A Reminder About Reserve Funds and Status Certificates
If a condominium corporation is aware of any circumstances that may result in an increase in the common expenses (that is, an increase beyond inflation), this must be disclosed in Paragraph 12 of the status certificates. Therefore, something may need to be mentioned in Paragraph 12 of the status certificates if it appears that contributions to the reserve fund may need to increase (beyond inflation).
For example, some features of the common elements may not be covered by the reserve fund study; such as, if those features won’t require replacement until after the reserve fund study period. If so, I recommend that the condominium corporation give careful consideration to the following: Is it possible that the annual contributions to the reserve fund will need to increase when those features “come into the study period” at some time in the future? If so, this may need to be mentioned now in Paragraph 12 of the status certificates.
As mentioned in my blog post last November, the reserve fund study period (currently required to be “at least 30 years”) is also expected to be increased, likely to “at least 45 years”, as part of the anticipated amendments to the Condominium Act and Regulations. Depending upon the particular condominium, this may mean that features not currently covered by the reserve fund study will be covered (if and when the study period increases to at least 45 years). Again, if this could result in an increase in the annual reserve fund contributions, this may need to be mentioned now in Paragraph 12 of the status certificates.