Definition : Contingency fund - Replacement of common portions

Work that is not included in the provisional budget, being preservation work upon the immovable (excluding regular maintenance), such as work affecting common equipment items (such as the replacement of the elevator). The cost of this work can be paid from the amounts deposited  in the contingency fund .

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Le fonds de prévoyance est le "bas de laine" d'une copropriété. Il sera indispensable lorsque viendra le temps d'engager des travaux majeurs dans l'immeuble, ou qu'il faudra remplacer des parties communes arrivées à échéance.
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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 in the medium and long term, so that the community of co-owners can adequately protect its real estate investment. Replacing windows, the roof or rehabilitating the underground parking slabs, to name just a few examples, is usually very expensive. Three options are available to the syndicate to pay for this work:
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In Quebec, about half of the syndicates of co-owners do not have any management tools to adequately provision the contingency fund for major repairs or the replacement of common elements. This problem, which sometimes has disastrous financial consequences for some co-owners, should soon be solved by the obligation to obtain a contingency fund study to which the Syndicates of co-owners will be subject by the upcoming amendments to the Civil Code of Québec following the adoption of Bill 16  in December 2019.  
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The contingency fund is set up on the basis of forward planning limited to certain works, namely those aimed at the conservation of the common portions. This collective savings thus makes it possible to finance the execution of works allowing the rehabilitation of the common portions as well as the common portions for restricted use. The contingency fund must be used to pay the cost of very specific work, namely those relating to major repairs or the replacement of the common portions of the building. The board of directors must therefore be able to clearly identify what constitutes the common portions and what the notion of major repairs and replacement of the common portions means.
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With the adoption of the Civil Code of Québec in 1994, to fill a void in the Law, the Quebec legislature introduced the obligation upon a syndicate of co-owners to fund a "contingency fund”. This obligation was intended to fill a gap in the previous law. Prior to the enactment of the Civil Code, it was a frequent occurrence for co-ownerships to have a "reserve fund", although the Civil Code of Lower Canada was mute on this issue. Most of the time, this fund was inadequate, due to the low level of contributions paid into it. Moreover, declarations of co-ownership often included a contribution limit (for example$ 50,000), beyond which it was no longer required to contribute the co-owners.
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