Definition : Contingency fund

Fund dedicated for major repairs and replacements of the common portions of the immovable, distinct from their regular maintenance. This fund should not be used to pay for day to day maintenance. Its aim is to anticipate the long-term financing needs of major work on the common portions, which require a large investment, by staggering them over time. It is for the board of directors, after consultation with the general meeting of the co-owners, to determine the estimated cost of these expenses and the amounts to be paid into the contingency fund.

WARNING ! Only one contingency fund per  divided co-ownership must be constituted. However, it may, as provided for in article 1064 of the Civil code of Quebec, be subdivided to take into account, in establishing the contribution to the contingency fund, the respective rights of the co-owners on the common portions for restricted use. 

Related articles

{alt}
lock
You need to have an account to read this article

15/12/2024

Why does the contingency fund exclude work on private portions?

As the president of a horizontal co-ownership, I have noticed confusion among co-owners. They believe that the contingency fund can cover work on private portions, such as roofs, windows, or exterior cladding. However, under the Civil Code of Québec, this fund must be used exclusively for common portions. Question :…...

Work
{alt}
lock
You need to have an account to read this article

09/08/2022

Contingency Fund : Can I be reimbursed ?

Question:  We have accumulated significant sums for the repair of the roof, which is to take place in ten years. As part of the sale of my apartment, can I ask the buyer or the syndicate for a refund of the contributions I have paid to the contingency fund?...

Purchase
lock
You need to have an account to read this article

18/11/2024

Which scenario should be prioritized after a contingency fund study: status quo or the professional's recommendations?

A study of the contingency fund was recently conducted by a professional. This analysis highlighted two possible scenarios: 1. Scenario 1 (status quo): This scenario, which is not recommended by the professional, would maintain the current contributions but would result in a deficit within approximately fifteen years, requiring the use…...

Work

17/09/2024

Common expenses

Before buying the apartment of your dreams, find out about the status of the common expenses associated with it, especially those that may have remained unpaid by the seller. Common expenses, better known as " condo fees", which you will have to pay once you become a homeowner, are an essential…...

Purchase

17/09/2024

Financial documentation

When you buy a unit in divided co-ownership, you do not only acquire an  apartment. You also join a group of co-owners responsible for the accounts to be paid to maintain and preserve the building. It is therefore important to be careful and to check, upstream, the financial statements and…...

Purchase
{alt}

11/09/2024

Nouvelles règles imminentes pour les copropriétés et WEBRADIO spéciale du 12 septembre 2024

Le jeudi 12 septembre 2024 de 19h00 à 21h00, nous étions réunis pour une émission spéciale de webradio dédiée aux nouvelles obligations légales pour les syndicats de copropriétaires. Cette émission a enregistré une audience record !  Mercredi 11 septembre 2024, le Gouvernement du Québec a publié, dans la Gazette officielle du Québec,…...

Syndicate

23/07/2024

Tax regime of the syndicate of co-owners

In general, a syndicate of co-ownership is considered a non-profit organization (NPO). As such, it benefits from a tax exemption. However, like any legal person, the syndicate of co-ownership must comply with various tax obligations, failing which it may face penalties that could have significant repercussions on the financial situation of…...

Syndicate

23/07/2024

Civil liability of the directors

The juridical personality of the syndicate is distinct from the one of the co-owners and directors. His acts are binding only on himself, besides for the exceptions provided by law. The faults committed by the syndicate have consequences only on its own civil liability and not on the directors. Under these conditions,…...

Syndicate
lock
You need to have an account to read this article

08/07/2024

Can there be a limit on the contribution to the contingency fund?

I've recently become a co-owner. The building I live in, which is over 30 years old, has 10 units. The contribution to the reserve fund is substantial. In fact, it consumes 20% of the condominium's budget! This seems excessive to me. The other co-owners share this concern and question if…...

Work
{alt}
lock
You need to have an account to read this article

08/07/2024

Frequency of a contingency fund study

Seven years ago, the board of directors engaged professionals to conduct a contingency fund study. Upon reviewing it, the directors at the time deemed the financial contributions required from the co-owners to the contingency fund too costly. Recently, a sale of an apartment in our building failed because the buyer…...

Work

27/06/2024

Financing the work

Co-ownership work is of the utmost importance. Yet, they are more often than not overlooked by the syndicates of co-owners. Work that needs to be done in common portions can be minor or major in scope. Yet one needs money to pay for them. Good financial planning is therefore advisable…...

Work

19/06/2024

Contingency fund

With the entry into effect of the Civil Code of Québec in 1994, the legislator introduced the obligation for every syndicate of co-owners to have a contingency fund in order to anticipate and to finance the future expenses to repair and to replace the common portions; this fund is strictly reserved…...

Work

23/06/2024

Certificate of the state of the immovable

Every syndicate of co-owners has obligations regarding the maintenance of the common portions. The certificate of the state of the immovable is an essential step in ensuring the preservation of the immovable; it constitutes a preliminary step before seeking the services of a professional to conduct a contingency fund study. The certificate…...

Work

16/06/2024

Investments and availability of the contingency fund

In the case of contingency funds, a syndicate of co-owners must have guidelines for the investment of the sums accumulated in the fund. It must  clearly define the return and risk objectives for a given period while taking into account constraints such as liquidity needs, the legal context and exceptional…...

Work
{alt}

16/06/2024

Asset management plan

The Asset Management Plan (AMP) is a comprehensive process for ensuring the conservation and maintenance of real property assets. This plan details the information regarding the common elements and the measures required to provide an agreed-upon level of service in the most cost-effective manner, while describing the associated risks. In…...

Work

16/06/2024

Contingency fund study

As beautiful as it may be, a new co-ownership will age and eventually require major repairs. In Quebec, however, about half of the syndicates of co-owners do not have any management tools to adequately fund the contingency fund. This issue, which can sometimes have financially disastrous consequences for certain co-owners,…...

Work

16/06/2024

Purpose of the contingency fund

The contingency fund constitutes first and foremost a prevention tool. The desire to incite co-owners to anticipate the completion of important work is not news. Prior to the entry into effect of the Civil Code of Québec in 1994, it was a frequent occurrence  for a co-ownership (condominium) to have…...

Work

25/05/2024

Insurance deductible

Most insurance policies include deductibles, with amounts varying based on the insured risk. For example, the deductible for water damage is generally higher than that for fires. The purpose of the deductible is to make the insured responsible by having them cover part of the repair costs for damages caused by…...

Insurance

21/05/2024

Self-Insurance Fund

Syndicates of co-owners must set up a liquid and available short-term Self-Insurance Fund. The purpose of this fund is to anticipate and finance, in particular, expenses relating to the carrying out of future work following a disaster. This fund, mandatory under article 1071.1 of the Civil Code of Quebec, became…...

Insurance
{alt}

04/05/2024

Swimming pool in a divided co-ownership

The presence of a swimming pool in a divided co-ownership is a significant attraction for the building's occupants, transforming common portions into a haven of relaxation and comfort. This facility allows residents to enjoy swimming pleasures without leaving the comfort of their home. Effective management and proper use of this…...

Management

30/03/2024

Allocation of common expenses between the vendor and the purchaser

Common expenses are payable by the person who is the title owner upon receipt of the notice of assessment. However, when selling a fraction, the buyer may be required to pay with interest for all common charges owed by the seller (Article 1069 of the Civil Code of Québec). It…...

Purchase
{alt}
lock
You need to have an account to read this article

22/03/2024

Guide des acronymes et abréviations clés en copropriété

En tant que membre du conseil d'administration de notre syndicat de copropriété, je suis fréquemment confronté à une variété de documents et communications qui emploient divers acronymes et abréviations propres au secteur de la copropriété. Dans le but d'améliorer ma compréhension ainsi que celle des autres membres du conseil, et…...

Your Rights

29/02/2024

Forecast annual budget

Preparing a forecast annual budget is an unavoidable task in a co-ownership (condominium); its preparation, preliminary examination and adoption will ensure the proper functioning of the syndicate of co-owners. It is up to the board of directors to define the terms of the forecast annual budget based on the expenses that will have to…...

Management
{alt}

01/01/2024

Capsule vidéo avec Yves Joli-Coeur: Le fonds de prévoyance

Dans cette capsule vidéo, l’avocat émérite Yves Joli-Coeur explique le concept du Fonds de prévoyance. Il rappelle qu’avec l’entrée en vigueur du Code civil du Québec, en 1994, le législateur québécois a introduit l’obligation, pour tout syndicat de copropriétaires, de se doter d’un « fonds de prévoyance ». Ce fonds…...

Work

09/08/2022

Fund accounting

A syndicate of co-owners has the obligation to account for its operations by funds. The Civil Code of Québec requires the creation of a general fund, a contingency fund and in April 2022, the creation of the self-insurance fund. The creation of the early self-insurance fund is recommended. The general…...

Management
{alt}
lock
You need to have an account to read this article

11/06/2021

Fonds d’auto assurance: montant additionnel raisonnable

Le fonds d’auto assurance est affecté au paiement des franchises prévues par les assurances souscrites par le syndicat et d'un montant additionnel raisonnable Questions : Qu'est-ce qu'un montant additionnel raisonnable? Comment fait-on pour connaitre la somme additionnelle? On doit se fier sur quoi exactement pour définir la somme additionnelle?...

Insurance
visuel_colloque2010
lock
You need to have an account to read this article

09/08/2022

Can part of the money accumulated in the contingency fund be used to set up a self-insurance fund?

At our last annual co-owner's meeting, the board of directors informed us that it was going to take $10,000 from our contingency fund to set up a self-insurance fund. To justify their decision, the directors said that this will allow to avoid putting up a special assessment. Several co-owners seemed to…...

Management

31/07/2020

Webradio du 29 juillet 2020: Faire fructifier son fonds de prévoyance

...

Work

09/08/2022

A survey confirms our concerns

October 13, 2015 - A contingency funds survey was recently carried out. It confirmed our apprehensions dating back several years: the lack of discipline of many syndicate of co-owners could eventually lead to a general loss of confidence towards co-ownership’s concept of collective housing. The three parties in the survey,…...

Work
lock
You need to have an account to read this article

09/08/2022

We do not have a contingency fund

  I have been living for a year in a condo I bought in a recently built building. To my surprise, there is still no contingency fund being funded. We pay the common expenses of the immovable monthly (maintenance, snow removal, condo insurance), but no 5% of the budget contribution…...

Your Rights