Condo Board 101: What a Reserve Fund Study Is and Why Your Board Needs One

If you sit on a condo board, at some point a property manager or the corporation's engineer will bring up a "reserve fund study" and ask the board to approve a budget for it. It's easy to nod along and approve the invoice without fully understanding what you're paying for. This is meant to change that.

You didn't run for the board to become a facilities expert, and this document assumes you aren't one.

What a reserve fund study actually is

Every condo building has major shared components that wear out on a predictable, if long, timeline: the roof, the elevators, the parking garage structure, the building envelope (the walls, windows, and waterproofing that keep water out), mechanical systems, and life-safety equipment like fire alarms and sprinklers.

A reserve fund study is an independent engineering assessment of all of those components. A licensed engineer (or a reserve-fund specialist firm) inspects the building, reviews maintenance and repair history, and produces a report that answers three questions for each component:

1. What condition is it in right now?
2. How many years of useful life does it have left?
3. How much will it cost to repair or replace, and when?

That report then feeds into a funding plan: a projection of how much money the corporation needs to be setting aside each year, in the reserve fund, to pay for those future repairs without a surprise special assessment landing on every owner at once.

Why your board has to do this

In most jurisdictions this isn't optional. Ontario requires a reserve fund study under the Condominium Act (O. Reg. 48/01), typically renewed every few years. Florida, in the wake of the 2021 Champlain Towers South collapse in Surfside, now requires milestone structural inspections and Structural Integrity Reserve Studies (SIRS) under SB 4-D for buildings three storeys and up, with specific timelines tied to a building's age and location. Other states and provinces have tightened similar rules or are actively considering it. The details differ by jurisdiction (always confirm the current requirement with the corporation's counsel or engineer), but the direction is the same everywhere: regulators no longer treat "the board will figure it out eventually" as an acceptable answer for structural and life-safety maintenance.

Beyond the legal requirement, a board has a fiduciary duty to the owners it represents. Underfunding the reserve isn't a victimless shortcut: it just moves the bill from "steady, predictable annual contributions" to "one enormous special assessment the year the roof actually fails," and it's often the newer owners, who didn't benefit from years of underpayment, who get hit hardest.

What good questions from a board member sound like

You don't need to evaluate the engineering yourself, but you should be asking the property manager and the engineer:

• Is our funding plan based on this building's actual maintenance history, or on generic assumptions? A study built on a thin or missing maintenance record has to assume the worst about remaining useful life, which usually means higher required contributions than the building might actually need.
• What happened to the recommendations from the last study? If the last report flagged a repair as "due within 3 years" and it's now year 5, ask why, and ask what that delay does to the cost and urgency now.
• Do we have a documented record of vendor work, or is it institutional memory? If your property manager has changed in the last few years, ask directly whether the asset records survived that transition.

What belo does for your board

The single biggest risk to a good reserve fund study is a gap in the record: a repair nobody can prove happened, a vendor invoice nobody can find, a PM transition where the file didn't fully come along. belo exists to close that gap: it keeps a continuous, dated, audit-ready record of every asset, every repair, and every vendor for your building, so that when the next study is due, your board isn't relying on memory or a shared drive. It has an actual record to hand the engineer, and a materially stronger position to negotiate the funding plan from.

If your board is heading into a study cycle and wants to understand what a continuous asset record looks like, reach out. We're onboarding pilot properties across Ontario, Florida, New York, and New Jersey now.

This is general information, not legal advice. Reserve fund study requirements vary by jurisdiction and change over time. Confirm current obligations with your corporation's legal counsel or engineer.