Co-ownership

Pension fund study

Service

Pension fund

A professional assessment of the pension fund's funded status

The purpose of a contingency fund study is to estimate the cost of major repairs and replacements to common areas. It is generally based on a 25 to 30-year timeframe. It presents a projection of the amounts to be paid by co-owners as common expenses. This portion of the common expenses is set aside in a fund separate from the current operating fund, in order to collect annually the amounts required to be able to carry out such work when the time comes.

This study must be requested by the Board of Directors or its designated representative. This survey is normally part of the condominium register. It is also important to bear in mind that directors are personally liable if they fail to carry out a diligent valuation of the building’s contingency fund. Relying on the statutory minimum of 5% of the budget may not be enough.

What does the contingency fund study involve?

Firstly, a more or less exhaustive inventory of components is required, depending on the building. We need to determine the theoretical useful life of each of them. At the time of transfer between the builder and the syndicat de copropriété, it is important to obtain copies of the building’s construction plans, as well as descriptions and specifications of the common and private areas. This will help reduce the cost of the pension fund study.

Secondly, an economic projection based on component replacement values is required. Such a projection will be used to determine the amount required annually from the co-owners to ensure that the accumulated sums will be sufficient at the time of replacement, and to ensure the building’s longevity. The law stipulates 5% of common expenses as a minimum amount and an obligation. According to experts in the field, this minimum would be insufficient to maintain the building’s longevity. The contingency fund study is there to solve this problem.

Determining the useful life of components

It is based on the information contained in the building condition certificate and the maintenance booklet for older buildings. For a building less than 10 years old, the year of construction will be the starting point for calculating the age and quality of the materials installed. The main factors that can influence service life are:

The study therefore often takes the form of a narrative report containing forecast tables indicating the dates when the work should be carried out. This report can also specify: 

This table can also indicate the condition of each component according to a rating system that prioritizes major repairs and replacement of common areas.

Our approach: visit the syndicate's buildings

We’ll be touring the syndicate’s buildings. We will also carry out a survey of the materials and their condition at the time of our site visit. We will visit all the common areas and as many private areas as possible to determine the condition of the building. However, an expert report on the condition of the building may be required. This type of report is usually produced by an engineer, architect or technologist.

Once the necessary information has been gathered, we will proceed with the study of the contingency fund for the building under consideration.

Frequently asked questions

FAQ

As a general rule, it takes between four and eight weeks to complete a pension fund study, once we have obtained the necessary documents and visited the site.

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