Reserve Fund Studies, Toronto, ON

What You Need to Know about Reserve Fund Studies

Reserve Fund Studies in Toronto, OntarioWhen you own a home, you might be the kind of person who sets aside money each month in anticipation of needing a new roof, a replacement HVAC system, or another major expense. However, other people wait until the expense comes up and then apply for a loan. When it comes to residential and commercial condominium properties, going with the latter option would be quite foolhardy for a variety of reasons.

First of all, these types of properties can change hands often, so it can be like a game of hot-potato with the last owner footing the bill for the entire lifespan of the expenditure, while the earlier owners enjoyed them at no cost whatsoever. If it were to be done that way, it would make many properties very difficult to sell at market value, as nobody wants to inherit those types of expenses. In addition, someone who just purchased a condo unit has likely invested heavily at the purchase and may be ill-prepared financially to foot a large repair or replacement bill.

So that this type of situation doesn’t occur and everyone pays their fair share of future repairs, a fund is set up that is added to regularly by each current owner. This fund is designed to pay for repair projects and major renovations, such as parking lot resurfacing, roofing replacement, HVAC equipment replacement, common area renovations, and more.

Condo unit owners need peace of mind that they are not being charged excessively nor charged too little leading to a large bill later, which is where reserve fund studies come into the picture. This is not a voluntary practice, as the Condominium Act of 1998 made it a requirement. It also requires that reserve fund studies be completed by a specialist, which is where we come in at Belanger Engineering. We serve the Toronto, Ontario area with a variety of building review & financial planning services.

Reserve fund studies are not a once-and-done service, as things are constantly changing with any condominium property. That is why we offer three levels of service based on where you are in the process and what the situation is.

  • Class 1 – This is a comprehensive full-level study that is typically done when a property is first developed or when there haven’t been any reserve fund studies previously completed. The key components of this type of study are the compilation of a full inventory of all components, assessment of the condition of each inventory item, development of a professional estimate of the value and projected life of each inventory item, compilation of a funding status statement, and providing of a funding plan. This level requires on-site visits and inspections.
  • Class 2 – This is a review stage that is likely needed every 3 to 5 years. It is designed to be sure things are still on track, so we verify the inventory we completed previously and pretty much do everything we did before during an on-site visit to determine if the funding plan is still accurate. If it is not, we’ll provide you with a revised funding plan.
  • Class 3 – At anytime between on-site visits, you can request a reserve study update. While we won’t visit the site for this level of reserve fund studies, we do potentially make revisions based on other contributing factors besides condition assessments and inventory verification. This might include a change in material pricing, current labour prices, and other considerations.

It is important to note that, although we have more than 20 years in business which we utilize for completing our reserve fund studies, complete accuracy cannot be assured. There are too many other deciding factors, including how well you care for the inventoried items, if there are outside influences that resulted in emergency repairs, or if your board chooses to accelerate or delay certain expenditures. We are happy to meet with you to discuss how we conduct reserve fund studies and answer any questions you might have. Call today to schedule a consultation.


At Belanger Engineering, we perform reserve fund studies in Toronto, GTA, Mississauga, Markham, and Ajax, Ontario.