A reserve fund study is an engineering and financial document, but what follows it is a board job with three fixed deadlines. Most of the search results for the Notice of Future Funding are the blank form. This guide explains what the board has to do with it, in order.
What is the reserve fund for?
Every Ontario condominium corporation must "establish and maintain one or more reserve funds" (Condominium Act, 1998, s. 93 (1)). A reserve fund may be used "solely for the purpose of major repair and replacement of the common elements and assets of the corporation" (s. 93 (2)). The owners pay into it as part of their contributions to the common expenses (s. 93 (4)), and the board does not need the owners' consent to spend from it for that purpose (s. 95 (2)).
Until the first study and its funding plan are in place, the contributions must be at least 10 per cent of the budgeted common expenses excluding the reserve fund (s. 93 (5)). After that, the contributions are whatever is reasonably expected to cover major repair and replacement, based on expected costs and life expectancy (s. 93 (6)).
How often is a reserve fund study required?
A newly created corporation does a comprehensive study within the year after its declaration and description are registered (Act, s. 94 (4); O. Reg. 48/01, s. 31 (2)). After that, a study is due "within every three years after completing the immediately preceding reserve fund study" (O. Reg. 48/01, s. 31 (3)).
There are three classes of study (s. 28), and they rotate (s. 31 (4)):
| The previous study was | The next study may be |
|---|---|
| Comprehensive, or an update based on a site inspection | An update not based on a site inspection, or a comprehensive study |
| An update not based on a site inspection | An update based on a site inspection, or a comprehensive study |
So a comprehensive study is not required every three years, and a desk update is never allowed twice in a row.
Who can do the study?
The study must be done by a member of one of eight professional classes, including professional engineers, architects, certified engineering technologists, certified reserve planners and professional quantity surveyors (O. Reg. 48/01, s. 32 (1)). That person cannot be a director, officer or property manager of the corporation, an owner, a person living on the property, or a spouse or child of a director or officer (s. 32 (2)). They must carry errors-and-omissions insurance of at least $1 million per occurrence (s. 32 (4)).
The cost of the study is a common expense that the board may charge to the reserve fund (Act, s. 94 (7)).
What is in the study?
A physical analysis and a financial analysis (O. Reg. 48/01, s. 29 (1)). The physical analysis is a component inventory of every item expected to need major repair or replacement within at least 30 years where the replacement cost is not less than $500, with its age, life expectancy and estimated cost (ss. 27 and 29 (2)). The financial analysis includes "a recommended funding plan projected over a period of at least 30 consecutive years", year by year, with opening balance, contributions, inflation-adjusted expenditures, interest and closing balance (s. 29 (3)).
The three deadlines after the study arrives
| Step | Deadline | Source |
|---|---|---|
| Review the study and propose a funding plan | Within 120 days of receiving the study | Act, s. 94 (8) |
| Send the Notice of Future Funding to owners, and the study, plan and notice to the auditor | Within 15 days of proposing the plan | Act, s. 94 (9) |
| Implement the plan | After 30 days following the day the board sent them | Act, s. 94 (10) |
The plan must ensure that, within the prescribed period, the fund will be adequate for its purpose (s. 94 (8)). For most corporations that period is "the fiscal year of the corporation following the fiscal year in which the reserve fund study is completed" (O. Reg. 48/01, s. 33 (1)); subsection 33 (2) keeps a longer period for some older corporations.
Section 94 does not require an owners' vote on the plan. The board proposes it, tells the owners, and implements it.
What goes in the Notice of Future Funding?
The notice summarizes the study, summarizes the proposed plan, and states where the plan differs from the study (Act, s. 94 (9) (a)). It must be on the form specified by the Condominium Authority of Ontario (O. Reg. 48/01, s. 33 (3)). That form includes (s. 33 (4)):
- which owners are entitled to the notice, and a statement that the board has reviewed the study;
- the class of study, who conducted it and when it was completed;
- a "Cash Flow Table" covering at least 30 years, with for each year the opening balance, the recommended annual contribution, the inflation-adjusted expenditures, the interest, the percentage increase in the contribution and the closing balance;
- how the corporation has made the study available for examination;
- the signature of the person signing for the corporation, and the date.
Keep the study and the plan permanently: they are corporate records (Act, s. 55 (1), para. 7) that must be retained at all times (O. Reg. 48/01, s. 13.1 (2), para. 2).
How does this show up later in the year?
The next periodic information certificate must state the reserve fund balance, the contribution and expenditures planned for the year, and the current plan to increase the fund (O. Reg. 48/01, s. 11.1 (1) (m)). The contribution set by the plan becomes part of what each owner owes, which is where arrears and the condo lien come in when it is not paid.
A worked timeline
A board receives a comprehensive study on February 1.
- By June 1 (120 days, in a year with no February 29), it reviews the study and proposes a funding plan at a board meeting, recorded in the minutes.
- Within 15 days of that proposal, it sends the Notice of Future Funding to the owners and the study, plan and notice to the auditor.
- Thirty days after sending them, it implements the plan, typically through the next budget's reserve fund contribution.
- The next study, an update not based on a site inspection, is due within three years of the day this one was completed.
For the board's other recurring deadlines, see running a self-managed condo corporation in Ontario.
Sources
- Condominium Act, 1998, S.O. 1998, c. 19, ss. 55 (1), 93, 94 and 95.
- O. Reg. 48/01 (General), ss. 11.1 (1) (m), 13.1 (2) and 27 to 33.
- Condominium Authority of Ontario, Notice of Future Funding of the Reserve Fund (prescribed form).
This guide summarizes the Condominium Act, 1998 and its regulations as of October 21, 2026. It is general information, not legal advice. For a decision about your corporation, consult an Ontario condominium lawyer.