Often, several co-owners ask us what is the amount for the contingency fund. Our response to their questions is:
First, it is important to assess the condition of the building and to review the financial results of the Union. The contingency fund should provide for a minimum of 30 years of funding to carry out maintenance and repair in the co-owners’ building. The term maintenance booklet is often used. This maintenance booklet covers medium and long-term expenses (10 to 30 years), such as roofing, doors and windows, caulking, etc. Each building is unique, hence the importance of establishing the percentage to the contingency fund.
The Civil Code of Quebec, section 1072, says; The board of directors shall, after consulting the meeting of the co-owners, determine the contribution of the latter to the common expenses, after having determined the sums necessary to meet the expenses arising from the co-ownership and operation of the building and the sums payable to the contingency fund. The contribution of the co-owners to the contingency fund is at least 5% of their contribution to the common expenses. The respective rights of the co-owners to the common areas for restricted use may be taken into account in establishing it.
In several declarations of condominiums, the contribution to the contingency fund can be read at least 5%, but if more than 10%, the board of directors, after consultation with the meeting of co-owners, the common expenses are established.
Unfortunately, many see only the figure and percentage of article 1072, but this article says “after having determined the sums necessary to meet the common expenses and the sums to be paid into the contingency fund. Therefore, an estimate of short, medium and long-term costs is required. If everything is done well with a maintenance book this will minimize the risk of several extraordinary contributions that had not been properly evaluated from the beginning.
The Management Team Gestion Condo duCoproprio