How much does a contingency fund study cost?

Since the new obligations introduced under Law 16 came into force, all syndicates of co-ownership are now required to produce a study of the contingency fund. This exercise, essential to the sound management of immovables held in co-ownership, nonetheless represents a significant investment, particularly for complexes equipped with sophisticated technical systems.

It is important to distinguish the contingency fund study from the maintenance logbook. The study aims primarily to determine, over a period of at least 25 years, the costs of major interventions as well as the financial strategy required to maintain an adequate fund. The maintenance logbook, for its part, documents the condition of the immovable, maintenance needs, components and systems, and planned interventions. Several elements mentioned in the original article therefore relate to the maintenance logbook rather than to the study.

The report produced as part of the study typically includes an inventory of the components covered, cost estimates for repair or replacement, and the financial strategy required for the capitalisation of the contingency fund. The study relies on the information contained in the maintenance logbook when it is available. Depending on the size and complexity of the building, a study can easily reach 150 to 300 pages.

The studies are carried out by engineers, certified technologists, or firms specializing in real estate asset management. Their work generally requires access to architectural plans, technical documentation, and the history of previous interventions. In many co-ownerships, this information is incomplete, which complicates the process.

Costs may vary depending on the number of units, the age and overall condition of the building, the complexity of its systems, and the availability of documentation. For large co-ownerships of 25 units or more, fees often range between $8,000 and $10,000, with possible variations between $5,000 and $15,000. In complexes of more than 100 units, the bill may reach or exceed $20,000. For small co-ownerships or those with limited complexity, costs generally fall between $2,500 and $3,500. The complexity of the building remains a determining factor.

Even in well-maintained immovables, the contingency fund study often leads syndicates to realize the scale of the amounts that must be set aside, the need to adjust contributions, or the presence of financial risks associated with an undercapitalized fund. It may also reveal issues related to common portions for restricted use when these are poorly documented.

For syndicates whose financial preparation is insufficient, the results of the study may reveal a concerning situation, particularly with regard to insurance renewal or the resale value of certain units. Many co-owners and market participants are still unaware that the study is mandatory. A significant number of funds remain undercapitalized, exposing immovables to risks when major interventions or unforeseen events arise.

In practical terms, it is recommended to begin the process as early as possible, since specialized firms are in high demand and delays can reach three to four months after the signing of the contract. Most firms carry out a single visit to the building, lasting approximately one to three hours. The studies are generally carried out on a fixed-fee basis, which means that additional charges are not added afterward based on the condition observed during the visit. Finally, an up-to-date maintenance logbook greatly facilitates the professionals’ work and improves the accuracy of their estimates.

Based on an article published in the Journal de Montréal.

Click here to read [in French] the Journal de Montréal article and watch the interview with Me Yves Joli-Cœur.