Is this condo reserve fund healthy? How do I evaluate?

Step 1: Review the Reserve Fund Study

Every condo corporation in Ontario must have a Reserve Fund Study updated every 3 years. This document outlines:

• Current fund balance
• Projected expenses over 30 years
• Recommended annual contributions

Step 2: Check Key Indicators

Healthy Signs:

• ✅ Fund balance growing year over year
• ✅ Contributions match or exceed study recommendations
• ✅ No recent special assessments
• ✅ Fund balance covers at least 25% of planned repairs in next 5 years

Warning Signs:

• ⚠️ Fund balance declining
• ⚠️ Contributions below study recommendations
• ⚠️ History of special assessments
• ⚠️ Large capital projects planned without adequate funding

Step 3: Calculate the Per-Unit Reserve

Divide the total reserve fund by the number of units:

• $5,000+ per unit: Generally healthy
• $2,000-$5,000 per unit: May need attention
• Under $2,000 per unit: Concerning

Step 4: Look at Upcoming Expenses

Compare the fund balance against planned projects in the next 5-10 years. Major items to watch:

• Roof replacement: $500K-$2M+
• Elevator modernization: $150K-$500K per elevator
• Garage repairs: $500K-$3M+
• Window replacement: $1M+

A healthy reserve fund is fully funded according to its Reserve Fund Study, with no history of special assessments and growing contributions.