Quebec condo budget: calculating fees without a hidden deficit
How to build common expenses from operations, reserve-fund contributions, and the self-insurance fund.
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Which amounts belong in condo fees?
The first block covers operations: syndicate insurance, common utilities, cleaning, snow removal, elevators, security, administration, inspections, contracts, and routine repairs. Use actual renewals, recent consumption, and an explained inflation assumption instead of simply adding a percentage to last year's budget.
The second block is the reserve fund, restricted to major repairs and replacement of common portions. Its deposit comes from the study, not an arbitrary amount chosen to keep fees artificially low.
The third block is the self-insurance fund. It must remain liquid for deductibles and certain uninsured losses. The three blocks all form part of common expenses, but their use and accounting should remain distinct.
How is the budget allocated among owners?
Under article 1064 of the Civil Code of Québec, each owner normally contributes to common expenses according to the relative value of the fraction. Users of a restricted-use common portion alone pay its routine maintenance and repair costs.
The declaration may provide a different allocation for major repairs and replacement of certain restricted-use common portions. Before producing the unit schedule, verify fractional shares, special allocation keys, parking, storage, and every published amendment to the declaration.
Calculate each block's annual requirement, subtract only reasonably predictable income, and test cash flow month by month. A budget balanced over twelve months can still run short in January if annual premiums and major contracts fall due before fee receipts accumulate.
How should the budget be adopted and monitored during the year?
The annual meeting notice includes the required financial statements, debts and receivables, forecast budget, and information on proposed contracts and work. Show each line's variance from the previous year, the impact by fraction, and assumptions that may still change.
The board annually sets contributions after consulting the owners, then promptly notifies each owner of the amount and due dates. A special contribution also requires prior consultation. The minutes should record material questions and reasons, not merely the total set.
Every month, compare actual and budgeted income, expenses, arrears, and the three fund balances. Correct structural variances through contract changes, schedule adjustments, or another consultation. Quietly charging an operating invoice to the reserve fund does not fix an inadequate operating budget.
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