Reserve Fund Studies and Depreciation Reports: What Canadian Condo and Strata Boards Need to Know

Ontario reserve fund studies under the Condominium Act

Section 93 of the Condominium Act, 1998 requires every Ontario condominium corporation to keep at least one reserve fund, and that money can go only to major repair and replacement of the common elements and assets. Section 94 requires periodic reserve fund studies to test whether the fund, and the contributions going into it, are adequate.

The first study is due within a year after the declaration and description are registered (the step that creates the corporation), and it has to be a Class 1 study with a site inspection. After that, a new study is due at least every three years, alternating between an update without a site inspection (Class 3) and an update with one (Class 2). O. Reg. 48/01 sets the cycle, and the Condominium Authority of Ontario (CAO) explains it in its guide to reserve funds.

Whatever the class, each study has two halves. The first half is the physical analysis: an inventory, called the component inventory, of every item the corporation expects to need major repair or replacement within at least 30 years, where replacement costs $500 or more. For each component, it records age, normal expected life, remaining life, and estimated cost. The second half is the financial analysis, which sets out a recommended funding plan over at least 30 consecutive years, including inflation, interest, contributions, and closing balances.

The study must come from someone in one of eight prescribed professional classes, such as an architect, a certified reserve planner, or a holder of a certificate of authorization under Ontario's Professional Engineers Act. A director, officer, property manager, or owner of the corporation can't prepare it.

What the board has to do after the study arrives

Section 94 starts the clock when the board receives the study:

• Within 120 days, the board reviews the study and proposes a plan for future funding of the reserve fund.
• Within 15 days of proposing that plan, the board sends owners the mandatory Notice of Future Funding of the Reserve Fund, which summarizes the study and the plan and states where the plan differs from the study. The auditor gets the study, the plan, and the notice.
• Once 30 days have passed after that notice goes out, the board implements the plan.

The plan also has a target. For most corporations, the plan must bring the reserve fund to an adequate level in the fiscal year after the study is completed (O. Reg. 48/01, s. 33). A study finished in fiscal 2026 sets the bar for fiscal 2027.

That target is harder to pin down than it sounds, because neither the Condominium Act nor the regulation defines "adequate." Un-proclaimed amendments to the Act would have added guidance on what adequate funding means, but the CAO reported in December 2025 that they were not included in Bill 72 and would expire by the end of 2025. Under section 94, the board determines whether its plan will make the fund adequate, and the study is its evidence.

The only fixed contribution figure in the Act's reserve fund sections applies for a limited time. Contributions must be at least 10% of the budgeted contributions to common expenses, excluding the reserve fund, only until the corporation completes its first study and implements the plan (s. 93(5)). After that, contributions have to be the amount reasonably expected to cover major repair and replacement, based on expected costs and life expectancy, and the Act sets no fixed percentage (s. 93(6)).

BC depreciation reports under the Strata Property Act

BC's equivalent is the contingency reserve fund, which pays for common expenses that usually come up less often than once a year, along with expenses the strata doesn't normally expect to have at all (section 92 of the Strata Property Act). The depreciation report is the planning document behind that fund.

The rules tightened on July 1, 2024. Strata corporations can no longer hold an annual 3/4 vote to defer a depreciation report, and every strata with five or more lots now needs a new report at least once every five years, per the Strata Property Regulation and the Province's depreciation report requirements. Stratas with four or fewer lots are exempt.

Stratas without a recent report were given deadlines to catch up, and the first one has already passed. Stratas established before July 1, 2024 that hadn't obtained a report since December 31, 2020 had to get one before July 1, 2026 if they sit wholly or partly in Metro Vancouver, the Fraser Valley Regional District, or the Capital Regional District (excluding islands reachable only by air or boat). The same stratas located wholly outside those areas have until July 1, 2027. Stratas established on or after July 1, 2024 but before July 1, 2027 need their first report within two years of the first annual general meeting.

The report itself follows a set format. It has to include a physical component inventory and evaluation based on an on-site visual inspection, a summary of repairs and maintenance work, 30-year financial forecasts with the assumptions stated, the current fund balance, at least three cash-flow funding models, and an executive summary (Regulation, s. 6.2). For reports obtained on or after July 1, 2025, only six professional groups qualify to prepare one: engineers, architects and architectural technologists, applied science technologists and certified technicians, accredited appraisers, certified reserve planners, and professional quantity surveyors.

The contribution floor and the owner vote

Since November 1, 2023, the annual contribution to the contingency reserve fund has to be at least 10% of the amount budgeted for the operating fund contribution that year (Regulation, s. 6.1). The same section requires the contribution to be set after considering the most recent depreciation report.

The contribution is set in the budget, and the budget passes by majority vote of owners at the annual general meeting (Act, s. 103). Spending from the fund on repair, maintenance, or replacement recommended in the most current depreciation report also needs only a majority vote (s. 96), which is one practical reason to keep the report current.

The report also reaches buyers. A strata has to attach its most recent depreciation report to the Information Certificate (Form B), which is due within one week of a request from an owner or purchaser (s. 59), so a purchaser who asks for one gets the same report owners have.

Ontario and BC at a glance

What feeds the study

Ontario's regulation spells out the records a provider has to review, and most of them sit in the corporation's files rather than on site. For a Class 1 or Class 2 study, the list includes (O. Reg. 48/01, s. 30(3)):

• warranties, guarantees, and service contracts for each item in the component inventory
• as-built architectural, structural, engineering, mechanical, electrical, and plumbing plans and specifications
• repair and maintenance records and schedules
• any other records the provider needs to assess each component

For the financial analysis, the provider also reviews the most recent audited financial statements, the most recent reserve fund study, and the most recent Notice of Future Funding (s. 29(5)). A Class 3 update has no site inspection at all. It's based on verification of the corporation's records and interviews with its directors, officers, employees, and agents (s. 30(4)).

BC's rules say less about inputs, but every depreciation report has to include a summary of repairs and maintenance work (Regulation, s. 6.2). The Act also requires stratas to keep every depreciation report, along with engineers' reports and other reports on the repair or maintenance of major items (s. 35), and depreciation reports have to be kept permanently (Regulation, s. 4.1).

Either way, a record the corporation can't produce is a record the provider can't verify.

Funding decisions to make before you finalize the 2027 budget

The study hands the board options. The budget is where one of them becomes a number in every owner's monthly fees.

In Ontario, section 94 doesn't give owners a vote on the funding plan. The board proposes it and implements it, and the Notice of Future Funding is how owners hear about it. If your study was completed this fiscal year, the plan you adopt has to reach adequate funding in the following fiscal year, which puts that plan to the test in your 2027 budget. If the board decides to contribute less than the study recommends, the notice has to say so.

In BC, owners make the call. The proposed budget goes out with the AGM notice and passes by majority vote, so council's job is to put the depreciation report's funding models in front of owners in a form they can compare. The 10% floor is the minimum, not the answer. Timing matters too. A strata wholly outside the three named regions that still needs its report has until July 1, 2027, and every report requires an on-site inspection by a qualified professional, so it can't be pulled together at the last minute.

In both provinces, the choice is about how the fund gets paid for over time. BC's funding models can combine regular contributions, special levies, and borrowing (Regulation, s. 6.2). The recommended funding plan in an Ontario study shows the suggested contributions and the fund's closing balance for each year of a projection covering at least 30 years. The board's job is to pick a path on purpose and explain why.

Where BuildingLink fits

Every step above depends on records, and that's where BuildingLink fits. The platform doesn't prepare reserve fund studies or depreciation reports, since both provinces reserve that work for qualified professionals. It keeps the records a study depends on in one place all year, so the package is ready when the provider asks.

The equipment directory stores records for stationary equipment, such as boilers and elevators, with purchase and installation dates, costs, warranty details, and attached manuals, receipts, and photos. Enter each item's installation date, useful life, and replacement cost, and the equipment replacement report projects replacement dates and total expected costs by year for the date range you choose. Management can export it to Excel for the board between studies and hand the same data to the provider.

Those records get more useful as work is logged against them. Staff can link maintenance requests to specific equipment items, and the maintenance requests by equipment item report shows how many requests each item generated over any date range. An increase in requests can point to equipment that is faulty or may need replacement. Recurring tasks automatically generate maintenance requests for preventive maintenance at set intervals, and each task can be linked to an equipment item.

The rest of the package lives in the document library, which organizes engineering reports, past studies, and funding notices by category and subcategory, with role-based permissions and unlimited storage. It all sits inside the same condo and strata management software your team uses for day-to-day operations. If your board is still comparing platforms, our guide on what Canadian condo and strata boards should look for in management software covers the rest of the checklist.

Get the records ready before the provider asks

In Ontario, a study completed this fiscal year sets the bar for 2027. In BC, stratas wholly outside the three named regions face a July 1, 2027 deadline for their depreciation report. Boards and councils that start budget season with complete equipment records, service history, and past funding decisions give the provider their community's real numbers to work from.

Connect with a member of our team to see how BuildingLink keeps equipment, maintenance history, and documents ready for your next study.