A question I often get asked by buyer clients is how do Vancouver condo buildings assess the owners for repairs. If you purchase a condo in a new building it will be covered by a 2/5/10 year warranty. Prior to the expiry of the warranty the Strata Council will order an engineer's report and send the findings to the Developer to be addressed. After 10 years you're on your own.
What is the Contingency Reserve Fund?
Part of your due diligence when purchasing is to review the financial statements which show the reserve fund. The law now requires stratas to save 10% of their annual budget in the contingency reserve fund. This fund is used for future upgrades and repairs to the building.
How are Upgrades Paid For?
At the annual general meeting there will be a vote to do the repair and how to fund it.. There are a number of ways to pay for repairs. Either by raising the maintenance fees beforehand, or by a special assessment, or a combination of both. Often if a major repair is looming the strata building's property manager will suggest an increase in fees or quarterly payments ahead of time.
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