Reserve Fund

Learn what a reserve fund is in Canadian condo ownership—how it’s used, why it’s critical for repairs, and what it means for owners’ financial protection.

Reserve Fund

May 30, 2025


What is a Reserve Fund?

A reserve fund is a savings account held by a condominium corporation or strata that covers major repairs, replacements, and capital expenses for the building and common areas.

Why Do Reserve Funds Matter in Real Estate?

In Canadian real estate, every condo or strata must maintain a reserve fund to ensure long-term maintenance and financial health.



Covered expenses may include:
  • Roof, elevator, or HVAC replacement
  • Garage or facade repairs
  • Safety upgrades or code compliance



Reserve funds are built from monthly condo fees and are assessed through reserve fund studies every few years. A healthy reserve fund protects owners from unexpected special assessments.



Understanding reserve funds helps buyers evaluate condo financial health and assess future risks.

Example of a Reserve Fund in Action

The condo board approves a $250,000 parking garage repair using the reserve fund, avoiding the need for a special assessment.

Key Takeaways

  • Funds long-term condo building repairs.
  • Required by law for condo corporations.
  • Reduces reliance on special assessments.
  • Funded through monthly fees.
  • Reviewed via professional reserve studies.

Related Terms

Additional Terms

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Mortgagee in Possession

A mortgagee in possession is a lender who takes control of a property after borrower default, but before foreclosure or power of sale. The lender. more

Lease Surrender Agreement

A lease surrender agreement is a negotiated contract between a landlord and tenant that ends a lease before its scheduled expiration. Terms may. more

Green Infrastructure

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Escrow Holdback

An escrow holdback is a portion of funds withheld at closing and held in escrow until specific conditions are met, such as completion of repairs,. more

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