There has been much written over the last few years about Ontario condominium Reserve Fund Studies (“RFS”) – what they are, which expenditures should and should not be included, how to define “adequate” funding of a reserve fund, which investment strategies to use and which funding options to implement.  There has been less written on the dynamics of setting some of the assumptions which are used in the studies. This article focuses on two very important and inter-related assumptions – the interest rate and the inflation rate.

I wrote the article after observing that there was a wide variance in rates used in reserve fund studies and that condo boards were not always taking responsibility for the interest rate assumptions used.

Reserve Fund Rates – Fall 2014

Graham Segger