Reserve Fund Study is primarily a financial document, which provides the basis for funding major repairs and replacement of the common elements and assets of the corporation.

The Reserve Fund generally comprises the following elements:

1. It identifies the reserve components and assesses their quality, normal life span and present condition;

2. It estimates the remaining serviceable years for each of the reserve components and proposes a time schedule for repairs and/or replacement;

3. It provides current replacement cost estimates including the cost of removing worn-out items and special safety provisions, if any;

4. It projects the future value of current replacement costs of an appropriate and compounded inflation rate;

5. It projects the future value of current reserve funds compounded at a long term interest rate;

6. It calculates current reserve fund contributions required and to be invested interest bearing securities in order to fund future reserve fund expenditures.

Board of Directors / Property Managers use it as a guide to assist in planning budgets and maintenance programs to ensure that owners contribute their equitable share to maintain the project and thereby eliminate special assessments while prolonging its life in an aesthetic, mechanically sound and serviceable condition.

What we are finding in our work, that as purchasers and owners of strata properties are relocating from other provinces, they are asking to review or pushing to have them completed as they realize the importance of protecting their investment.

After talking to Reserve Planners in other provinces, Realtors are recommending on strata sales that reserve plans, reserve funds and bylaws be reviewed by professionals. In other provinces, financial institutions are requiring the current reserve fund plan and financial position of the strata.

I hope I have answered your questions. If not, please let me know.