Finances

November 6, 2025 Published by British Columbia Chapter - By Fiona Therrien

Contingency Fund Essentials For Stratas: Q&A

From CCI BC Strata Connection Magazine, Volume 05, Fall/Winter 2025

As strata managers, we get many questions about the ins & outs of how to use the Contingency Fund. Here are some of the most common.

1. What is the Contingency Fund and how is it different from the Operating Fund?

The Contingency Reserve Fund (CRF), often referred to as the "rainy day fund," is a dedicated financial reserve established by strata corporations to cover expenses that occur infrequently—typically less than once a year —or are unexpected. Examples are endless, but include major roof repairs, elevator upgrades, repaving parking lots, or emergency repairs due to unforeseen damage.

The Contingency Reserve Fund (CRF), often referred to as the "rainy day fund," is a dedicated financial reserve established by strata corporations to cover expenses that occur infrequently—typically less than once a year —or are unexpected. Examples are endless, but include major roof repairs, elevator upgrades, repaving parking lots, or emergency repairs due to unforeseen damage.

2. How are contribution levels determined and is there a minimum?

Contribution levels to the CRF are determined through the annual budget, which is presented to strata owners for a majority vote at the Annual General Meeting (AGM). The rules on minimum contributions were changed recently; effective November 1, 2023, strata corporations and sections are required to annually contribute a minimum of 10% of their annual operating expenses to the CRF. 

3. What’s a “healthy” amount for the CRF?

That depends on the strata. A relatively new building, or one that has recently replaced its roof and all its windows, may have lower funding needs than a building that has long been deferring maintenance. Strata corporations should rely on depreciation reports —comprehensive studies that forecast future repair and replacement costs—to guide their CRF contributions. These reports help ensure adequate funding for anticipated long-term capital expenditures and help a strata corporation weigh the trade-off between higher monthly fees today to build the CRF versus lower fees but large special levies in the future.

4. When are stratas allowed to spend money from the Contingency Fund?

Expenditures from the CRF typically require approval by a three-quarters vote of strata owners at a general meeting. However, there are scenarios where a majority vote is sufficient:

• EV charging infrastructure
• Obtaining Certain Reports: the Depreciation Report, Electrical Planning Report, or any report regarding EV charging infrastructure;
• Repairs and Maintenance Recommended in Depreciation Reports: However, this is only useful if the funds in the CRF are sufficient for the project; a special levy to fund the same project requires 75% voter support.

There are also two exceptions that allow spending without ANY prior owner approval, in which case the strata must promptly inform owners of the expenditures made:

• Emergencies: Expenses necessary to ensure safety or prevent significant loss or damage. This includes expenditures made to ensure the insurance policy remains in effect. Such expenditures must be limited strictly to what is required to address the emergency.
• Insurance Deductibles: Payment of unexpected insurance deductibles related to common property claims.

Sometimes owners ask us, Does this qualify as an emergency? While there is no hard-and-fast rule, one consideration is that if you have time to ask for multiple quotes, it’s not an emergency.

5. What alternatives exist for funding major projects?

When facing significant capital projects or unexpected expenses beyond available CRF reserves, strata communities have several alternative funding options:

• Special Levies: A one-time charge assessed on each owner based on unit entitlement. This method quickly raises funds with no interest expense, but imposes the most financial strain on owners. Large levies can be spread into a few instalments.
• Strata Loans: Financing obtained directly by the corporation from financial institutions. Loans spread project costs over time through manageable monthly payments included in strata fees, avoiding large upfront payments, but come with high interest rates. Best suited to small projects when owners are already fatigued from previous special levies.  
• Combination Approaches: Some stratas combine special levies with loans or increased CRF contributions over time to balance immediate needs with long-term financial sustainability.

Wise management of the CRF helps the strata stay on top of repairs while also preserving its market value to prospective buyers. When in doubt, refer to your Depreciation Report and ask your strata manager for advice. 

---

Fiona Therrien, managing Broker of C&C Property Group, a boutique strata agency serving Greater Vancouver. Formerly the Managing Broker of Tribe (2017-2022) and Regional Director for BC at First Service Residential (2013-2017). Strata veteran. Dog and cat lover.