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

No. The current text of article 1071 of the Civil Code does not set a 5 % of common expenses threshold. The figure circulates widely because it was the default rule in many declarations of co-ownership and in older regulations; it has no general statutory status today.

What minimum rule does article 1071 actually set?

Until the promoter has obtained the contingency fund study, contributions to the fund must equal 0.5 % of the building's reconstruction value. For co-ownerships past the promoter phase, the study's recommendations apply.

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

Then it is a contractual floor specific to your syndicate: it applies because the declaration provides for it, not because the law requires it. You can keep it, but it must give way to the higher amount recommended by the contingency fund study.

When does the contingency fund study replace these floors?

As soon as the study is produced by an authorized professional, its recommendations set the amount to contribute to the fund. The obligation to obtain the study fully comes into force on August 14, 2028 for existing co-ownerships.

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

The « 5 % of common expenses » figure keeps coming up in board meetings and in articles about Bill 16. But when you open the Civil Code of Québec at article 1071, that percentage is not there. Here is the precise reading.

What article 1071 actually says

In its current consolidated form (as amended by 2019, c. 28 and 2024, c. 2), article 1071 provides that:

The syndicate establishes a contingency fund, sized to the estimated cost of major repairs and replacement of common elements, allocated exclusively to those repairs and replacements.
The board of directors obtains a contingency fund study, prepared under standards set by a government regulation (the regulation adopted by decree 991-2025).
Contributions to the fund are set on the basis of the study's recommendations, taking into account the evolution of the co-ownership.
Until the promoter has obtained the study, contributions to the fund must equal 0.5 % of the building's reconstruction value.

There is no reference to a « 5 % of common expenses » threshold anywhere in this version of the article.

So where does the 5 % figure come from?

Three sources explain why the number persists:

Older declarations of co-ownership — many syndicates adopted, in their declaration, a contractual floor of 5 % of common expenses. That floor is private to each syndicate and survives until the declaration is amended.
Older management practices — before Bill 16, the 5 % was a common rule of thumb used by managers and accountants for « prudent » budgets.
Confusion with other percentages — the 0.5 % of reconstruction value of the promoter phase, and certain charge thresholds in municipal regulations, have fed the myth.

The result: a figure frequently cited as if it were written into article 1071, when it is not.

The two floors that actually exist

1. Statutory floor: promoter phase — 0.5 % of reconstruction value

Article 1071 sets a floor for the period during which the promoter still controls the syndicate: 0.5 % of the building's reconstruction value. Reconstruction value is the one used for the syndicate's building insurance.

Example: for a building with an insured reconstruction value of $12,000,000, the minimum contribution to the fund is $60,000 per year during the promoter phase — about $5,000/month, allocated by fractional shares.

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

If your syndicate's declaration of co-ownership sets a threshold — typically 5 % of common expenses, sometimes 10 %, sometimes an absolute amount — that floor applies contractually. Check the section of your declaration on the contingency fund or on contributions.

This floor can be amended by amending the declaration of co-ownership (procedure varies between declarations), but it continues to apply until it is amended.

How the contingency fund study changes the picture

Once 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 calculates the required balance at the beginning of each year and the annual contributions.

From that moment:

The study's recommendations replace the general floors.
If the declaration sets a contractual floor lower than the study, the study applies (the contractual floor becomes inoperative for the « insufficient » portion).
If the declaration sets a contractual floor higher than the study, the contractual floor continues to apply (the declaration prevails).

The study must be obtained by August 14, 2028 for existing divided co-ownerships (Decree 991-2025, transitional provisions).

Why the 5 % myth is dangerous

As long as people believe 5 % of common expenses is « the » rule, the fund is almost always underfunded. The logic of the Civil Code and the regulation adopted by decree 991-2025 is different: it is not a percentage of current expenses that determines the required amount, but the inventory of common elements, their remaining useful life, and their estimated replacement cost over 25 years. The study quantifies that need.

For most Quebec co-ownerships built between 1980 and 2000, the first studies produced since 2019 reveal required contributions well above 5 % of common expenses. Sticking to 5 % exposes the syndicate to surprise special assessments and to unit-price discounts at resale.

Takeaways

Article 1071 of the Civil Code does not set a general statutory threshold of 5 % of common expenses.
The only quantified statutory floor is 0.5 % of reconstruction value, applicable during the promoter phase.
The « 5 % » figure you see circulating comes either from a declaration of co-ownership or from an older practice: it is a benchmark, not a legal norm.
Once the contingency fund study is produced, its recommendations take over — and they almost always exceed the older floors.

For a preliminary order-of-magnitude estimate before mandating a professional, our online calculator applies typical inventory and useful-life parameters. It is a planning tool, not a substitute for the professional study.