This publication is intended to provide general information only and is not a substitute for legal advice.
After January 1, 2020, in order to act as a reserve fund study provider, a person must be:
Other qualifications and training may be added by the Director for the purposes of the Condominium Property Act and regulations.
In addition to the professional qualifications listed above, reserve fund study providers must also be knowledgeable about how condominium property experiences wear and tear over time, understand the operation and maintenance of the condominium property, and know about the costs of repairing or replacing it.
A business corporation can be recognized as a reserve fund study provider, and may complete a reserve fund study, assigning tasks to people who are not considered qualified, as long as a qualified person is part of the project team.
People with a conflict of interest, or potential conflict of interest, cannot be the reserve fund study provider. Those include:
In condominium corporations with 12 or fewer units, the owners have a choice on how to conduct a reserve fund study. They may hire a reserve fund study provider or they may vote (by special resolution) to let the corporation be its own reserve fund study provider (meaning, the owners can do the study themselves). This is the only size-related exemption in the condominium legislation.
Condominium corporations who act as their own reserve fund study providers must meet all the criteria and guidelines for the reserve fund study itself and the report.
If the owners do not pass a special resolution, the corporation must hire a reserve fund study provider to complete the reserve fund study and report.
If all the condominium units are owned by one owner or a group of owners, and are used as a rental property, the condominium corporation does not need to have a reserve fund. However, if the owners decide to sell any of the units, the condominium corporation must complete the reserve fund study, reserve fund study report and a reserve fund plan before any unit is sold.
All other condominium corporations must establish and maintain a reserve fund. Residential condominium conversions must have a reserve fund study, reserve fund study report and plan in place before the developer sells the first unit. New condominium corporations have two years from the date of registration of the condominium plan to complete the reserve fund study, report, and plan.
The person carrying out a study of the depreciating property must
The person carrying out the study must also do the following:
After the reserve fund study is completed, the reserve fund study provider must prepare a report on the findings of the study and submit the written report to the board. In addition to the information gathered during the study, the report must include
The initial reserve fund study, report, and plan must be completed within two years from the date the condominium plan was registered.
The Condominium Property Regulation requires the board to review the reserve fund report and approve a reserve fund plan. The board, or someone on behalf of the board, such as a condominium manager may prepare the plan. If developed by a condominium manager, then the board will need to approve the reserve fund plan.
If the reserve fund study and report are the first ones prepared for the corporation, the plan must establish a fund that is separate from the administrative or operating fund. The reserve fund plan must also describe the method of collecting the contributions needed for funding and maintaining the reserve fund.
A reserve fund plan must be based on the reserve fund report, and must provide for sufficient funds to be available for repairs or replacement of the depreciating property described in the report. Depreciating property includes common property, real and personal property of the corporation, and managed property.
The allocation for the reserve fund is often included in the corporation’s annual budget, and the contributions are collected monthly, along with the contributions for the administration of the corporation and the common property.
Normally, the reserve fund plan will cover a five-year period, until the next reserve fund study is conducted.
Once the board has made the decision on which funding method to implement, it must adopt the reserve fund plan and send a copy of the plan to the owners so that contributions can be levied.
The board must provide a copy of the reserve fund plan to each owner of a unit in the condominium plan (complex).
If the developer for a condominium conversion is offering a unit for sale, they must provide a prospective purchaser with a copy of the reserve fund report and the reserve fund plan.
The corporation must provide a purchaser or a mortgagee of a unit with the most recent reserve fund plan, as well as the most recent annual report on the reserve fund and a copy of the reserve fund report, within 10 days of receiving a written request for those documents. Fees may apply to this request.
Please see Service Alberta’s Condominium Documents Fact Sheet.
The Condominium Property Regulation states that the corporation must prepare the annual report on the reserve fund. This means the report can be done by the board of the corporation, or the board could delegate the responsibility to someone such as a condominium manager
The annual reserve fund report must include:
The corporation must provide copies of the annual report on the reserve fund, along with the financial statements and annual budget to each owner at least 14 days in advance of the annual general meeting. The corporation must also provide copies of the annual report, financial statements and annual budget to any mortgagee who has given written notice to the corporation.
A purchaser may request a copy of the annual report, and the corporation must provide the report within 10 days of receiving a written request. Fees may apply to the purchaser’s request.