Encyclopedia
Contingency reserve fund (CRF)
A strata corporation's savings for repairs and replacements that happen less than once a year.
For example: A buyer of a commercial strata unit checks the CRF balance against the depreciation report to see whether special levies are likely. (Illustration only, not a real deal.)
Official source: Strata Property Act (BC Laws)
Example only, not a real client. Say you compare two strata warehouse units at similar prices. One strata has a healthy reserve fund and recently replaced its roof. The other has little saved, an old roof and a depreciation report warning of costs ahead. You factor in the likely special levies and choose the first.
What I’d tell a friend
Check a strata’s reserve fund against the age and condition of the building before you buy. A low fee can mean a low fund.
Why it matters to you
A thin fund means the next roof or elevator will probably be paid for with a special levy. Check the balance and the depreciation report before you buy.
How to use it in your deal
Buyers should review the CRF balance in the Form B and financial statements, compare it with the depreciation report, and look for planned work and special levies. A low CRF with big upcoming repairs means special levies are likely. Owners should support realistic contributions in the annual budget, since underfunding just shifts costs to future owners.
Spending from the CRF usually needs owner approval, except for emergencies. Councils should follow the depreciation report. Ask the strata manager about plans to build the fund. In a commercial strata, owners often have businesses to fund and may vote against contributions, which looks cheap now and costs more later. Compare the CRF with the size and age of the complex rather than just the dollar figure.
Lenders and insurers may ask about it too. Read the last few budgets to see whether contributions rise steadily or jump around, which tells you how the council plans.
Mistakes I see
Ignoring CRF levels. Assuming no levies. Underfunding.
In BC and Vancouver
The Strata Property Act and regulations set CRF rules.
Official sources: Strata Property Act (BC Laws) · Strata housing (Government of BC)
What it is
A contingency reserve fund is money a strata corporation sets aside for repairs and replacements that come up only occasionally, such as roofs, paving, elevators and mechanical systems.
Owners contribute through their strata fees. BC rules set some requirements for contributions, so check current details with your lawyer or strata manager.
Why it matters
A small fund with large repairs ahead makes special levies more likely, which raises your true cost of owning.
Read the depreciation report, recent financial statements and minutes together. They show how the fund compares with planned costs and how the owners make decisions.
Questions to ask before you sign
- What's the CRF balance?
- What repairs are coming?
- Are levies likely?
- What does the depreciation report say?
Keep reading
Related terms: Depreciation report, Special levy, Form B
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General information for British Columbia only. It isn’t legal, tax, accounting or financial advice, laws and rates change, and reading it doesn’t make you my client. Any numbers or scenarios are hypothetical. Check the linked official source and talk to a lawyer, accountant or other qualified professional before you act or sign anything. See the terms and disclaimer.