By Shantel Kalakalo, President, Kalham Consulting Ltd. · Article supplied November 9, 2026
Reserve Fund Studies are an important part of condominium ownership and long-term capital planning in Alberta. However, there is often confusion surrounding the terms Reserve Fund Study, Reserve Fund Report, Reserve Fund Plan and Annual Report on the Reserve Fund.
Although these terms are closely related, they represent four (4) distinct elements of the reserve fund planning and reporting process.
Understanding these differences is important for condominium boards, managers and owners, particularly when it comes to recognizing what a Reserve Fund Study can reasonably be expected to provide and the ongoing responsibilities of the Condominium Corporation.
1. What Is a Reserve Fund Study?
A Reserve Fund Study is a process undertaken to identify and evaluate the Condominium Corporation’s depreciating property and estimate its future repair and replacement requirements.
In accordance with Alberta’s Condominium Property Regulation, the study considers:
- An inventory of the depreciating property for which the Corporation is responsible that may require repair or replacement over a period of 30 years or longer.
- The present condition or state of repair of the components.
- The estimated timing of future repairs and replacements.
- The estimated costs of those repairs and replacements, based on current costs.
- The anticipated life expectancy of components following repair or replacement.
- The Corporation’s current reserve fund balance and recommended future funding requirements.
The study process also includes an on-site visual inspection of all visible components of the depreciating property, interviews with Board members and, where considered necessary, other knowledgeable representatives, and a review of relevant documents, including the condominium plan, available construction documents and maintenance records.
The purpose is to establish a reasonable basis for anticipating future capital expenditures and determining the funding requirements necessary to address them.
2. What a Reserve Fund Study Is NOT
One of the most important distinctions is that a Reserve Fund Study is not the same as a detailed engineering or building condition assessment.
Although the study includes a visual inspection and consideration of observed component conditions, it does not ordinarily include invasive investigations, destructive testing or specialized diagnostic procedures.
A Reserve Fund Study is not intended to:
- Provide a comprehensive engineering evaluation of the building’s structural, mechanical, electrical or building envelope systems.
- Identify every existing or concealed construction defect.
- Determine the underlying causes of all observed deficiencies.
- Replace specialized investigations, testing or assessments by appropriately qualified professionals.
- Provide detailed specifications or construction documents for future repairs or replacements.
- Guarantee the remaining service life of building components or the accuracy of future project costs.
For example, a Reserve Fund Study may identify deterioration of a roofing system and provide an estimated timeframe and allowance for replacement. However, determining the precise cause of water infiltration, evaluating concealed conditions or designing a repair solution may require a separate, specialized assessment.
Similarly, estimated service lives are planning assumptions based on available information, observed conditions and professional judgment. Actual component performance may vary.
A Reserve Fund Study is a capital planning tool. It should not be mistaken for a comprehensive investigation of every building system or condition.
3. What Is a Reserve Fund Report?
Once the Reserve Fund Study has been completed, the Provider prepares a written Reserve Fund Report documenting the findings.
Under Alberta’s Condominium Property Regulation, the report must include the findings of the study, the Provider’s qualifications and the required signed declaration concerning eligibility to act as a Reserve Fund Study Provider.
The report communicates important information to the Board, including:
- The components considered in the study.
- Observations regarding their present condition.
- Estimated repair and replacement requirements.
- Current estimated costs and anticipated expenditure timing.
- Long-term financial projections.
- Recommended reserve fund contributions and the basis for those recommendations.
The Reserve Fund Report provides the Board with information to assist in making informed decisions about the Corporation’s future capital expenditures and funding.
However, the report itself is not the Board’s approved Reserve Fund Plan.
4. What Is a Reserve Fund Plan?
The Reserve Fund Plan is the responsibility of the Condominium Corporation’s Board of Directors. It establishes the Corporation’s funding approach based on the findings and recommendations of the Reserve Fund Report and is subject to a mandatory review at least every five (5) years.
After reviewing the Reserve Fund Report, the Board must approve a plan identifying the method and amounts needed to fund and maintain the reserve fund.
The plan must provide for sufficient funding to address the anticipated repair and replacement requirements identified in the report.
Funding may involve regular owner contributions, adjustments to condominium fees, special levies or other reasonable funding arrangements.
The Board must provide owners with a copy of the approved plan in accordance with Alberta’s legislative requirements.
The Study Provider makes recommendations. The Board is responsible for approving and implementing the Reserve Fund Plan.
5. What Is an Annual Report on the Reserve Fund?
In addition to the Reserve Fund Study, Report and Plan, Alberta Condominium Corporations are required to prepare an Annual Report on the Reserve Fund for each fiscal year.
The Annual Report is the responsibility of the Condominium Corporation and provides owners with information about the reserve fund’s financial activity, completed capital expenditures and anticipated expenditures for the current fiscal year.
Under Section 29 of Alberta’s Condominium Property Regulation, the Annual Report must include:
- The reserve fund balance at the end of the preceding fiscal year.
- All contributions and expenditures during that year, including the sources and uses of those funds.
- A list of depreciating property repaired or replaced during that year and the associated costs.
- The projected reserve fund balance for the current fiscal year.
- The total payments into the reserve fund by ordinary or special resolution, and payments out of the reserve fund, projected for the current fiscal year.
- A list of depreciating property anticipated to be repaired or replaced during the current fiscal year and the estimated costs.
The Annual Report must be provided to owners and any mortgagee who has given the required written notice, at least 14 days before the Annual General Meeting, along with the Corporation’s financial statements and annual budget.
Unlike the Reserve Fund Study, Report and Plan, which are generally completed on a five-year cycle, the Annual Report is a yearly requirement.
It is also important to recognize that the Annual Report on the Reserve Fund is not simply the Corporation’s annual financial statements. It is a separate reporting requirement with specific information that must be provided.
While the Reserve Fund Plan establishes the Corporation’s funding approach, the Annual Report documents actual reserve fund activity and identifies anticipated expenditures for the current fiscal year.
Together, these documents help owners understand how the Corporation is managing its reserve fund and implementing its capital planning.
6. Why Do These Distinctions Matter?
A Reserve Fund Study can provide useful information and financial projections, but its effectiveness depends significantly on how the information is used.
Consider a Condominium Corporation whose Reserve Fund Report recommends increasing annual reserve contributions to prepare for future roofing, window or building envelope replacements.
If the Board chooses not to implement an appropriate funding strategy, the existence of the Study does not eliminate the resulting financial shortfall.
Similarly, if projects are completed earlier than anticipated, costs increase or significant repairs become necessary, the financial projections may need to be reconsidered.
The Reserve Fund Report provides the information and recommendations. The Reserve Fund Plan establishes the Corporation’s funding approach. The Annual Report documents reserve fund activity and anticipated expenditures.
Ongoing management determines how effectively the Corporation’s capital planning is implemented.
7. Does a Reserve Fund Study Replace Other Building Assessments?
No.
Depending on the condition, complexity or history of a property, a Condominium Corporation may require additional reviews, condition assessments or technical audits.
For example, observed deterioration of balconies, recurring water infiltration or concerns involving structural components may warrant further evaluation by an appropriate specialist (i.e., structural engineer).
The findings of those assessments can subsequently assist the Reserve Fund Study Provider in refining anticipated repair/replacement requirements and related cost allowances.
The two services can complement one another, but they serve different purposes.
Alberta also introduced a separate Technical Analysis requirement applicable to certain new Condominium developments in 2026, further emphasizing the distinction between reserve fund planning and specialized assessments of building conditions.
8. Why Should the Reserve Fund Plan Be Reviewed Regularly?
Alberta generally requires Condominium Corporations to complete a new Reserve Fund Study and Report and approve a Reserve Fund Plan at least every five (5) years.
However, a great deal can change during that period.
Construction costs fluctuate, projects are completed or deferred, building conditions change, and actual expenditures may differ from previous estimates.
Reviewing the reserve fund position and upcoming expenditures annually helps Boards identify potential issues and determine whether changes to their financial planning may be warranted.
The Annual Report on the Reserve Fund provides an opportunity to review the Corporation’s actual reserve fund activity against its anticipated expenditures.
However, the Annual Report does not replace the need to review future capital expenditures, project timing and funding requirements.
The 5-Year Board Plan is a useful management tool for reviewing anticipated expenditures and contributions between formal Reserve Fund Studies.
By regularly reviewing the Corporation’s financial position and upcoming projects, Boards can make adjustments before potential funding shortfalls become more significant.
9. Turning Information Into Action
A Reserve Fund Study should not simply be viewed as a document prepared to satisfy legislative requirements.
Its value is in helping Condominium Corporations anticipate future capital expenditures, understand potential financial obligations and make informed long-term decisions.
At Kalham Consulting, we provide Reserve Fund Studies in both Comprehensive and Streamlined reporting formats, allowing Condominium Corporations to select the level of reporting detail best suited to their needs.
We also offer Five-Year Board Plan Updates to assist Boards in monitoring their capital planning and financial projections between formal studies.
A Reserve Fund Study identifies future capital requirements. A Reserve Fund Report documents the findings and recommendations. A Reserve Fund Plan establishes the Board’s approved funding approach. An Annual Report provides owners with an annual accounting of reserve fund activity and anticipated expenditures.
Together, these four requirements support informed decision-making, financial accountability and effective long-term capital planning.
Understanding the differences is an important step toward more effective condominium management.
For more information, visit www.kalham.ca.
This article is provided for general educational purposes and is not intended to constitute legal, engineering or other specialized professional advice. Readers should refer to Alberta’s applicable legislation and seek qualified professional advice where necessary.
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