Definition : Forecast annual budget - Contingency fund expenses

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.

 At our last Annual Meeting, the Board of Directors presented the estimated budget for the coming year. This budget provided for a substantial increase of the common expenses, as significant work was to be carried out during the year to upgrade the elevator. Many co-owners did not agree with this decision, but the budget was passed anyway! I really had the impression that during this meeting, the will of a majority of co-owners was not taken into consideration. Question: What is the power of the co-owners meeting with respect to the vote on the budget? Can it vote against an increase in common charges?

Any syndicate of co-owners has obligations to assume in terms of the maintenance of the common portions. The certificate of the state of the immovable is an essential step to ensure the preservation of the immovable. It is a preliminary step before requesting the services of a professional to establish a contingency fund study.  The certificate of the state of the immovable corresponds to a "balance sheet" of the building: it notes the quality of the building, at a specific time. It includes an inventory of the building's components (outdoor spaces, buildings, dwellings, equipment, etc.) that will be evaluated to establish the amounts to be paid into the contingency fund. Although there is no legal obligation to this effect, this document should be prepared by a professional technologist, engineer, architect.

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:

As pretty as it is, a new co-ownership will age and sooner or later require major repairs.  However, in Quebec, about half of the syndicates of co-owners do not have any management tools to adequately provision the contingency fund. This problem, which sometimes has disastrous financial consequences for some co-owners, should soon be resolved 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. This contingency fund study will prevent it from getting into trouble because of administrators who have not properly planned the amounts of money to be allocated to it. A look at the terms and conditions relating to the contingency fund study and the transitional measures surrounding these new legislative provisions.