Reserve Fund Studies - Why Is It Important To Have One?

Condominium Corporations in Alberta are required to have a reserve fund study done every 5 years.  The reason for this is to build in financial protection for asset repairs and maintenance and retain property values for owners.  It should also protect the owners from being assessed over and above the monthly contributions for asset repairs that cannot be funded due to a shortage of fund in the reserve fund. 


The reserve fund study identifies all the assets of the Corporation and determines the remaining life of those components.  Further, it outlines a funding model for the Corporation so that they have enough money to pay for the asset failures at the end of their life or repairs in order to extend the life of the asset. 


The reserve fund study must be undertaken by a qualified person as outlined in the Act.  The Board of Directors should be sure to check the credentials of any contractor they intend to hire to do the study for the Corporation.  Most companies will include an update report if major repairs or changes have happened during the 5 year period between Reserve Fund Studies at no extra charge.