RESERVE FUND STUDY UPDATE
Reserve Fund Study  &
Reserve Fund Study Update for Condominiums

Our Licensed Professional Engineers in Ontario provide Condominium Reserve
Fund Study and Reserve Fund Study Updates for Condominium Apartments,
Condominium Townhouses, Commercial Condominium Buildings and Industrial
Condominium Buildings in Toronto, Mississauga, Brampton, Oakville, Burlington,
Vaughan, Richmond Hill, Aurora, Newmarket, Markham, Pickering, Ajax, Whitby and
Oshawa.
Our fee for typical Condominium Reserve Fund Study Update as follows:
Comprehensive Reserve Fund Study (Class 1)  
Typical Industrial Buildings- $1,675: Typical Commercial Buildings - $1,775
Typical Retail Buildings- $1,975; Typical High Rise Apartment Building - $3,475

Condominium Reserve Fund Study Update with Site inspection (Class 2)
Typical Industrial / Commercial Buildings - $1,375;
Typical Retail Buildings - $1,475; Typical High Rise Apartment Building - $2,475

Condominium Reserve Fund Study Update (Class 3)
Typical Industrial / Commercial Buildings - $1,175
Typical Retail Building - $1,375; Typical High Rise Apartment Building - $1,975

Large condominium buildings with more amenities may cost more.






















Condo Reserve Fund Study Updates are mandatory for all existing condominium corporations as Ontario
Condominium Act, 1998 and its subsequent Regulations 48/01 and 49/01 require all existing and new  
condominium corporations to have a "Condo Reserve Fund Study" undertaken and the
condominium
corporation maintain a separate fund to be used solely for the  purpose of paying for the major repair
and replacement of the common elements and assets of the
condominium corporation,  including
exterior wall claddings,  roofing, garage, balconies, windows, doors, HVAC systems, site elements
including roads, sewers etc. The condo
reserve fund can NOT be used for upgrades and regular
maintenance repairs due to normal wear and tear. A designated portion of the monthly common element
fees paid by the condominium owners fund the condo
reserve fund. Avoiding a Condo Reserve Fund
Study or Condo Reserve Fund Study Update is a violation of the Ontario Condominium Act.

Condo Reserve Fund Study Update ensures all condominium unit owners pay their share of replacement
and repair costs based on their period of ownership. Potential condominium buyers are becoming more
aware of the significance of Reserve Fund Study Update and rely on Reserve Fund Study update to
decide whether or not to buy.

The Condo Reserve Fund Study Update informs the Board of Directors of the condominium corporation
whether the amount of money in the condo reserve fund and the amount of contributions collected from
the unit owners for the condo reserve fund are adequate to provide for the expected costs of major
repair and replacement of the common elements and assets.  All monies in the condo reserve fund
account have to be placed in easily accessible and very safe and secure investments, such as GICs or
government bonds, and not in the stock market or any other risky venture.

If the condominium corporation has never had a Condo Reserve Fund Study, a Comprehensive Reserve
Fund Study including a site inspection  and involves a great deal of information gathering to first
develop a inventory of those items that have varying and limited "life cycles". Such items as roofs,
building cladding, garage, balconies, windows, doors, HVAC systems, plumbing & electrical systems, site
services, paving, landscaping, etc are identified and should be quantified. New condominiums must
have a Comprehensive Reserve Fund Study (Level 1) done within the first year of registration. The
condo reserve fund studies have to be updated every three years  as per Section 94 of the
Condominium Act.

A Condo Reserve Fund Study Update  basically takes the original information and updates the key
parameters such as common elements, age, costs, current reserve amounts and  contributions. The
component inventory is reviewed and verified, then a condition assessment is conducted of each item
(based on visual inspections) and their life cycle costing is updated. The first Condo Reserve Fund
Study Update can be without a site inspection (Level 3). The next Condo Reserve Fund Study Update is
with an inspection (Level 2) with the need for site inspections alternating between each Condo Reserve
Fund Study Update. The same types of tables prepared as part of the original Condo Reserve Fund
Study are again submitted, with the updated information. Updated interest and building component
inflation rates are applied to the current replacement costs and an updated 30 year cash flow projection
is calculated to determine the revised contribution requirements. Condo Reserve Fund Study Updates
must be done in the proper sequence and with regularity. This is to ensure that the reserve funds are
maintained at proper levels and with appropriate contribution adjustments

The following information will be required tp prepare the reserve fund study:
  • As-built drawings and specifications
  • The Declaration and Description.
  • Reciprocal cost sharing agreements
  • Previous reserve fund studies.
  • The most recent audited financial statements.
  • What the current annual contribution to the Reserve Fund is.
  • Repairs or replacements to the common elements that have already been completed and when.
    Similarly, scheduled future work needs to be accounted for.
  • A summary of problems being encountered by the Corporation that should be reviewed.

As-built drawings and specifications will be reviewed prior to visiting the site to become familiar with
the overall design and construction schemes and the drawings are used to "take-off" quantities such as
roofing, exterior wall cladding, asphalt, hallway finishes etc that will assist in preparing the replacement
/ repair cost budgets. To understand the present condition of the common elements, visual site
inspections are performed.  .

The Condo Reserve Fund Study will contain a Physical and Financial Analysis:
  • Background Information about the Corporation in general, where it is, its age, a general
    description of the property as a whole.
  • Inspection Report - Based upon the results of the site inspection, the report will provide an
    itemized overview description of the major common elements. This will include general condition,
    the need and timing for remedial work or replacement and any other information that the Board
    should be aware of.
  • Information Tables - There is typically a table that summarizes the common elements in terms of
    current age, life expectancy, remaining service life and current and future cost budgets.
  • Expenditure Tables - The data from the Information Tables is summarized to show in a tabular
    format when the itemized common element repair/replacements are estimated to take place. For
    each year, these expenditures are summed. The annual projections must be a minimum of 30 years
    commencing in the year the Study (and updates) is prepared.
  • Cash Flow Tables - Based upon the estimated expenditures, different contribution plans can be
    provided. Often, one plan includes the contribution level currently being used as a form of
    comparison to other scenarios.
  • As part of the Financial Analysis, the study must in recommended funding plan projected over 30
    years from the date of the study.

The recommended funding plan must show:
  • Cost estimates of major repairs and replacements based upon current costs.
  • Cost estimates adjusted to account for an assumed inflation rate. The inflation rate must be stated
    in the study.
  • Opening balance of the condo reserve fund account.
  • Recommended amount of contributions to the condo reserve fund determined on a cash flow
    basis that are required to offset adequately the expected cost in the year of the expected major
    repair or replacement common elements and assets.
  • Estimate of the interest earned on the reserve fund contributions based upon an assumed
    interest. The condo reserve fund study shall state the assumed interest rate. The Condominium
    Act requires that interest generated by the Condo Reserve Fund is reinvested into the Condo
    Reserve Fund.
  • The percentage increase in annual contributions to the condo reserve fund for each year of the 30
    year condo reserve fund study.
  • The estimated closing balance of the condo reserve fund for each year.

For any year, the year's contributions plus what is in the condo reserve fund must exceed the estimated
expenditures that year, which must be then maintained for all subsequent years. Condominium
Corporations must show
positive cash flow for the first fiscal year after the study is completed and for
all years thereafter.

After receiving the final Condo Reserve Fund Study Update, the Board has 120 days to decide how to
implement the plan recommended in the Reserve Fund Study Update or put forth another reasonable
plan that outlines the future funding of the Reserve Fund.  It is recommended that the Board request a
Draft of the Reserve Fund Study Update so that Board and Property Management to review the Reserve
Fund Study Update prior to it being finalized.  This will not trigger the "120 day" time line to prepare a
plan and gives the Board and Property Management adequate time to determine the funding plan which
can then be included in the final condo reserve fund study update report. Within 15 days of proposing
the funding plan, the board shall send a notice to all unit owners, containing a summary of the condo
reserve fund study update, a summary of the proposed funding plan and a statement indicating the
areas if any in which the proposed funding plan differs from the condo reserve fund study. The auditor
shall also receive a copy of the reserve fund study and a copy of the proposed plan and a copy of the
notice sent to the unit owners. Upon receiving direction from the Board of Directors, the Condominium
Reserve Fund Study Update is finalized and submitted. Typically Condominium Reserve Fund Study
Update and funding plan are sent to owners at the same time as the budget because implementation of
the condominium reserve fund study update may affect the budget. Summary of the condominium
reserve fund study update and the summary of the proposed funding plan are then indicated in the
status certificate. The Board shall implement the plan within the next 30 days.






















Replacement of aging components in old condominium buildings is very costly
and  requires huge sum of money. Proactive maintenance is very important extend
the life of the aging building components and old equipments in old condominium
buildings.

Condominiums cost money to maintain, and that is primarily what the monthly condominium maintenance
fees are for.  Only a small portion of that monthly condominium maintenance fee goes into the reserve
fund. Each condominium building is different, and every condominium is free to raise maintenance fees
and raise the contribution to the creserve fund. If a major expenditure was contemplated, and the condo
reserve fund was not adequate to cover it, then a special assessment may be necessary.   A new
condominium building will have a much lower reserve fund than an old condominium building. Any new
condominium building MUST start off with money in the condo reserve fund, which is paid by the
condominium developer as per the Condominium Act which states
“A developer’s initial budget must include an annual contribution to the condominium reserve fund that
is based upon calculations of the estimated long-term repair and replacement costs and life
expectancies of the common elements and assets of the corporation. The contribution must be the
greater of the calculated amount or 10% of the other common expenses until such time as a reserve
fund study has been carried out.


Typically a  condominium with monthly maintenance fees over $0.70/sq ft is likely more than 10 years old.
If the monthly maintenance fees are $0.80/sq ft or more, it’s likely that there was a massive repair such
as major repair of parking garage, balcony or facade that drained the reserve fund and necessitated an
increase in monthly contributions. Some condominiums are very exceptional. 25 The Esplanade in
Downtown Toronto owned by Metro Toronto Condominium Corporation # 850 is a well-managed and well-
maintained 1988 built  33 storey high building with $0.46/sq ft maintenance fees due to the income from  
2008 rental parking spaces in the condominium building. In today’s pre-construction condominium
market, some condominium developers will set monthly maintenance fees artificially low, sometimes as
low as $0.40/sq ft. While the condominium  developer is responsible for any budget shortfall in the first
year of the condominium corporation’s operations, it’s in years two, three and four that the
condominium  board and its residents start to realize how ridiculous $0.40/sq ft was. Lanterra
Developments built 24 storey condominium building at 22 Wellesley Street East  increased the monthly
maintenance fees by 37% in the first year and  almost 200% within the first four years.

Our Licensed Professional Engineers in Ontario provide Condominium Reserve
Fund Study and Reserve Fund Study Updates for Condominium Apartments,
Condominium Townhouses, Commercial Condominium Buildings and Industrial
Condominium Complexes in Toronto, Mississauga, Brampton, Oakville, Burlington,
Vaughan, Richmond Hill, Aurora, Newmarket, Markham, Pickering, Ajax, Whitby and
Oshawa.

Our fee for typical Condominium Reserve Fund Study Update as follows:
Comprehensive Reserve Fund Study (Class 1)  
Typical Industrial Buildings- $1,675: Typical Commercial Buildings - $1,775
Typical Retail Buildings- $1,975; Typical High Rise Apartment Building - $3,475

Reserve Fund Study Update with Site inspection (Class 2)
Typical Industrial / Commercial Buildings - $1,375;
Typical Retail Buildings - $1,475; Typical High Rise Apartment Building - $2,475

Reserve Fund Study Update (Class 3)
Typical Industrial / Commercial Buildings - $1,175
Typical Retail Building - $1,375; Typical High Rise Apartment Building - $1,975

Large condominium buildings with more amenities may cost more.

BUILDING EXPERTS CANADA LTD
5215 FINCH AVENUE EAST TORONTO ON M1S0C2
Professional Engineers Ontario - Certificate of Authorization # 100205934
416 332 1743 (24/7)
Text Message 416 727 8336
Email : buildingexpertscanada@yahoo.com
We have recently completed Reserve Fund Study Updates at the following condominiums:
Reserve Fund Study Update for High-rise Condominium Apartment Building in Mississauga
Reserve Fund Study Update for Industrial Condominium Building in Mississauga
Reserve Fund Study Update for Commercial Condominium Building in Markham
Reserve Fund Study Update for Commercial Retail Condominium Building in Oakville
Reserve Fund Study Update for Medium Size Condominium Office Building in Mississauga
Reserve Fund Study Update for Condominium Townhouse Building in Pickering
Reserve Fund Study Update for High-rise Condominium Apartment Building in Richmond Hill
Reserve Fund Study Update for Mid-rise Condominium Apartment Building in Brampton
Reserve Fund Study Update for Condominium Retail Commercial Building in Ajax
Reserve Fund Study Update for Condominium Commercial Building in Burlington
Reserve Fund Study Update for Condominium Industrial Building in Vaughan
Reserve Fund Study Update for High-rise Condominium Apartment Building in Toronto
Reserve Fund Study Update for Townhouse Condominium Complex in Oshawa
Reserve Fund Study Update for Mid-rise Condominium Apartment Buildings in Toronto
Reserve Fund Study Update for Stacked Condominium Residence Building in Toronto
Reserve Fund Study Update for Small Commercial Condominium Building in Aurora
Reserve Fund Study Update for Industrial Condominium Building in Toronto
Reserve Fund Study Update for Low-rise Residential Condominium Building in Brampton
Reserve Fund Study Update for Small Commercial Condominium Building in Newmarket
Reserve Fund Study Update for High-rise Condominium Apartment Building in Mississauga
Reserve Fund Study Update for Industrial Condominium Building in Mississauga
Reserve Fund Study Update for Commercial Condominium Building in Markham
Reserve Fund Study Update for Commercial Retail Condominium Building in Oakville
Reserve Fund Study Update for Medium Size Condominium Office Building in Toronto
Reserve Fund Study Update for Condominium Townhouse Building in Pickering
Reserve Fund Study Update for High-rise Condominium Apartment Building in Richmond Hill
Reserve Fund Study Update for Mid-rise Condominium Apartment Building in Toronto
Reserve Fund Study Update for Condominium Retail Commercial Building in Mississauga
Reserve Fund Study Update for Condominium Commercial Building in Burlington
Reserve Fund Study Update for Condominium Industrial Building in Vaughan
Reserve Fund Study Update for High-rise Condominium Apartment Building in Toronto
Reserve Fund Study Update for Townhouse Condominium Complex in Oshawa
Reserve Fund Study Update for Mid-rise Condominium Apartment Buildings in Toronto
Reserve Fund Study Update for Stacked Condominium Residence Building in Brampton
Reserve Fund Study Update for Small Commercial Condominium Building in Ajax
Reserve Fund Study Update for Industrial Condominium Building in Aurora
Reserve Fund Study Update for Low-rise Residential Condominium Building in Newmarket
Reserve Fund Study Update forSmall Commercial Condominium Building in Brampton