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should align with a long-term main- informed about any changes in the 5. Compliance
tenance plan and be executed with condition of common elements and Compliance with the Condominium
due diligence. The board must refrain adjust contributions, as necessary, to Act, 1998, and other relevant regulations
from using reserve funds for regular maintain an adequate fund balance. If is non-negotiable. Non-compliance
maintenance or operational expenses, an unexpected expenditure negatively can lead to legal repercussions and
which should cover the condominium’s impacts the reserve fund balance, the jeopardize the financial stability of the
operating budget. The board must also board should consider doing an updated condominium corporation.
ensure that major repairs and replace- study before the next scheduled one.
ments are carried out. 2. Engaging Qualified Professionals Conclusion
5. Improvements The Act sets out who can conduct The board’s obligations regarding
If the board is uncertain whether all a reserve fund study. Working with reserve fund contributions and spend-
or part of a reserve fund expenditure accredited reserve fund analysts and ing are critical to the financial health
may constitute an improvement, which engineers ensures that the reserve fund and longevity of the condominium. By
would require either notice to owners study is accurate and comprehensive. conducting regular reserve fund studies,
or approval of owners, it should check These professionals provide valuable ensuring adequate funding, segregat-
with the corporation’s legal counsel for insights into the condition of the prop- ing, properly investing reserve funds,
advice. Some improvements can be erty and the financial requirements spending prudently, and maintaining
included in the expenditure without for its upkeep. Shopping reserve fund transparency, the board can safeguard
going to the owners, others cannot. It studies to get outcomes requiring lower the interests of all unit owners. Adopt-
depends on what the improvement is contributions is inappropriate. ing best practices and adhering to legal
and what its cost is. 3. Long-Term Planning requirements further strengthens the
6. Transparency and Communication The board should adopt a long-term board’s ability to manage reserve funds
Effective communication with unit perspective in managing the reserve effectively, ensuring the sustained
owners is critical. At AGMs, and more fund. This involves anticipating future success and stability of the condomin-
often, if necessary, the board should maintenance needs and adjusting the ium corporation. n
provide regular updates on the status reserve fund contributions accordingly.
of the reserve fund, including contri- Long-term planning helps avoid sudden Audrey Loeb is a senior partner in
butions, expenditures, and the results financial pressures and ensures the the Condominium Law Group at Shib-
of reserve fund studies. Transparency ongoing viability of the condominium. ley Righton LLP. She has a focused
builds trust and ensures unit owners are When preparing the annual operating practice in condominium law. She pro-
informed about their financial health budget, the board should also consider vides advice to buyers and sellers on
and future obligations. preparing a reserve fund budget for the conveyancing matters, to developers
next fiscal year, including the antici- on condominium development, and to
Challenges and Best Practices pated work and associated costs. condominium corporations on issues of
Managing reserve funds involves 4. Educating Unit Owners corporate governance and operations.
navigating various challenges. Here are Educating unit owners about the Audrey has been recognized as a leading
some best practices to address these importance of the reserve fund and practitioner in her field by Martindale
challenges effectively: their contributions will create a coop- and Hubble, Lexpert, and Best Lawyers
1. Regular Monitoring and Review erative environment. Understanding in Canada for several years. Audrey is a
The board should regularly moni- the necessity of these funds and the member of the Canadian Condominium
tor the reserve fund’s status. Periodic rationale behind their contributions Institute and has served as a member of
reviews of the reserve fund study encourages support for the board’s a condominium board of directors.
are essential. The board should stay financial decisions. www.shibleyrighton.com

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