You have until August 14, 2028 to complete your first contingency fund study under Bill 16. While this may seem far away, syndicates should start planning now. Here's everything you need to know.
What is a Contingency Fund Study?
A contingency fund study (étude du fonds de prévoyance) is a professional assessment that:
- Evaluates all major building components and their remaining lifespan
- Estimates repair and replacement costs over a minimum of 25 years
- Recommends annual contribution levels to ensure adequate funding
- Provides a capital planning roadmap for the syndicate
Why is This Important?
Under Bill 16, contributions to the contingency fund can no longer be set arbitrarily. They must follow the recommendations of a professional contingency fund study.
This means:
- No more guessing at contribution amounts
- Better financial planning for major repairs
- Transparency for co-owners about future costs
- Compliance with legal requirements
Who Can Prepare the Study?
The study must be prepared by a qualified professional from:
- OIQ - Ordre des ingénieurs du Québec
- OEAQ - Ordre des évaluateurs agréés du Québec
- OAQ - Ordre des architectes du Québec
- OTPQ - Ordre des technologues professionnels du Québec
- CPA - Ordre des comptables professionnels agréés du Québec
Ongoing Requirements
Once you have your first study:
- Update every 5 years with a new professional study
- Follow the recommendations for annual contributions
- Disclose compliance status in syndicate certificates for unit sales
- Report to co-owners at annual general meetings
Why You Shouldn't Wait
Even though the deadline is August 2028, here's why you should act now:
- Qualified professionals will be in high demand as the deadline approaches
- Costs may increase due to supply and demand
- Earlier studies give you more time to adjust contribution levels gradually
- Buyers are already asking about contingency fund compliance
What the Study Includes
A typical contingency fund study covers:
- Building envelope - Roof, windows, siding, balconies
- Mechanical systems - HVAC, plumbing, elevators
- Electrical systems - Main panels, common area lighting
- Common areas - Lobbies, hallways, parking structures
- Site elements - Landscaping, paving, drainage
Financial Impact
Be prepared for potential contribution increases. Many syndicates have been underfunding their contingency funds for years. The study may reveal that:
- Current contributions are insufficient
- Special assessments may be needed for immediate repairs
- Gradual increases are required to catch up
Action Steps
- Discuss at your next board meeting - Put contingency fund study on the agenda
- Get quotes from qualified professionals - Start gathering estimates
- Budget for the study cost - Typically $3,000 to $15,000+ depending on building size
- Communicate with co-owners - Explain the requirement and timeline
- Plan for contribution adjustments - Start preparing owners for potential increases
Resources
Don't wait for 2028. Start your contingency fund study planning today to ensure your syndicate is compliant and financially prepared for the future.
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