Understanding Reserve Fund Requirements for Yukon Condominiums
Reserve Fund Rules for Existing Condos
For condominiums that were already in existence before October 1, 2022, the Act provides a five-year transition period to allow corporations to prepare for full compliance.
Transitional Provisions:
Condos 10 Years or Older (as of October 1, 2022):
Exempt from reserve fund requirements until October 1, 2027.
After this date, they can waive the requirement for an additional one-year period by passing a special resolution (a vote by unit owners).
Condos Less Than 10 Years Old (as of October 1, 2022):
Also exempt from reserve fund requirements until October 1, 2027.
These provisions give existing condominiums time to assess their financial health and make necessary adjustments before mandatory reserve fund contributions begin.
Reserve Fund Rules for New Condos
For condominium corporations established after October 1, 2022, reserve fund compliance is immediate and non-negotiable.
Key Reserve Fund Requirements for New Condos:
Initial Reserve Fund Contribution by the Developer:
The developer must contribute 25% of the estimated first-year common expenses to establish the reserve fund.
First Reserve Fund Study:
Must be completed before the first annual general meeting to estimate costs for repairs and replacements over the next 25 years.
Ongoing Reserve Fund Studies:
Required every five years to keep the fund properly financed and up to date.
Who Can Conduct a Reserve Fund Study?
Only a qualified professional can prepare the study, including:
Professional engineers
Architects
Members of the Appraisal Institute of Canada
Certified Reserve Planners (CRPs)
Financial Management of the Reserve Fund:
Reserve funds must be held separately from the condo corporation’s operating funds.
Contributions are collected through monthly condo fees paid by unit owners.
Why Do These Changes Matter?
Reserve funds are critical for the financial health of any condominium corporation. Without proper funding, unexpected repair costs (e.g., roof replacement, elevator repairs, or plumbing overhauls) could lead to special assessments—large one-time fees imposed on unit owners. The new regulations aim to protect condo owners from financial surprises and ensure long-term property maintenance.
For existing condo owners, this means preparing for reserve fund contributions before 2027, while new condos must comply immediately.
By staying informed and planning ahead, condo owners and corporations in Yukon can avoid financial pitfalls and ensure the longevity of their properties.