Reserve Now, Save Later: How Smart Planning Helps Avoid Special Assessments

For condominium corporations, multifamily communities, and managed properties across Alberta, one of the most dreaded announcements a board can make is the need for a special assessment. These unexpected one-time charges, levied to cover shortfalls in the reserve fund, often come as an unwelcome surprise to owners—sometimes amounting to thousands of dollars per unit.

But these scenarios are largely avoidable with one simple strategy: start reserving money early and consistently.

What Is a Special Assessment?

A special assessment is an additional fee charged to property owners when the reserve fund does not have enough money to cover major repair or replacement expenses. These assessments often arise from:

• Roof replacements

• Elevator repairs

• Building envelope upgrades

• Parking garage resurfacing

• Emergency infrastructure repairs

While these types of repairs are inevitable over a building’s life cycle, being unprepared financially forces the board to react instead of plan—and that’s when special assessments become necessary.

Why Proactive Reserve Funding Is Critical

The key to avoiding special assessments lies in strategic, proactive reserve fund planning. This means setting aside appropriate funds each year to ensure future capital projects can be paid for without additional contributions from owners.

Here’s why reserving money now pays off later:

1. Costs Are Predictable—If You Plan Ahead

Most major components have an estimated lifespan. Roofs might last 20–25 years. Windows may last 30. With a solid reserve study, you know what’s coming and when, so there’s no excuse for being caught off guard.

2. Avoid Financial Shock for Owners

Special assessments can be financially devastating—especially for those on fixed incomes. Spreading costs over time through regular condo fees is far less disruptive than asking for large lump sums later.

3. Maintain Marketability and Owner Confidence

No buyer wants to hear about an upcoming special assessment when purchasing a unit. Communities with healthy reserves and no history of surprise fees are more attractive to prospective buyers and lenders.

4. Meet Legal and Fiduciary Duties

In Alberta, reserve funds and their ongoing management are mandated by law. A failure to plan or underfund reserves may not just upset owners—it could lead to legal disputes or claims of board negligence.

How Much Should You Be Reserving?

There is no one-size-fits-all number, but a good reserve fund should be built based on the findings of a qualified reserve fund study. This study estimates the future cost of major repairs over a 25–30 year period and recommends annual contributions to meet those needs.

According to best practices in Alberta:

• A fully funded reserve means you’re saving in line with what’s needed to cover expected repairs as they arise.

• Contributions should be reviewed annually and adjusted for inflation, interest, or changes in component condition.

• If your reserve fund is underfunded, it’s better to increase monthly condo fees gradually than to rely on special assessments down the road.

Reserve Fund Studies: Your First Line of Defense

In Alberta, condo corporations are legally required to commission a reserve fund study:

• Within two years of the condo’s registration

• Every five years thereafter

These studies assess the physical condition of common property and provide a financial plan for adequate funding. Following the study’s recommendations—and updating the plan as needed—can virtually eliminate the need for special assessments in well-managed communities.

Avoiding Common Pitfalls

Even with a reserve fund in place, some communities still face funding crises. Here’s why:

Pitfall	How to Avoid It
Underestimating future costs	Hire qualified professionals to conduct detailed reserve studies.
Ignoring inflation and rising costs	Update reserve funding plans annually.
Skipping contributions during “quiet” years	Maintain consistent funding—even when no repairs are imminent.
Using reserve funds for short-term repairs	Keep operating and reserve funds separate and clearly defined.

A Proactive Strategy Pays Off

Reserving money now is not just about avoiding headaches—it’s a form of long-term risk management. Here’s what you gain by staying ahead of the curve:

• Stable and predictable condo fees

• No financial surprises for owners

• Increased property values

• Happier and more trusting residents

• Legal and financial compliance

Communities that consistently fund their reserves enjoy smoother operations and rarely, if ever, need to levy special assessments.

Final Thoughts

The choice is clear: either pay a little now—or a lot later. By building and maintaining a properly funded reserve today, your property can avoid the stress and conflict of special assessments tomorrow.

Whether you're a board member, property manager, or concerned owner, now is the time to review your reserve fund plan, assess your funding level, and commit to a financially stable future. A well-funded reserve is not an expense—it’s an investment in peace of mind.

If you're looking to create a more resilient, well-funded future for your community, contact Stampede Engineering today at (825) 734-3944. We’re here to help make reserve planning simple, strategic, and stress-free.