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ARTICLE · 22 JANUARY 2021

When Is Enough, Enough? The Adequacy Of Reserve Funds

Miller Thomson
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The Auditor General of Ontario's recent report, "Value-for-Money Audit: Condominium Oversight in Ontario" (the "AG's Report") outlines a number of issues facing condominium corporations and owners.

CanadaFinance and Banking
Justin McLarty
Justin McLarty
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The Auditor General of Ontario's recent report, "Value-for-Money Audit: Condominium Oversight in Ontario" (the "AG's Report") outlines a number of issues facing condominium corporations and owners. One of these issues is the adequacy of reserve funds, with the AG's Report noting that a whopping 69% of condo's registered in the years 1980 and 2000 did not have sufficient reserve funds.

While this is a small sampling of older condominiums, the AG's Report also noted issues with newer buildings as a result of "fixed rate" reserve fund contributions during the first year. Many of the issues being faced, in our view, are a result of the lack of clarity with respect to what level of funding is "adequate."

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