Reserve Fund Study (Law 16)

A reserve fund study (also known as contingency fund) is a financial analysis of a multi-residential dwellings current and forecasted reserve fund. This study ensures that the annual contributions will allow for future generations of co-owners to not be the only ones to endure the financial burden of the replacement of major building components and code compliances.

Our opinion on the annual contributions to the reserve fund is based on the estimated life expectancies of common components and the effects of interest rates and inflation. Because of the number of factors that can influence the annual contribution required, we recommend that the study of contingency funds to be reviewed annually and updated at least every five (5) years.

The expected cost and schedule of work that will be required is evaluated over the next 25 years.

The logbook is an essential tool to help ensure the longevity of the building and to help maintain the value of the building. It is in essence a register tracing the building history, as well as a register of all the operations already carried out or forthcoming thereon.

This logbook has several uses:

• It allows you to organize the schedule of the various work to be carried out.
• It helps ensure professionalism to future buyers.
• It helps create good communication between the various successive co-ownership committees.

The logbook makes it possible to organize all of the maintenance work on the building, whether regular maintenance (snow removal, landscaping, maintenance household, etc.) or the most important work (roof maintenance, plumbing, electricity, etc.). It lists all the work that has been done and that needs to be done over the next few months or years.

In addition, it should also contain:

• The maintenance manuals, kept up to date and addressing the true needs of the building and of the equipment, systems and building components;
• The equipment and systems ‘contractual guarantees;
• References to the maintenance and upkeep contracts of common equipment, along with their expiry date;
• The maintenance strategy and planning, as well as its history and follow-up.

The logbook is an excellent basis for people who come to perform the valuations for your contingency/reserve fund necessary for your co-ownership. Predicting what will happen allows you to better distribute the work and expenses that necessarily go with it.