Report

Report on Reserve Fund Survey Findings

A reserve fund is a crucial financial tool designed to cover the cost of major repairs and replacements of common elements and assets within a condominium corporation.

This report provides initial key insights into the state of reserve funds across Ontario’s condos and highlights trends in inflation, contributions and owner awareness that can be used to guide future planning and support.

On this page

Introduction
Methodology
Summary of Key Insights and Next Steps

Introduction

The CAO is committed to promoting the financial health and sustainability of condo communities across the province.

A key requirement of condo board governance under the Condo Act is ensuring that the reserve fund is adequately funded.

In 2023, the CAO conducted two surveys aimed at gathering initial data on the state of reserve funds and how aware of them condo owners and boards were. This report outlines these results and provides insights into how condo corporations are planning for future expenditures.

This is a first step for the CAO and a first for Ontario, and is intended to add to the ongoing important discussion about reserve funds across many jurisdictions all over the world.

The data collected aligns with what we hear about the efforts of condo corporations and owners to set aside adequate funds to preserve properties and ensure the safety and security for residents.

This report provides solid evidence of key areas of focus while also opening opportunities for further study that will address current limitations related to drawing from different data sources, sample size and diversity, as well as an abnormally high inflationary period during the time the surveys were conducted.

1

Methodology

Two CAO Reserve Fund Surveys were distributed to over 12,000 condo corporations and condo owners throughout Ontario in April of 2023.

Seven hundred corporations and nearly 6,000 condo owners responded. The data collected provides valuable insights into inflation trends, reserve fund contributions, and the funding strategies used by condo corporations.

2

Summary of Key Insights and Next Steps

Key Insights:

Increases to common expenses appear to be on the rise.

In 2021, nine per cent of respondent corporations increased common expenses by ten per cent or more whereas 16 per cent of them did the same in the first five months of 2023.

Use of special assessments may be increasing.

Sixteen percent of respondent condo corporations reported issuing a special assessment between 2018 and 2023. Nearly six percent did so in 2022 and 4.7 per cent did it in the first five months of 2023.

Condo board directors are familiar with reserve funds.

All current or former director respondents reported being very, somewhat, or slightly familiar with reserve funds compared to 95 per cent of non-director owners.

Unit owner awareness of notices is lagging.

Over 90 per cent of current or former director respondents were very, somewhat, or slightly familiar with key reserve fund notices compared to only 70 per cent of non-director owners.

Next Steps:

These initial results confirm the need for robust reserve fund planning and CAO consumer protection initiatives that will enhance owner education and support for condo boards.

The CAO is committed to enhancing its educational materials, improving our data collection and reporting on reserve funds to further support the condo sector, including thorough:

Updates and enhancements to the CAO Guide on Condo Reserve Funds.

Enhanced director training materials to cover reserve fund management in greater depth.

Exploring research partnerships to bolster our research capacity and enhance data collection.

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