04-23-2021, 03:08 PM
(04-23-2021, 01:06 PM)tomh009 Wrote:(04-22-2021, 11:25 PM)nms Wrote: Under the Condominium Act, 1998, a reserve fund must be kept that is adequate for the major repair and replacement of the common elements and assets of the corporation. (eg elevators, common areas, parking areas, windows, roofs etc). As they retire their legal debt, they may be enough in arrears of reserve fund contributions that it will take a while to get to a point where they can reduce their condo fees.
I'll make this a bit more specific.
Under the Condominium Act, 1998, a reserve fund must be kept that is projected to be adequate for the major repair and replacement of the common elements and assets of the corporation for the next 30 years.
The plan must be developed by a professional engineer and the corporation must follow it. If the current reserve fund is insufficient (given the projected future contributions) the contribution levels will need to be increased -- and that will indeed impact the condo fees.
I had a co-op job once helping do these reserve fund studies. They're quite in depth. We would go to condominiums and look at every common element, calculate quantities, estimate the age and replacement date and cost of each, project ahead 30 years and then figure out what the reserve fund contributions need to be to pay for it all.
Most were buildings from the 70's or 80's still on their original roof, windows, and parking lot, and these three items were almost always in really bad shape. The recommended increase in reserve fund contributions in order to pay for them was usually quite steep. I imagine it would not be fun to be on a condo board and be the recipient of one of those reports.