complexity of the condominium. Each case should be examined individually. Click here for requesting a quote.