How Much Should a Strata Contribute to the Contingency Reserve Fund (CRF)?
If you live in a condo or townhouse in North Vancouver or West Vancouver, you’re already contributing to your building’s contingency reserve fund (CRF). But how much should be going into that account — and is the legal minimum enough?
Disclaimer: This article is for general information only and does not constitute financial or legal advice. Always consult a strata lawyer or financial professional for guidance specific to your strata.
The Legal Minimum Contribution: 10% Rule
Since November 1, 2023, strata corporations and sections in BC are required to contribute at least 10% of the annual operating budget to the CRF each year.
This change was introduced to help stratas keep pace with the rising costs of major repairs and replacements. For new strata corporations, owner developers must also make a one-time contribution, calculated based on operating expenses and years since the strata plan was deposited.
Key point: The 10% rule is the floor, not the ceiling.
Why Mant Stratas Contribute More Than 10%
In practice, many well-run strata corporations contribute significantly more than 10%. Here’s why:
- Major repairs like roof replacements, plumbing upgrades, or elevator modernizations often cost hundreds of thousands to millions of dollars.
- The depreciation report outlines upcoming projects and is a key guide to setting contribution levels.
- Without sufficient reserves, stratas must rely on special levies, which can create sudden financial hardship for owners.
A healthy CRF means fewer unexpected levies, smoother project planning, and better protection of property values.
How Much is “Enough” for a CRF?
There’s no single dollar figure that applies to every strata. The right balance depends on:
- Age of the building – Older stratas need more in reserve for upcoming repairs.
- Size and type of building – A high-rise with elevators, pools, and underground parking requires a much larger CRF than a townhouse complex.
- Upcoming projects – If the depreciation report shows the roof or plumbing will need replacement soon, higher contributions are essential.
As a rule of thumb, many experts recommend that a CRF should be large enough to cover several major projects over the next 5–10 years.
CRFs and Special Levies: Working Together
Even with careful planning and strong contributions, CRFs don’t always cover everything. When a large, unexpected expense arises, stratas may still need to issue a special levy to owners.
That said, a well-funded CRF reduces both the frequency and size of levies, making it a critical financial safeguard for all owners.
Why This Matters for Buyers and Sellers
For buyers in North Vancouver and West Vancouver, reviewing the CRF balance and contribution history is a smart way to assess the financial health of a strata. A low CRF may be a red flag for future levies.
For sellers, demonstrating that your strata has a strong CRF can make your unit more attractive to buyers.
Thinking about buying or selling a strata condo or townhome? Our experienced team can help you review the CRF and understand what it means for your investment. Reach out today to get started.