Running a Small Strata | Budget and CRF
Budget and Contingency Reserve Fund
Every BC strata, a duplex included, must pass a yearly budget and pay at least 10% of its operating budget into a contingency reserve fund. Council can touch that fund without an owner vote only in an emergency, for the insurance deductible, or as a short loan to the operating fund. This page covers the two funds, what the budget must show, how owners approve it, what council can spend with and without a vote, how the reserve may be invested, and a first budget layout for a 4-unit strata.
The short answer
- 01Every strata has two funds paid by strata fees: an operating fund for costs that come once a year or more often, and a contingency reserve fund (CRF) for costs that come less often or rarely (Strata Property Act s.92).
- 02At least 10% of the operating budget must go into the CRF every year, at every size, including a duplex (Strata Property Regulation s.6.1).
- 03Owners approve the budget by majority vote at each annual general meeting (AGM). If it fails, the old monthly fees continue until a new budget passes (s.103, s.104).
- 04Council can spend CRF money without an owner vote only in an emergency, to pay the strata's insurance deductible, or as a short loan to the operating fund repaid by year end (s.95, s.98, s.158(3); Regulation s.6.3).
- 05Other CRF spending needs owners to vote first: a majority vote for a depreciation report, work it recommends, electrical planning and EV charging reports and work, and a 3/4 vote for anything else (s.96).
- 06If the bylaws say nothing, council can spend money that is not in the budget only up to $2,000 or 5% of the operating fund for the year, whichever is less (s.98).
The two funds
The strata is responsible for its common expenses (s.91), and the owners pay for them by strata fees into two funds (s.92). Each lot pays its unit entitlement divided by the total unit entitlement, times each fund's total (s.99).
| Fund | What it pays for | Province's examples | Source |
|---|---|---|---|
| Operating fund | Costs that usually come once a year or more often, plus the cost of getting a depreciation report or an electrical planning report. | The Province lists monthly utilities, seasonal landscaping, weekly cleaning, minor maintenance, strata management and the strata's yearly insurance. | Act s.92(a) |
| Contingency reserve fund (CRF) | Costs that usually come less often than once a year, or do not usually come at all. | The Province lists replacing the roof, upgrading the elevator and repaving a road. | Act s.92(b) |
Costs for limited common property, such as upkeep of a yard that only one lot uses, are shared only among the lots entitled to use it (Regulation s.6.4). The unit entitlement page shows the split with worked numbers.
The 10% minimum
The yearly CRF contribution "must be at least 10% of the total amount budgeted for the contribution to the operating fund for the current fiscal year" (Regulation s.6.1(2)). This version of the rule took effect on November 1, 2023. The older rule, which allowed smaller contributions once the fund reached 25% of the operating budget, is gone. There is no size exemption.
At 5 or more lots, the strata must also set the contribution after considering its most recent depreciation report (Regulation s.6.1(1)). A strata with fewer than 5 lots is exempt from the depreciation report (Regulation s.6.22), so it sets the amount itself, with 10% as the floor. The depreciation report page covers the 5 and 6 lot rules.
The first year has its own rules. The owner developer gives each buyer an interim budget before they sign, and its CRF contribution must also be at least 10% (s.13; Regulation s.3.01). The owner developer pays all the strata's expenses up to the end of the month of the first sale (s.7), and the first annual budget, passed at the first AGM, needs at least 10% for the CRF too (Regulation s.3.4). One buyer in a new Vancouver 4-plex wrote to a BC strata advice column in December 2025: the developer had said there would be no strata fees in the first year, and the insurance was a month from running out. The rules above are the ones to check in that case, together with the duty to keep the strata's insurance in place for at least 4 weeks after the first AGM (s.15). The owner developer page has the full list.
What council can do with the CRF
Any CRF expense must fit the fund's purpose: costs that come less often than once a year, or rarely (s.96(a)). Then it needs one of the approvals below. A 3/4 vote means 3/4 of the votes cast by eligible voters present in person or by proxy who do not abstain (s.1). The vote calculator works it out for your number of lots.
| Use of the CRF | Approval needed | Source |
|---|---|---|
| Emergency: spending needed right away to keep people safe or prevent significant loss or damage | No vote. Only the minimum needed, and owners must be told as soon as feasible. Keeping required insurance in place counts. | Act s.98(3), (3.1), (5), (6) |
| The strata's insurance deductible for a repair | No vote, unless the strata decided not to repair or replace. | Act s.158(3) |
| A loan to the operating fund for a short cash gap | No vote. Must be repaid by the end of the fiscal year, and owners must be told the amount and purpose. | Act s.95(4); Regulation s.6.3 |
| Getting a depreciation report | Majority vote at a general meeting | Act s.96(b)(i)(A) |
| Repair, maintenance or replacement recommended in the current depreciation report | Majority vote at a general meeting | Act s.96(b)(i)(A) |
| EV charging work, an electrical planning report, or another EV charging report | Majority vote at a general meeting | Act s.96(b)(i)(A) |
| Anything else that fits the fund's purpose | 3/4 vote at a general meeting | Act s.96(b)(i)(B) |
Spending from the operating fund
An operating fund expense must fit that fund's purpose and be in the budget, approved by a 3/4 vote at a general meeting, or allowed under s.98 or s.104(3) (s.97).
Section 98 covers money that was never in the budget or put to a vote. If the bylaws set a limit, that limit applies. If the bylaws are silent, council can spend less than $2,000 or 5% of the total operating fund contribution for the year, whichever is less, and that cap covers all unapproved expenses in the fiscal year added together (s.98(2)). With an operating budget under $40,000 the 5% figure is the lower one (our arithmetic). An emergency expense, needed right away to keep people safe or prevent significant loss or damage, can come from either fund with no cap, but only the minimum needed, and owners must be told as soon as feasible (s.98(3), (5), (6)).
Approving the budget
Council prepares a budget for the coming fiscal year and sends it with the AGM notice, together with a financial statement (s.103(2)). Owners can amend it by majority vote at the meeting, then pass it by majority vote (s.103). Within 2 weeks after the meeting, the strata must tell owners of any change to their fees (s.106).
The financial statement shows each fund's opening and current balance, income, operating and CRF spending (including any unapproved spending under s.98), and special levy money, as of a day within the 2 months before the AGM. Within 8 weeks after the fiscal year ends, the strata must also prepare a statement updated to year end (Regulation s.6.7).
If the budget fails, council has 30 days (or longer, if a 3/4 vote at the meeting allows it) to bring a new one to a special general meeting. Until a new budget passes, owners pay the old monthly fees, and council may spend only on the regular expense types in the old budget, up to the old amounts (s.104). A surplus goes into the CRF, is carried forward, or lowers next year's operating contribution, unless a 3/4 vote decides otherwise. A deficit must be cleared in the next fiscal year (s.105). A strata can change its fiscal year end by a 3/4 vote after the first AGM (s.102).
Investing the reserve fund
CRF money must be recorded separately from other strata money, and kept in insured accounts at savings institutions in BC or in investments the Regulation allows. Interest and income earned on it belong to the fund (s.95). The Regulation's list (s.6.11):
- savings or chequing accounts at a financial institution outside BC, if the deposit is eligible for Canada Deposit Insurance Corporation cover;
- term deposits and guaranteed investment certificates with a set interest rate, if eligible for Canada Deposit Insurance Corporation or Credit Union Deposit Insurance Corporation of BC cover;
- Government of Canada treasury bills;
- bonds and similar debt issued or guaranteed by Canada or a province, or issued by a Canadian corporation, with 5 years or less to maturity, payable in Canadian dollars and rated A or higher by DBRS Limited;
- fixed income exchange-traded funds traded in Canada that hold only bonds and similar debt in Canadian dollars, with an average remaining term of 5 years or less and 98% or more of holdings rated BBB or higher.
Special levy money follows the same investment rules (s.108(4)).
A first budget layout for a 4-unit strata
These are the lines the Regulation requires, in order, with where a small strata can find each figure. We give no typical dollar amounts, because no official source publishes typical costs for a small BC strata. Each strata's numbers come from its own bills, contracts and insurance quote.
| Budget line | Where the figure comes from | Source |
|---|---|---|
| Opening balance of the operating fund and of the CRF | Last year's financial statement | Reg s.6.6(1)(a) |
| Income other than strata fees, itemized (for example interest) | Bank and investment statements | Reg s.6.6(1)(b) |
| Operating spending by category: strata insurance, common utilities, landscaping and snow, cleaning, minor repairs, management if any, bank fees, tax filing | Last year's bills, the insurance renewal quote, contracts | Reg s.6.6(1)(c) |
| Total contribution to the operating fund | Sum of the operating lines, less other income | Reg s.6.6(1)(d) |
| Total contribution to the CRF | At least 10% of the operating fund contribution; at 5 or more lots, set after considering the depreciation report | Reg s.6.1, s.6.6(1)(e) |
| Each lot's monthly contribution to each fund | Unit entitlement of the lot divided by the total, times each fund's total, divided by 12 | Act s.99; Reg s.6.6(1)(f), (g) |
| Estimated closing balance of each fund | Opening balance plus contributions, minus planned spending | Reg s.6.6(1)(h), (i) |
Example only: made-up numbers to show the arithmetic
Say the operating fund contribution is $8,000. The CRF needs at least 10% of that, so $800. The two funds total $8,800. With equal unit entitlement, each of the 4 lots pays $2,200 a year, or $183.33 a month. These figures only show the arithmetic. Put your own budget and unit sizes into the fee split calculator to see each lot's share.
Best For
- ✓ A small strata that builds its budget from real bills and the insurance renewal, and treats 10% as the floor for the reserve.
- ✓ Owners of a 2 to 4 unit strata, exempt from the depreciation report, who still write down when the roof, siding and fence will need replacing.
- ✓ Councils that bring big CRF spending to a general meeting before signing a contract.
Usually Fails When
- ✕ The budget copies the developer's first-year numbers and never changes.
- ✕ Council pays for a large repair from the CRF with no owner vote and no emergency.
- ✕ Unapproved spending in one year passes the $2,000 or 5% limit because nobody kept a running total.
What To Verify Before Spending Money
- → Your bylaws, which may set a different limit for unapproved spending (s.98(2)(a)).
- → That the CRF contribution in the budget is at least 10% of the operating fund contribution.
- → That CRF money sits in insured accounts or allowed investments, recorded separately.
Common questions
What is a contingency reserve fund in BC? +
The contingency reserve fund (CRF) is the savings fund every BC strata must keep for common costs that usually come less often than once a year, or that do not usually come at all, such as a new roof (Strata Property Act s.92(b)). Owners pay into it through strata fees.
How much must go into the contingency reserve fund? +
At least 10% of the total budgeted contribution to the operating fund, every year (Regulation s.6.1(2)). The rule has applied at every size since November 1, 2023. The old rule that let contributions drop once the fund reached 25% of the operating budget no longer exists.
What can strata council do with the CRF? +
Without a vote, council can spend CRF money only in an emergency (the minimum needed to keep people safe or prevent significant loss or damage), to pay the strata's insurance deductible for a repair, or as a loan to the operating fund repaid by the end of the fiscal year. Everything else needs owners to approve it first at a general meeting (s.96, s.98, s.158(3); Regulation s.6.3).
What vote does a CRF expense need? +
A majority vote for a depreciation report, for work recommended in the current depreciation report, and for EV charging work or electrical planning and EV reports. A 3/4 vote for any other CRF expense (s.96). The money must also fit the purpose of the fund: costs that come less often than once a year or rarely.
What must a strata budget include? +
The opening balance of both funds, income other than strata fees, operating spending by category, the total contribution to each fund, each lot's monthly contribution to each fund, and the estimated closing balance of each fund (Regulation s.6.6). It goes out with the AGM notice, together with a financial statement (s.103).
Who approves the strata budget? +
The owners, by majority vote at the AGM. The proposed budget can be amended by majority vote at the meeting before the vote on the budget itself (s.103). Owners must be told of any change to their fees within 2 weeks after the budget passes (s.106).
What happens if the strata budget is not approved? +
Council must prepare a new budget within 30 days, or a longer time set by a 3/4 vote at the meeting, and put it to a special general meeting for a majority vote. Until then owners keep paying the old monthly fees, and council may spend only on the regular expense types in the old budget, up to the old amounts (s.104).
How much can strata council spend without approval? +
If the bylaws say nothing, less than $2,000 or 5% of the total operating fund contribution for the year, whichever is less, counting every unapproved expense in that fiscal year together (s.98(2)). An emergency expense to keep people safe or prevent significant loss or damage has no dollar limit, but must be the minimum needed.
Where can a strata invest its contingency reserve fund? +
In insured accounts at savings institutions in BC, or in the investments the Regulation allows: deposit-insured accounts outside BC, insured term deposits and GICs with set interest, Government of Canada treasury bills, some government and corporate bonds with 5 years or less to maturity rated A or higher, and some Canadian bond funds (s.95(2); Regulation s.6.11). Interest earned stays in the fund.
Does a 4-unit strata need a contingency reserve fund? +
Yes. The two funds and the 10% minimum apply at every size. A strata with fewer than 5 lots is exempt from the depreciation report (Regulation s.6.22), and the reserve fund rules still apply to it in full.
What happens to a budget surplus? +
Unless owners decide otherwise by a 3/4 vote, leftover operating money goes into the CRF, is carried forward in the operating fund, or reduces next year's operating contribution. A deficit must be cleared during the next fiscal year (s.105).
Can the CRF pay the insurance deductible? +
Yes, with no owner vote, when the deductible must be paid to repair or replace damaged property (s.158(3)). The strata can still sue the owner responsible for the loss to recover the deductible (s.158(2)).
Do I get my CRF contributions back when I sell? +
No. The seller of a strata lot is not entitled to a return of contributions to the CRF (s.101). The Form B a buyer receives shows the CRF balance minus spending already approved (s.59(3)(f)).
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