Is this Reserve Fund Study flawed or biased in favour of the developer? (Shared facilities, 50/50 cost split, generator 100% allocated to condo)
I am a unit owner in a new condominium building (completed 2024) in Ottawa, Ontario. We have a Shared Facilities Agreement (SFA) with the developer (Claridge Homes, through “C‑Albert”), who also owns an adjacent larger rental/retail building. The SFA says many mechanical and structural elements are shared 50/50 (e.g., generator, hydro vault, storm cistern, fire pump, water entry rooms, etc.). The developer owns 100% of those assets; the condo only has a right to use them.
Our condominium corporation hired Keller Engineering to prepare a Class 1 Reserve Fund Study (RFS). The RFS is now being used to set our reserve fund contributions (approx. $430k/year). I have noticed what appear to be serious errors. I would like professional engineers (especially those with experience in reserve fund studies or shared facilities agreements) to review the facts below and tell me: Is this report professionally deficient, and does it appear biased in favour of the developer?
Key facts from the Shared Facilities Agreement (SFA)
- The SFA explicitly lists Schedule “C” shared facilities, with ownership “C‑ALBERT” and benefit to the condo.
- 50/50 cost split for operation, maintenance, repair, and replacement of all shared facilities (Section 3.02).
- Shared facilities include, among others:
- Shared generator (item 23)
- Shared hydro vault (item 24)
- Storm cistern (items 6, 52, 14, 6)
- Fire pump room (items 14, P114)
- Water entry room (items 15, P115, 38)
- Grease interceptor (items 16, P116, 21, P121)
- Glycol/heating room (items 22, P122)
- 2nd floor terrace finishes (items 27, 28)
What Keller Engineering’s RFS did
- The RFS contains a table of “Shared Facilities Agreement” (page 9) that lists only 7 items, omitting most of the above.
- The generator is explicitly shared under the SFA, yet the RFS (page 63) describes the “Natural Gas Fueled Generator 600V, 300kW” located in the developer’s building (Claridge Sky 10th Floor) and schedules its full replacement cost of $560,000 as 100% payable by the condominium in 2053/54. No mention of the 50/50 split.
- Many other shared elements (hydro vault, cisterns, mechanical rooms) are treated in the RFS as 100% condo expenses, without any cost sharing.
- The RFS states: “The current agreement does not clearly identify all shared elements” – but the SFA actually does identify them clearly in Schedule “C”. The RFS appears not to have properly reviewed or interpreted the SFA.
Why this matters
- The condominium’s reserve fund contributions are being calculated based on a flawed expenditure forecast. If the RFS is wrong, owners will either over‑pay (by paying for assets we don’t own) or under‑pay (by not saving enough for future shared costs). In this case, the RFS understates the developer’s liability and overstates the condo’s liability.
- The generator error alone is a $560,000 cost that at a minimum would be split (280,000 each). The total cumulative effect over 30 years likely exceeds $2‑3 million.
- The developer (C‑Albert) is a large, sophisticated entity. The RFS was commissioned by the condo board, but the developer may have had input or influence. The result strongly favours the developer.
My questions
- Is it standard practice for a reserve fund study to ignore explicit shared‑facility agreements and allocate 100% of major shared assets to one party?
- Would you consider this a professional error, negligence, or possible bias/collusion?
- What would you recommend the condominium do next? (e.g., demand a revised study, file a complaint with Professional Engineers Ontario, seek a legal oppression remedy under the Condominium Act?)
I have PDF copies of the Shared Facilities Agreement and the Keller Engineering Reserve Fund Study uploaded here, for those who are interested in looking into this further:
https://archive.org/details/ocscc-1106-shared-facilities-agreement-feb-2024
Thank you for your attention on this matter!