What is a Contingency Reserve Fund (CRF) in a Strata?
If you own a condo or townhouse in North Vancouver or West Vancouver, you may have heard the term Contingency Reserve Fund, or CRF. But what is it — and why does it matter to strata owners?
A contingency reserve fund is a special account that every strata corporation or section in British Columbia is required to maintain. Its purpose is to cover expenses that happen less often than once a year or that are unusual and unexpected. Think of it as a “rainy day fund” for your building.
Disclaimer: This content is for general information only and does not constitute legal or professional advice. Always consult a qualified strata lawyer or financial professional before making decisions about your strata’s CRF.
Why Does a Strata Need a CRF?
Under the Strata Property Act, strata corporations must maintain a Contingency Reserve Fund to ensure they have money set aside for long-term repairs and maintenance. Examples of expenses that the CRF can cover include:
- Roof replacement
- Elevator upgrades
- Road or driveway repaving
- Depreciation report fees
- Electrical planning reports (including preparation for electric vehicle charging infrastructure)
The CRF helps avoid sudden special levies by ensuring funds are available when large repairs or replacements are needed.
How is the CRF Funded?
Contributions to the CRF are collected through strata fees, which are based on each unit’s entitlement. Each year, the strata council proposes a contribution amount in the annual budget, which is typically approved by a majority vote of owners.
Other sources of funds for the CRF can include:
- Surplus funds from the previous year’s operating budget
- Surplus funds from a special levy (as long as the amount owed to each strata lot is $100 or less)
- Sale of strata assets
Since November 1, 2023, strata corporations in BC are required to contribute at least 10% of the annual operating budget to the CRF. For new strata developments, the owner developer also contributes according to a set formula based on estimated operating expenses.
Is the CRF Always Enough?
Even with careful planning, it’s common for Contingency Reserve Funds to fall short of covering major projects. For example, replacing a roof or upgrading plumbing can cost millions in a large building, and the CRF may only cover part of the expense.
When this happens, strata corporations often need to raise extra funds through special levies — one-time (or staggered) payments by owners to cover the shortfall. While levies aren’t popular, a healthy CRF can reduce their frequency and size, acting as an important safeguard.
How Much is a Good Amount to Have in the CRF?
There’s no one-size-fits-all number, because the right amount depends on:
- The age of the building – Older stratas usually face higher repair costs.
- Upcoming projects – Major repairs identified in a depreciation report should guide contribution levels.
- Building size and complexity – A high-rise with elevators and underground parking will require more long-term funds than a small townhouse complex.
As a rule of thumb, many professionals recommend keeping the CRF balance high enough to cover multiple large projects within the next 5–10 years. Reviewing the depreciation report regularly helps strata councils and owners assess whether their CRF is on track.
CRF for Sections within a Strata
Some strata corporations are divided into sections, such as a commercial area within a residential building. Each section must maintain its own operating fund and CRF for expenses specific to that section. Owners in a section also contribute to the main strata corporation Contingency Reserve Fund for shared expenses.
Why This Matters for North and West Vancouver Strata Owners
CRFs are particularly important in North Vancouver and West Vancouver, where older strata buildings may face costly repairs like roof replacement, elevator modernization, or paving. Planning ahead with a properly funded CRF can prevent sudden financial burdens and help maintain the property’s value.
If you’re a strata owner and want to make sure your Contingency Reserve Fund is being properly managed — or if you’re buying a strata and want to understand the fund’s status — it’s wise to consult with your strata council, a lawyer, or a strata management professional.
Thinking about buying or selling a strata condo or townhome in North Vancouver or West Vancouver? Our experienced team can guide you through the process and help you understand the role of the CRF in protecting your investment. Contact us today to start the conversation.