The contingency reserve fund, demystified

Every strata corporation must maintain a contingency reserve fund: money set aside for expenses that occur less often than once a year, or that do not usually occur at all. Roofs, boilers, envelopes, elevators. The CRF is what stands between an aging building and a punishing special levy, and both the funding floor and the spending rules come from the Act and its regulation.

Funding: the 10 percent floor

While the CRF sits below 25 percent of the annual operating budget, the regulation requires the strata to contribute at least 10 percent of the total operating budget to the CRF each year. Once the fund reaches the 25 percent mark, the minimum falls away and owners decide the contribution through the annual budget. Treat these numbers as the legal floor rather than a target: a depreciation report almost always shows that a healthy fund needs far more than the minimum, and lenders and buyers increasingly read CRF balances the same way.

Spending: which vote unlocks the fund

Situation	Authorization
Expenditure consistent with the depreciation report's recommendations	Majority vote at a general meeting (a threshold lowered in recent amendments; confirm the current section 96 text)
Other CRF expenditures	3/4 vote at a general meeting
Emergency: immediate expenditure needed to ensure safety or prevent significant loss or damage	Council may spend without a vote, then must inform owners as soon as feasible

Whichever path applies, the minutes carry the proof: the resolution or the emergency rationale, and the amounts. An emergency spend with no minute explaining the emergency looks like an unauthorized spend.

Where the money sits

CRF money must be held properly: in the strata's name, separate from operating funds, in insured accounts or the conservative investments the regulation permits. Interest earned belongs to the fund. The treasurer's report at each council meeting should state both balances, operating and CRF, and those two numbers belong in every set of minutes; they are among the first things a buyer's lawyer reads.

The CRF and the depreciation report

The depreciation report is the CRF's instruction manual: it forecasts what the building will need over thirty years and models funding scenarios. Now that reports are mandatory for most stratas on a five-year cycle, the annual budget conversation should start from the report's tables rather than from last year's contribution plus a shrug.

This page is general information for BC strata councils, not legal advice. See the current text of the Strata Property Act and the Strata Property Regulation on BC Laws.

Related guides

Depreciation Reports
Annual Budget
Special Levies
Voting Rules