Contingency reserve fund
The savings account for big repairs — what has to go in, how ManageStrata projects whether it's enough, and how to close a gap before it becomes a levy.
Your corporation runs two funds and they must not be mixed.
The operating fund pays this year's recurring bills — insurance, landscaping, utilities, management, small repairs.
The contingency reserve fund (CRF) — called a reserve fund outside BC — pays for big, infrequent replacements: the roof, the elevator, the boiler, the parkade membrane.
Keep them separate
Money moves into the reserve fund as a planned contribution and comes out only for what the reserve is for. Paying an operating shortfall out of the reserve solves this month's problem by creating a much larger one later — and in most provinces it is restricted by legislation. ManageStrata accounts for the two funds separately for exactly this reason. See finances overview.
What has to go in
In British Columbia, every budget must include a CRF contribution of at least 10% of the total amount budgeted as the contribution to the operating fund for that year. Since 1 November 2023 this applies regardless of how much is already in the fund — the old rule that let a corporation stop contributing once the CRF passed 25% of operating expenses no longer exists. ManageStrata uses that figure as the floor in its projection, and will flag a budget that falls below it.
Note the base: the budgeted contribution to the operating fund, not total operating expense and not a percentage of the CRF balance.
The minimum is a floor, not a target
Almost no building is adequately funded at the statutory minimum. The number that matters is the one your depreciation report recommends, which is derived from your actual components and their actual remaining life.
In Alberta and Ontario, the required contribution comes from the funding plan adopted with your reserve fund study rather than from a fixed percentage.
The reserve projection
Assets & reserve studyReserve (CRF) projection.
The projection compares three things:
- What your components will need, and when — from your component registry.
- What you're contributing each year.
- What you currently hold in the reserve.
Out of that comes the useful question: does the balance stay positive across the next 20–30 years, or does it go through the floor in year seven?
Current CRF balance
$612,800
Annual need (report)
$96,400
The projection is only as good as the component list
Seed it from your depreciation report rather than typing it from memory. A projection built on three components will look wonderfully healthy and tell you nothing.
Closing a gap
When the projection says you're short, there are four levers, and most councils use a combination.
Raise the annual contribution
The least painful option and the one owners resent least, because it's gradual and predictable. Build it into next year's budget.
Re-time the work
Some components can be maintained rather than replaced, or deferred a few years on professional advice. Deferral is a decision, not a saving — record it as such.
Raise a special levy
A one-off charge to owners for a specific project. Sometimes unavoidable, and much easier to pass when owners have seen the projection first. See special levies.
Borrow
Some corporations finance major work. Understand the total cost and the approval your bylaws and legislation require before going near it.
Recording contributions and spending
Contributions in. Strata fees arrive whole in the operating fund — a fee is billed as one invoice, because that's what a Form B certifies as the lot's monthly fee — so the reserve's share has to be moved across.
FinancesBudgetReserve fund contribution does it a month at a time, once the budget is adopted. It shows what was adopted for the year, how much has moved (out of twelve months), and how much is still to go, so a contribution that stalled in March is visible in April rather than at year end.
An adopted contribution is not a contributed one
Until the transfers are made, the CRF line exists only in the budget document. The projection below, the reserve balance on a Form B, and s.94's question about whether the reserve is adequate are all answered from the fund — not from what the budget said would go into it.
Spending out. Record a reserve expense against the reserve fund, not the operating fund. Link it to the component it relates to where you can — that's what makes the next projection accurate, because a roof replaced this year shouldn't still be counted as due.
What owners should look at
Any owner can see the corporation's compliance status. Two numbers tell most of the story:
- the reserve balance against the recommended contribution level, and
- whether the depreciation report is current.
A healthy reserve with a current report means fewer surprises. A thin reserve with an expired report means an owner should be asking questions at the AGM.
Common questions
Can we spend the reserve on an emergency repair? In BC, yes and with no vote at all — s.98(3) permits immediate expenditure necessary to ensure safety or prevent significant loss or damage, from either fund. Record why it met that test, and revisit the projection afterwards. For non-emergency spending the answer is more precise than "check your Act":
| Situation | Approval needed |
|---|---|
| CRF expenditure, generally | 3/4 vote at an AGM or SGM (s.96(a)) |
| CRF expenditure for repair, maintenance or replacement recommended in your most current depreciation report, for something the corporation is responsible for | Majority vote (s.96(b)) |
| Immediate expenditure necessary to ensure safety or prevent significant loss or damage | No vote — either fund (s.98(3)) |
| Unapproved, non-emergency operating expenditure | Capped at the lesser of $2,000 and 5% of the annual operating-fund contribution (s.98(2)) |
We've never had a reserve — where do we start? Get a depreciation report, see what it says you need, and set a contribution level you can actually sustain. Starting late is common; starting never is what turns into a six-figure levy.
Do we need a separate bank account? In BC, not necessarily. Section 95 requires CRF money to be held in a savings institution in BC (or invested as the regulations permit) and to be accounted for separately from operating money — a single account with separate accounting satisfies the Act. ManageStrata tracks the funds separately either way, which also makes bank reconciliation much easier if you do hold two accounts.
Still stuck? Open Support in the top bar of the app, ask the Assistant, or contact us.