Strata Tip of the Week - Does This Strata Have Enough in Its CRF?

One of the most common questions we get from buyers when reviewing strata corporations is:

Does this strata have “enough” in its Contingency Reserve Fund (CRF)?

It’s a straightforward question, but the answer can vary significantly depending on what’s being asked. To get a clearer picture, it’s helpful to break this question into two parts:

1. Is this strata contributing enough to the CRF to meet the minimum legislated requirement?

2. Will the current CRF balance, combined with ongoing contributions, be sufficient to cover future capital expenses without needing special levies?

It’s important to understand that a “yes” to the first question doesn’t guarantee a “yes” to the second. Meeting the minimum contribution requirement doesn’t necessarily mean the strata is saving enough to avoid future special levies.

To assess whether a strata is on track, it’s essential to review a few key factors, including:

• Current Savings – How much is already in the CRF?

• Annual Contributions – How much is being added to the CRF each year?

• Future Expenses – What are the projected capital costs in the most recent depreciation report?

• Adjustments: Are the report’s assumptions (like inflation rates) still realistic? Have any projects been completed, new issues identified, or updated cost estimates obtained that could affect the report’s projections?

Reviewing these factors is essential for understanding whether future special levies are likely.

1. What We Offer: Custom Special Levy Projections

That’s why, at Condo Clear, we provide buyers with a custom projection of the special levies they are likely to face over the next 10 years based on the strata’s current CRF balance, annual contributions, and anticipated expenses in the most recent depreciation report. They’re tailored to the specific unit being purchased and help buyers better understand the true cost of ownership, beyond just monthly strata fees.

2. What We Offer: Province-Wide Market Averages

At Condo Clear, we’ve reviewed thousands of strata corporations across BC, which allows us to provide our clients with valuable market averages. These insights help buyers evaluate how the strata they’re considering purchasing into compares to others across the province.

Here’s what we’ve found when it comes to special levies:

On average, buyers can expect to pay about $18,460 in special levies over 10 years, simply because stratas in British Columbia are not saving enough in their CRF to cover all future capital expenditures.

That’s it for this week. If you have any suggestions for other topics you’d like us to cover, please let us know at info@condoclear.ca.

Disclaimer: The information provided is for general purposes only. It is not intended to provide legal advice or opinions of any kind. No one should act, or refrain from acting, based solely upon the materials provided, any hypertext links or other general information without first seeking appropriate legal or other professional advice.

A little about Condo Clear:

They are a fully licensed brokerage under the BCFSA, and carry Errors and Omissions (E&O) insurance.

They have been in business since 2017 and have completed over 3,000 strata reviews to date province-wide.

Their Review Advisors have firsthand knowledge and experience. They’ve all been practicing strata managers.

A little about Condo Clear Services: 

FAQs: How do Condo Clear’s services work?

Pricing: How much do Condo Clear’s services cost?