Why Flexible Reserve Fund Planning Works
And Why Rigid Reserve Fund Plans Fail
Practical Guidance for Smarter Condominium Governance in Sarnia, Ontario
Over the years, our team at Sapphire Condominium Management has managed over $60 million in reserve funds for condominiums throughout Sarnia and Southwestern Ontario. By treating reserve fund studies as strategic guides—not rigid rules—99% of our clients have not required special assessments or additional financing.
These conversations come up regularly in board meetings, and while we don’t manage every building in the region at the moment, we believe every condo deserves the right guidance. That’s why we're sharing the same proven strategies we use with our clients, so your board can plan smarter, spend wisely, and protect your community's financial future.
Reserve fund studies are essential, but not meant to be carved in stone. We've helped many Sarnia condo boards use them as flexible guides, not fixed scripts.
The Mistake: Following Reserve Fund Plans Too Rigidly
Boards sometimes treat reserve fund timelines as mandatory, even when the building's needs or finances change. What if the roof didn’t decay as fast as the engineer expected it to. What if the building’s fascia is still in good condition, or the curbs are not cracking to the point of replacement yet, or the roadway is in decent working order?
And worst of all, what if the Reserve Fund is telling you to replace 100 different items except for the part of the building where the rainwater drains down the side and has caused the brick and mortar to start falling apart—there’s clear evidence it needs to be replaced. Why would we ignore that issue just to ensure we had enough money to replace the items that the Reserve Fund advises us to?
Oh, that’s right, we can special assess. For the coming year, we will just bill the $10,000 per unit to do all of it, or we’ll get a Line of Credit for the building so we can do it all. Does that sound like something the ownership is going to go for? That they’re going to be happy with?
Why It Hurts
Forces spending during cash crunches
Ignores market price fluctuations
May delay urgent repairs elsewhere
What to Do Instead
Reassess major projects yearly
Move timelines forward or back based on funding and priority
Consult your manager and engineer
We just did this recently, where we moved up the roadway replacements to the same time as the curb replacements to make sure there weren’t any added costs in either piece of work, causing damage to the other while completing the replacement.
The best avoidance is ensuring that the Operating fund is running well so that the Reserve Fund can be healthily funded throughout your tenure as a board member.
If you’d like to learn more about better condominium governance, check out our other articles below: