Regulation 6.1 requires that the Contingency Reserve Fund be equal to at least 25% of the Operating Fund. If the reserve fund is below that amount at the time of the AGM, an amount equal to 10% of the operating fund must be contributed annually until the Contingency. The maximum contribution above which a 75% vote is required has been repealed. Any amount can be contributed to the CRF with a majority vote.
This does not mean that the entire reserve fund can’t be spent in one year, however. The next budget must make a contribution equal to at least 10% of Operating Fund. This must be done each year until the reserve fund equals at least 25% of the operating fund.
Please NOTE: This statutory minimum level for the CRF has no relationship to repair and maintenance costs over the longer term. These costs are reflected in a depreciation report; not the operating budget. (Guide 12 to the Strata Property Act)