Despite what is often said, it is not yet required by law to conduct a reserve fund study, but it’s only a matter of time! As it is always better to prevent than to cure, both condo associations, potential buyers, and their real estate brokers have every reason to ensure that a reserve fund study is carried out before the deadline. Here are the advantages of working with an Inspec-Thor building inspector.
First, What Is Bill 16?
Adopted in 2019, Bill 16 is a major reform of condo law that aims to force existing condo associations to have a professional conduct a reserve fund study according to a cycle that will later be determined.
The purpose is to assess the condition of various common areas of a building to ensure there is enough money set aside for future major repairs and replacement costs.
When this regulation and implementation standards are adopted by the government, condo associations will have 3 years to obtain their first reserve fund study.
Act Now to Benefit from Several Advantages!
Here are four good reasons to act now by hiring a certified Inspec-Thor inspector from your area:
- Avoid Special Assessments: Each month, condo owners pay condo fees to maintain and fund a reserve fund for the building’s upkeep. The law requires administrators to set aside at least 5% of the condo’s annual operating budget. Though this percentage can be higher, sometimes reaching up to 20%, owners may find themselves paying more to cover a shortage for necessary repairs. These “special assessments” can become a significant financial headache for some owners, in addition to being administratively complex! A reserve fund study can help avoid this situation.
- Avoid Surprises: A reserve fund study helps accurately assess future maintenance needs and the funds required for those tasks. A transparent action plan allows administrators to anticipate upcoming work and set aside the necessary amounts to maintain the building and preserve the owners’ investment, without any surprises!
- Improve Relations with Insurers: It’s reassuring for insurers to know that a condo association has the tools and means to properly maintain its building. Given the high number of claims, many insurers have left the condo market, and those who remain have significantly raised premiums and deductibles. A reserve fund study is a good way to negotiate and secure better coverage!
- Increase the Property’s Resale Value: To attract potential buyers, it’s important to demonstrate the financial and physical health of a property—in this case, a divided co-ownership. A reserve fund study allows condo associations to manage their building more effectively by implementing the recommendations of a professional, such as an Inspec-Thor building inspector.
In Conclusion, although Bill 16 does not make the reserve fund study mandatory before 2027 or later, there are many advantages to obtaining it before the deadline.
For any questions or to schedule a reserve fund study, contact our team today.
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