Investing the Contingency Reserve Fund: What a BC Strata May Hold

Your strata has built up a healthy contingency reserve fund over the years, and it is all sitting in a chequing account at the branch down the street, earning close to nothing. Someone at the AGM asks why, and nobody on council can say — not because the answer is embarrassing, but because the decision was never made, only inherited. That is the quiet gap: the money is visible, but the thinking behind where it sits was never written down. This post sets out what the Act and Regulation actually permit a BC strata to hold, who the rules say decides, and the one time the fund may lend to the operating fund.

Start with the two rules that frame everything

Under section 95 of the Strata Property Act, a strata corporation must:

• account for CRF money separately from its other money, and
• invest all of the money in the CRF in either the investments permitted by the regulations, insured accounts with savings institutions in British Columbia, or a combination of the two.

Two things follow. First, "all of the money" is not optional language — the fund is meant to be held somewhere, not left undirected. Second, an insured BC account is itself a permitted place to hold it, so a council that keeps the CRF in an insured savings account is complying with s.95; it is simply choosing the most conservative option available.

Any interest or income earned on CRF money becomes part of the fund (s.95(3)). It does not flow to the operating fund and it does not reduce next year's minimum contribution on its own. For how the fund is built in the first place, see our complete guide to the strata contingency reserve fund.

What the Regulation permits beyond an insured BC account

Regulation section 6.11 lists the additional investments available for CRF money — and, on the same terms, for money collected on a special levy. In summary, a strata may also hold:

• A savings or chequing account at a financial institution outside BC, where all or part of the deposit is eligible to be insured by the Canada Deposit Insurance Corporation.
• A term deposit or GIC, where all or part of it is eligible for CDIC insurance or a guarantee from the Credit Union Deposit Insurance Corporation of British Columbia, and it carries a predetermined rate or rates of interest.
• A Government of Canada treasury bill.
• Bonds, debentures or other evidence of indebtedness issued or guaranteed by the government of Canada or a province, or issued by a corporation incorporated under the laws of Canada or a province — but only where, at purchase, the remaining term to maturity is 5 years or less, interest and principal are payable in Canadian dollars, and it is rated A or higher by DBRS Limited.
• A fixed income exchange-traded fund traded on an exchange in Canada, where at purchase the portfolio holds only bonds, debentures and other evidence of indebtedness, the holdings are denominated in Canadian dollars, the average remaining term to maturity is 5 years or less, and 98% or more of the value of the holdings is rated BBB or higher as reported by the fund's issuer.

Read the list for what it excludes as much as what it allows: no equities, no foreign-currency holdings, no long-dated paper. The strata GIC is popular for a reason — it fits the Regulation's conditions cleanly and the maturity date is knowable.

Questions councils ask

Does investing the CRF need an owners' vote?
The Act sets vote thresholds for spending from the fund, not for where it is held. Section 96 requires a majority vote for the listed items — obtaining a depreciation report under s.94, repair, maintenance or replacement recommended in the most current depreciation report, EV charging infrastructure work and the related reports — and a 3/4 vote for any other CRF expenditure. Moving money into a permitted investment keeps it in the fund rather than spending it. The Act does not name a threshold for that choice, so check your own registered bylaws for anything your strata has added, and record the decision in council minutes either way.

Can we lock money away in a 5-year GIC?
That is a judgment call, not a rule. The Regulation permits the instrument; whether it suits you depends on when your depreciation report says the roof, the boiler or the envelope work is coming. Nothing in the Act requires a laddered maturity schedule — it is simply how many councils avoid breaking a term deposit early.

Can the CRF lend money to the operating fund?
Yes, within narrow limits. Regulation s.6.3 permits a loan only where it covers a temporary operating shortage caused by expenses falling due before the budgeted monthly contributions have been collected, and it is repaid by the end of that fiscal year. The strata must inform owners of the amount and purpose as soon as feasible.

Tie the holdings to the plan, not to the calendar

The CRF exists for common expenses that usually occur less often than once a year, or not usually at all (s.92). Your annual contribution must be at least 10% of the total budgeted operating-fund contribution and, other than in the year following the first AGM, must be determined after considering the most recent depreciation report (Regulation s.6.1). That report is also the natural input to maturity planning — it is the document that tells you which year you will need cash. Councils building this into the numbers will find our guides to preparing a strata annual budget and how strata fees work in BC useful. If your report runs to hundreds of pages, SearchStrata can help a council pull the timing and cost estimates out of it with AI analysis.

Also keep s.98 in mind: where there are reasonable grounds to believe an immediate expenditure is necessary to ensure safety or prevent significant loss or damage, the strata may spend from either fund without approval. Money the corporation cannot reach quickly is money that cannot answer that moment.

What a healthy strata does ahead of time

• Writes down where the CRF is held, in what instrument, and when it matures — in the minutes and in the financial statements, not just in the treasurer's head.
• Reviews the holdings against the depreciation report each budget cycle, so maturities land near the work.
• Keeps the fund accounted for separately and shows owners the interest it earned, since that interest belongs to the fund.
• Confirms any investment against the current text of Regulation s.6.11 before purchase, and asks the strata's accountant or financial institution to confirm the instrument meets the conditions.

None of that survives a change of treasurer or manager unless it lives with the corporation. ManageStrata exists for that reason: the council or management company can change, but the minutes, votes and books stay with the strata, and council can export a full copy at any time.

This article is general information about BC strata law, not legal advice; verify against the current Strata Property Act and Regulation or consult a BC strata lawyer.