about reserve fund planners ltd.
Reserve Fund Planners Ltd. is a central Alberta based firm that specializes in reserve fund planning services.
Our clients are condominium and strata corporations, property developers, and forward-thinking real property owners who recognize the value of having a long-range capital spending plan.
Founded in 2001, our firm has provided reserve fund studies and depreciation reports for hundreds of condominiums and property owners throughout Alberta, and in areas of British Columbia and Saskatchewan.
Reserve Fund Planners Ltd. has a broad range of experience and education and our firm continues to invest in ongoing courses and training in areas such as reserve fund planning, property inspection, and financial planning. All of our planners hold the Certified Reserve Planner (CRP) designation from the Real Estate Institute of Canada. The CRP designation is the preeminent national designation signifying professionals with the expertise to complete reserve fund studies and depreciation reports for condominiums, institutions, corporations and government entities.
Reserve Fund Planners Ltd. carries professional errors & omissions insurance, commercial general liability, and WCB.
New Reserve Fund Study
We visit your property and conduct a physical review of the common and managed assets of the Condominium.
A customized and detailed reserve fund study, report, and plan are prepared. In addition to meeting or exceeding the minimum requirements of the applicable Provincial legislation, we take great pride in the feedback we receive from our clients that our studies and reports are easy to read and understand. We provide you with the information you need to make informed decisions regarding the management of your property - nothing more, nothing less.
Once you've had a chance to review the study, we work with you to ensure your questions are answered and that you have the knowledge and tools to effectively manage your reserve fund.
Reserve Fund Plan Updates
New reserve fund studies are required every five years in Alberta, however, as a Board, your reserve fund plan should be reviewed annually to ensure that the underlying assumptions are still valid.
Your updated plan will be revised to include current (local and global) economic conditions and investment returns, as well as, current repair and replacement pricing. Your plan will also be adjusted to account for any significant warranty or insurance claims made at your property.
The plan update can be done with or without a site review. We find most clients opt for a plan update, without a site review, at the 3-year mark.
What is the difference between a reserve fund study, a reserve fund report, and a reserve fund plan?
The study is a written description of the depreciating assets of the Condominium that will require major repair or replacement within 25 years. The study should detail the chronological age of each asset, the expected lifespan of each asset (under normal conditions), the current condition of each asset, and an estimate of the cost to repair or replace each asset. The study also lays out a long-term budget showing how much cash will be required, and when, and what level of contributions will be required for the fund to remain solvent.
The report is the signed report submitted to the Condominium Board once the study has been completed. The report outlines the findings of the study, the qualifications of the study preparer, the relationship of the preparer with the Condominium Corporation, as well as any other matters the preparer feels is relevant to the Board. When most people refer to a "reserve fund study", they are in fact referring to both the study and report.
The plan is effectively a 25-year capital spending budget document. A reserve fund planner will typically recommend one or two plans to ensure the reserve fund is adequately funded, however, the Condominium Board is ultimately the party who decides what funding strategy the Condominium adopts. As per Section 23(4) of the Alberta Condominium Property Regulation, the Board "must, after reviewing the reserve fund report, approve a reserve fund plan setting forth the method of and amounts needed for funding and maintaining the reserve fund."
To put the whole thing in chronological order:
- The reserve fund planner prepares a written study of the depreciating assets of the Condominium,
- The planner prepares a written report outlining the findings of the study and submits the document package to the Board,
- The Board, after reviewing the study and report, passes a motion adopting a plan to ensure the Condominium's reserve fund is adequately funded.
How do you decide what items are included in the reserve fund study, and which are left for the day-to-day operating budget?
Two things guide us here. The Alberta Condominium Property Act refers to "...major repair and replacement... that does not normally occur annually." So grass cutting, snow shoveling, light bulb replacement, and the like are not included because we know that they will be needed every year. Second, we deal with the word "major". Here we consider the size of the expenditure relative to the overall budget of the Condominium. For instance, the replacement of a number of precast paving stones at a total cost of $800 would be a major expense for a four-plex and should be included in the reserve fund calculations, whereas the same work carried out at a 100-unit apartment building would be considered too small to bother going into the reserve fund.
What are the penalties for not having a reserve fund study done?
The penalties are only those inflicted by the marketplace. There are no "Condo Cops" checking on condominium corporations, however there are a growing number of knowledgeable real estate agents and lawyers who are asking questions on behalf of their clients. Far more effective than any governmental enforcement agency is the anger of an owner who can't sell his unit because the Condominium's Board has not commissioned a proper reserve fund or has not adopted an adequate reserve fund plan.
Who can perform/prepare reserve fund studies?
In Alberta, the Condominium Property Act refers to a "qualified person", as defined by Regulation 21(1)(c). In cases of properties with not more than 12 units, the Condominium Corporation may elect (by special resolution) to carry out the functions of a "qualified person" and prepare their own study.
We're excited to put our enthusiasm and expertise to work for you.
Please give us a call at (403) 348-5444 or send us a note below.