Is the 5 % of common expenses threshold written into the law?

Yes, as a transitional rule. Section 153, para. 2 of Bill 16 provides that, between the coming into force of the contingency fund regulation (August 14, 2025) and the moment the board sets the sums on the basis of the first study, the sums paid into the fund are at least 5 % of the co-owners' contributions to common expenses. The floor is not in article 1071 of the Civil Code, and it ends once the sums are set from the study.

Didn't the 5 % come from the Civil Code?

Yes, before Bill 16. The Civil Code itself set a minimum of 5 % of contributions to common expenses. Section 40 of Bill 16 struck that rule out on the day the regulation came into force, and replaced it with the transitional floor of s. 153, para. 2 of Bill 16, which is not part of the Code.

What minimum rule does article 1071 set?

Until the promoter has obtained the contingency fund study, contributions to the fund must equal 0.5 % of the building's reconstruction value (art. 1071, para. 4). Outside the promoter phase, article 1071 provides that the sums are set on the basis of the study's recommendations.

What if my declaration of co-ownership says 5 % of common expenses?

Then it is also a contractual floor specific to your syndicate. It cannot lower the minimum the law requires, and it does not replace the study's recommendations once the study is obtained.

Does the « 5 % » contingency fund threshold really exist? (Quebec, Bill 16)

Q: When does the study replace the 5 % floor?

The board must set the sums at the latest 30 days after the first annual meeting held after the first study is obtained (Bill 16, s. 153, para. 1). The transitional 5 % floor ends then. The study must be obtained by August 15, 2028 for existing co-ownerships (Bill 16, s. 151). If it shows the fund is insufficient, the board sets the sums so that it is sufficient at the latest 10 years after the first study (Bill 16, s. 154).

The « 5 % of common expenses » figure keeps coming up in board meetings and in articles about Bill 16. It has often been called a myth, because it does not appear in the current text of the Civil Code of Québec at article 1071. It does exist, though, elsewhere: in Bill 16 itself, and only for a transitional period. Here is the exact reading.

Bill 16's transitional 5 % floor

Section 153 of Bill 16 (2019, c. 28) has two paragraphs.

First paragraph: the board must, at the latest 30 days after the first annual meeting held after the first contingency fund study is obtained, set the sums to pay into the fund on the basis of that study.
Second paragraph: between the coming into force of the first regulation made under article 1071 of the Civil Code and the moment those sums are set, the sums paid into the contingency fund are « at least 5 % of the co-owners' contributions to common expenses ».

That regulation is the one adopted by decree 991-2025, in force since August 14, 2025. Since that date, every divided co-ownership syndicate must therefore pay at least 5 % of contributions to common expenses into its contingency fund, until its board sets the sums from its first study.

Three clarifications:

It is a minimum, not a target: the real need is the one the study will quantify.
The floor applies to every syndicate, whether or not its declaration of co-ownership has a rule of its own.
It ends syndicate by syndicate, when the board sets the sums on the basis of the first study.

The text does not say whether the 5 % is computed on all contributions to common expenses, fund contribution included, or only on the part used for operating expenses. If in doubt for your syndicate, have a professional confirm the calculation.

Why it is not in article 1071

Before Bill 16, the Civil Code itself set a minimum of 5 % of contributions to common expenses, in a provision since repealed. Section 40 of Bill 16 struck that provision out on the very day the contingency fund regulation came into force. The Code's permanent rule was thus replaced by the transitional floor of s. 153, para. 2 of Bill 16, which is not part of the Code.

Article 1071, in its current form, instead provides that:

The syndicate establishes, based on the estimated cost of major repairs and the cost of replacing common portions, a contingency fund used only for those repairs and replacements.
The board obtains a contingency fund study, prepared under the standards of the regulation adopted by decree 991-2025.
The sums to pay into the fund are set on the basis of the study's recommendations, taking into account the amounts available in the fund.
Until the promoter obtains the study, the sums to pay into the fund must equal 0.5 % of the building's reconstruction value.

The floors that actually exist

1. Transitional floor: 5 % of contributions to common expenses

It applies since August 14, 2025, until the board sets the sums on the basis of the first study (Bill 16, s. 153, para. 2).

Example: for an annual budget of contributions to common expenses of $120,000, the fund must receive at least $6,000 a year during that period, or $500 a month, split according to the relative values of the fractions.

2. Promoter phase: 0.5 % of reconstruction value

Article 1071, para. 4 sets a floor for the period when the promoter has not yet obtained the study: 0.5 % of the building's reconstruction value. The reconstruction value is the one used for the syndicate's property insurance.

Example: for a building with an insured reconstruction value of $12,000,000, the minimum to pay into the fund is $60,000 a year during the promoter phase, about $5,000 a month.

The texts do not say expressly how this promoter-phase floor and the transitional 5 % floor fit together for a syndicate still in the promoter phase since August 14, 2025. In that specific case, get legal advice.

3. Contractual floor: what your declaration of co-ownership says

Some declarations of co-ownership set a threshold of their own: often 5 % of common expenses, sometimes more, sometimes a fixed amount. That threshold applies contractually, on top of the law's rules. It cannot lower the legal minimum, and it does not relieve the board of setting the sums on the basis of the study once the study is obtained.

What changes with the first study

As soon as the study is produced by an authorized professional (OIQ engineer, OAQ architect, OTPQ technologist, OEAQ chartered appraiser or CPA, see « Who can prepare a contingency fund study? »), it quantifies the sums to pay into the fund each year.

From that point:

The board sets the sums on the basis of the study's recommendations, at the latest 30 days after the first annual meeting that follows the study (Bill 16, s. 153, para. 1).
The transitional 5 % floor no longer applies.
If the study shows the fund is insufficient, the board sets the sums so that it is sufficient at the latest 10 years after the first study is obtained (Bill 16, s. 154).

The study must be obtained by August 15, 2028 for existing divided co-ownerships (Bill 16, s. 151, para. 1: « no later than the day following three years » after the regulation came into force). It must then be updated at least every five years.

Why stopping at 5 % is not enough

The 5 % floor is a temporary legal minimum, not an estimate of the need. The logic of the Civil Code and of the regulation adopted by decree 991-2025 is different: the required amount is driven not by a percentage of current expenses but by the inventory of common components, their remaining useful life and their estimated replacement cost over at least 25 years. The study quantifies that need, and for many older buildings it is well above 5 % of common expenses. Sticking to the floor exposes the syndicate to unexpected special assessments.

Key takeaways

The 5 % does exist: it is a transitional statutory floor (Bill 16, s. 153, para. 2), in force since August 14, 2025.
It is not in article 1071 of the Civil Code: the Code's former rule was repealed by Bill 16.
In the promoter phase, article 1071 sets 0.5 % of the reconstruction value.
Once the first study is obtained, the board sets the sums on the basis of its recommendations, and the 5 % floor ends.

To estimate an order of magnitude before hiring a professional, our online calculator applies typical inventory and useful-life parameters and states its assumptions. It is a planning tool, not a substitute for the professional study.