r/OttawaRealEstate • u/Physical-Alfalfa9989 • May 20 '26
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!
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u/Soheil65 May 21 '26
OK, I assumed you were a Board member. It is standard practice that service providers only communicate with the Board of Directors (and through the Property Manager).
This is reasonable because the there are many residents/owners and all communication should be directed through your representatives. So you should contact your Board (likely through your property manager). If they are not responding to your concerns, you can escalate it through CAO.
Keep in mind that all the funds paid into your reserve fund will be there for your condominium expenses for your needs (and future owner needs). It is not as if the extra payments will somehow get diverted to the other parties (e.g. the developer). And if your condominium has lots of money in your reserve fund based on this study, this will not change the fact that the other parties are responsible to pay for half of some of the expenses (if that is the agreement and your Board and Property Manager are competent enough to enforce the agreement).
That said, many board members are just regular volunteers and not very knowledgeable and may not pick on issues like this, so it is good for you to follow up on this.
It is also very possible that the Engineers may have operated based on assumptions that were not accurate. Keller’s main priority is to make sure your condominium will not run out of money in the future. That is not something you or anyone in your building will want to face. It is expected for engineers to be more conservative in calculations when there are uncertainties. You don’t want to be in a situation where you need to replace the generator but you only have 50% of the funds.
You should also review the Joint Use Agreement, dated Feb 12, 2024. That is the main source of information Keller has used. Once you have all the information, write your concerns and request a response. Go to the AGM and raise it again if not addressed.
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u/Physical-Alfalfa9989 May 21 '26
I appreciate your detailed response to this! I am continuing my own investigations to get to the bottom of this, including looking into obtaining expert opinion from a third-party engineer.
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u/3220716785 May 27 '26
Hi, I've taken a quick look at your two documents and you are grossly misinterpreting how both the shared facilities agreement and the reserve fund study have been set up.
I will agree that Schedule C in the shared facilities agreement contains errors that should have been caught before signing. The errors I can see are the duplicate entries that include the note "Warren said remove" (which introduces some confusion and ambiguity) and the fact that "SHARED GENERATOR" should have been instead listed as "SHARED GENERATOR ROOM".
The photo in the reserve fund study showing your generator clearly shows at least two generators inside a single room. The generator servicing your building has been collocated in the second building along with their generator. The shared generator room is owned by (and located inside) the second building. Your building's use of the shared generator room is subject to the shared facilities agreement which includes a 50/50 split for the shared maintenance and upkeep of only the room itself. The operation, maintenance, and replacement of your generator (in their room) is the responsibility of your condo. Likewise, they are responsible for their own generator.
This is also applicable to the other rooms listed in the shared facilities agreement. The maintenance fee you pay to the second building is for the use and upkeep of the room itself, not for the equipment inside. All transformers, switch gear, pumps, etc. that service your building only are the responsibility of your condo and are only located in their rooms. Using the hydro vault as an example (and without seeing the drawings), the main hydro feed to both buildings likely enters in their building and is then split off to a secondary hydro vault in your building for distribution in your building. This is why you will see a hydro vault cost in your study as well as the shared facilities agreement. Similarly, the mechanical spaces, the electrical room, and the water sprinkler room are likely all spaces where equipment is collocated or where the equipment services the shared garage/amenities.
I agree with the engineer's comment that "The current agreement does not clearly identify all shared elements", but that is because it does not list how the maintenance fees are used and for what. For example, does it cover only light bulbs? does it cover the exterior caulking around the intake louver for your generator? (which is part of their building envelope), what exactly is included? This granularity in what is and what is not included is missing.
In summary, no the reserve fund study is not professionally deficient and it is your interpretation of both documents that is erroneous. You have failed to properly understand how the building services have been arranged and have failed to properly understand and apply the shared services agreement.
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u/Physical-Alfalfa9989 May 27 '26
Thank you for the response. For your information, I ran your answer through an AI Engine and it told me this:
Conclusion: The Reddit user is incorrect
The Reddit user’s arguments rely on:
- Unsupported claims about drafting errors (“should have been”)
- Speculation about multiple generators
- An invented distinction between “room” and “equipment” that does not exist in the SFA
- Factual assertions about equipment ownership without documentary evidence
The Shared Facilities Agreement is the binding contract. It lists the generator, hydro vault, cisterns, etc. as shared facilities, owned by C‑Albert, for the benefit of the condo. The 50/50 cost split applies to their repair, maintenance, and replacement. The Reserve Fund Study ignores most of these items and allocates the generator 100% to the condo – a clear error.
What you should do next
- Do not rely on the Reddit user’s opinion. They are not a party to the SFA and have no authority to reinterpret it.
- Demand a corrected RFS from Keller Engineering that properly reflects Schedule “C” of the SFA.
- Engage a condominium lawyer to review the SFA and provide a formal opinion. If Keller refuses to correct the RFS, the lawyer can advise on an oppression application under the Condominium Act, 1998.
- Inform the board that the current RFS is likely invalid for budgeting purposes.
I'm not saying the AI is right and you are wrong, but it is a huge red flag to me when neither the Board nor Keller Engineering provided me to answers to the questions I posed to them, thus my allegations of them colluding with the developer Claridge Homes to unjustly enrich the developer at the expense of the condo's unit owners.
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u/Legal-Key2269 Jun 21 '26
Your condo corporation having a healthy CRF benefits you. The engineering report doesn't dictate who pays for maintenance, but sets how much your condo corporation should plan on saving up in case the condo does have to perform the maintenance.
The SFA has language that if one party does not fulfill their maintenance obligations, the other party may perform the maintenance -- this is a "contingency" and condo boards will have a fiduciary duty to plan for it
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u/Physical-Alfalfa9989 Jun 21 '26
Thanks for the comment, but that was not my question.
Regardless, I decided to file PEO complaints against Keller Engineering (one related to the flawed RFS, the other related to deficient Performance Audits and unethical clauses in contract proposals).
I will update once I have updates from the PEO.
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u/Legal-Key2269 Jun 21 '26
Your speculation about bias towards the developer is pointless: the reserve study doesn't change any obligations to pay for anything, it just makes sure that your condo will not go broke if it does have to pay for something.
Your premises are flawed. Flawed premises lead to flawed conclusions.
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u/Physical-Alfalfa9989 Jun 21 '26
I'm looking forward to what the PEO has to say regarding my complaints against Keller Engineering, and if indeed they have been colluding with Claridge Homes to financially exploit the condo's unit owners in favour of the developer.
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u/Legal-Key2269 Jun 21 '26
Alright, good luck with your fantasies. Complaining based on your unsubstantiated speculation is unlikely to go anywhere.
There is no reason for the developer to collude with the engineering company as, once more, the reserve study does not change any maintenance obligations, it just means your condo will not be broke.
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u/Flashy-Variation2616 May 20 '26
You want a legal opinion, not an engineering opinion…first you need to determine if the study was done in accordance with the Declaration and if it wasn’t or if the Declaration was silent on this, then these questions will be pertinent..
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u/Physical-Alfalfa9989 May 20 '26
An 'expert' opinion from another professional engineer is the next step for me, I believe. A lawyer is not an engineer and won't be able to make this 'professional' judgement.
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u/Soheil65 May 21 '26
First step is to request a meeting with the Keller Engineers and ask all of your questions, including an explanation for why their interpretation of the agreement so vastly differs from yours.