Contingency fund financing plan

Replacing windows, reroofing or rehabilitating underground parking slabs, to name but a few, is usually very expensive. Upgrading the common portions generally represents significant costs for the co-ownership and the management of these can be complex. This reality is accentuated by the aging of Quebec's housing stock and the new obligations surrounding Bill 16.

Therefore, the contingency fund study must set out the financial parameters  to calculate the required level of contribution of the co-owners to finance essential interventions and maintain the assets in good condition.

Sufficient funding

Based on the different scenarios covered by the contingency fund study, the board of directors establishes the financing plan it prefers. This financing plan establishes the strategy put in place by the Board of Directors to meet the costs of the work estimated in the contingency fund study.  It provides for the amounts of contributions that would be required from the co-owners in the coming years, based on the estimated work schedule. This forecast should not be limited to ensuring that the total income of the contingency fund at the end of the period covered by the study exceeds the total expenditure estimates. It must also take into consideration the various times when it will be necessary to carry out the work so that the sums accumulated before the planned date of completion of the works are sufficient to cover the full financing of these interventions.

Specificized financing

In principle, the syndicate does not have to account for every item in the contingency fund. It is a single fund and can use the money it contains for any major repair or replacement of the common portions. However, the financing plan must, in certain circumstances, be particularized to take into consideration the common portions for restricted use. It may be taken into account in the establishment of the contribution to the contingency fund of the respective rights of the co-owners on the common portions for restricted use.  Article 1064 of the Civil Code of Quebec specifies that the declaration of co-ownership could include a provision allowing a co-owner to be charged, as particular common expenses, for the costs associated with the replacement  of a common portion for restricted use, such as wooden gratings on a roof terrace for which he has exclusive use. Thus each co-owner should inject, if necessary, to the contingency fund the sums required, and this according to his respective rights on the common portions for restricted use. Therefore, accounting entries are necessary in the books of the syndicate to identify the sums paid, held or spent for certain common portions for restricted use.

Consultation of co-owners

The financing of co-ownership work depends first and foremost on establishing a budget. It is essential that this financing plan be presented to the co-owners, meeting in annual or extraordinary meeting, within a reasonable time. Thus, each of the co-owners has crucial information, in the event of the sale of his unit. Remember that any potential buyer must know what to expect, in the future, in terms of contributions to the contingency fund. The consultation of the co-owners on the financing plan is an extremely important step. The latter will be able to evaluate its content and give an assessment of it. Some of them will want to comment on the amounts spent on the various items. Other co-owners will ask for clarification or even suggest changes to be made. A "consultative vote" may even be held, although in principle it has no decision-making value.


WHAT YOU SHOULD KNOW ! A financing plan is a document that presents the financial needs of a syndicate of co-owners at its beginnings and then over several years and the financial resources allocated in return. The objective of the financing plan is to balance the needs and resources of the co-ownership with consistency. TO KEEP IN MIND : Once the financing plan has been drawn up, it should be checked that the initial needs related to the conservation of the building are sufficiently financed and that the financial structure is sound over the budgeted years.

WARNING !​ The co-owners must have all available documents to be consulted on the contingency fund financing plan. This consultation of the co-owners can thus be done in full knowledge of the facts.



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