In theory, two condominium properties built by the same developer, in the same year, and based on the same blueprints may seem perfectly identical. But every month, when it comes to evaluating the amount of the contribution to be paid into the reserve fund, the figures differ. The reason : the reserve fund study must be based on the building’s actual condition over the years, compared to the theoretical life expectancy data for each component. This is where the building inspection becomes necessary.
Key points – What to remember :
- Two identical buildings rarely age at the same rate.
- Orientation, soil conditions, and climate affect the durability of materials.
- The construction quality varies among buildings within the same project.
- The way condominiums are used affects common areas’ condition.
- The actual condition of a building matters more than the theoretical components’ age.
- Only a physical inspection can highlight these differences.
What does the reserve fund study actually assess ?
The calculation of a reserve fund is based on the actual condition of a building, as observed during the inspection, and not solely on theoretical projections.
To remember :
- Actual condition = a building and its history over the years.
- Theoretical life expectancy = a building’s generic data.
- Building inspection = a physical examination that compares the theoretical aging and
- the actual condition of each component.
- Reserve fund = contributions based on the observed gaps.
What are the factors that influence contribution rates ?
A building does not remain static after its construction, it changes over time, and every exposure leaves its mark, even if its outward appearance seems identical.
Factors :
- Environmental Impact.
- Site conditions.
- Quality of construction work.
A northwest-facing facade is exposed to much harsher weather than a southeast-facing one, and two buildings constructed side by side do not necessarily stand on homogeneous grounds.
What this means in practice :
- A roof more exposed to wind wears out faster.
- A north-facing wall retains moisture and humidity longer.
- Uneven ground settlement causes slabs to crack more quickly.
- An active water table accelerates soil degradation.
To remember :
Under real conditions, only a physical inspection can reveal these differences, which will not become apparent until 10 to 15 years later.
Why is maintenance history more important than the age of components ?
Maintenance history is more valuable than a component’s theoretical age because it reveals its actual lifespan, not its ideal lifespan.
What this means in practice :
- A facade joint repaired in time prevents water from seeping into the walls.
- A heating system serviced annually breaks down less often.
- A regularly updated maintenance handbook allows you to safely plan certain replacements in advance.
“There are companies that conduct reserve fund studies based solely on the life expectancy of different systems. For example, a component that, according to the handbook, may last 13 or 15 years, appears to us to fail prematurely after 8 years. These differences have a huge impact on the budget and the premium.”
How does the use of a condominium complex affect the reserve fund ?
The use of a condominium complex affects the reserve fund because a building occupied by its owners does not age the same way as a building mostly occupied by renters. This factor, which is almost never mentioned in premium studies, can nevertheless create a gap between two identical buildings.
What this means in practice :
- In a building with a majority of tenants, problems are not always detected and reported quickly.
- Tenant turnover increases depreciation of elevators, lobbies, and common doors.
- Maintenance fees kept at the legal minimum for years create a structural backlog.
“People think that an initial rate of 5% at the building’s construction stage is enough. Maybe at first, but over time, the issues grow exponentially. The cost of living rises, and inflation breaks down the idea that 5% is sufficient.”
How does a building inspection help identify gaps in reserve funds ?
A building inspection helps identify gaps in reserve funds by revealing the actual condition of each component. This involves a physical inspection of the interior, rather than calculating its expected lifespan based on generic tables.
Steps for reliable assessment :
- Visual and technical inspection of all common areas.
- Evaluation of the actual condition of each component, not just its theoretical age.
- Comparison of actual results with theoretical life expectancy data.
- Review of the maintenance handbook documented by the homeowners’ association
- Analysis of site conditions (soil, exposure, quality)
- Development of contribution scenarios based on these actual findings, over a 25 year period
“This is the first step. We determine the current condition of the systems, and based on that, we can assess the expected lifespan of each component, the maintenance requirements and the changes that need to be made.”
What should you keep in mind before comparing your reserve fund to your neighbor’s ?
Before comparing your reserve fund to your neighbor’s, it is important to understand that a building’s actual condition matters more than its original condition and relying solely on theoretical projections often leads to incorrect conclusions.
Best practices for a homeowners’ association :
- Never assume that a neighboring building has similar needs
- Require a complete physical inspection before calculating assessments
- Maintain a detailed year-by-year maintenance history
- Have the reserve fund study reviewed every 5 years, as required by Bill 16
- Have the assessment performed by an engineer who is a member of the OIQ.
Genispec
Consulting engineering firm based in Québec
Genispec is a consulting engineering firm made up of building engineers who are members of the OIQ. We offer specialized services in façade and underground parking inspections in accordance with Law 122, as well as reserve fund studies and maintenance logs as required by Law 16. We also conduct inspections of commercial, multi-residential, industrial buildings, and condominiums. In addition, we provide building condition certificates and pre-delivery inspections.
All our reports are validated by a qualified engineer. Every article published on our website is reviewed and approved by a qualified member of our team to ensure the technical accuracy of the information.