Challenging a Contingency Fund Study (Bill 16)

Since the new Bill 16 requirements came into force, syndicates of divided co-ownership must produce a contingency fund study (CFS) and a building condition study (BCS), often accompanied by a maintenance logbook / EUC. These documents structure major work, common expenses and future assessments. However, a CFS or BCS may be incomplete, non-compliant or simply poorly adapted to the reality of your building. When and how can you challenge one effectively, without disrupting day-to-day management or compromising your budget?

This article sets out practical criteria, reasonable timelines and a step-by-step process to “challenge a Bill 16 contingency fund study” in an organized, documented and useful way for your board of directors and co-owners.

CFS, BCS and Bill 16: what the law requires

• CFS (contingency fund study): a projection of the major replacements of common portion components, with a schedule and estimated costs, to determine adequate contributions to the contingency fund.
• BCS (building condition study): a diagnosis of the current condition of the components, their remaining useful life and intervention priorities.
• Maintenance logbook / EUC: a structured record of interventions and preventive maintenance, aligned with the BCS.

In legal terms, the Civil Code of Quebec requires the existence of a contingency fund and adequate funding for it (see section 1071 C.C.Q.). Bill 16 clarified the expected methodology and frequency for the studies and logbook, particularly regarding the professional’s independence and the documentation of assumptions. Avoid getting bogged down in lengthy quotations: the key point is that the legal framework is intended to ensure realistic, predictable and justifiable contributions.

Useful resources for validating the legal foundations and best practices:

• Civil Code of Quebec (see the provisions on divided co-ownership and the contingency fund) — LégisQuébec: https://www.legisquebec.gouv.qc.ca/fr/document/lc/CCQ-1991
• RGCQ — best practices in co-ownership: https://rgcq.org/
• RBQ — general information on building maintenance and compliance: https://www.rbq.gouv.qc.ca/

When to challenge a study: signs that it is deficient

Challenging a study does not mean “rejecting” it; it means requesting corrections when the study does not allow the board of directors to make informed decisions. Here are some common warning signs:

• Obvious factual errors (measurements, number of balconies, year of construction, materials, common portions confused with private portions).
• No site visit mentioned, or a cursory visit without measurements or photographs.
• Undocumented methodology (no assumptions regarding inflation, local cost indexing in Montreal/South Shore, or remaining useful life).
• Missing components (roof of one building section, parking areas, electromechanical systems, membranes, intercom, central water heaters, pool, electric vehicle charging stations, etc.).
• Study horizon that is too short or an unscheduled timeline, making budget projections impossible.
• Obvious underestimation of costs (a significant discrepancy with recent quotations obtained by the syndicate or with the maintenance logbook / EUC history).
• Actual or apparent conflict of interest (a firm that also sells replacement work, without a clear separation between the two activities).
• Non-compliance with Bill 16 requirements (e.g., no signature from a qualified professional or no relevant technical appendices).

How to challenge a study step by step

1. Critical review by the board of directors and, ideally, an ad hoc committee
   • Compare the CFS/BCS with the maintenance logbook / EUC, the minutes of the last annual general meetings and previous budgets.
   • Identify 5 to 10 specific points, with supporting documents (photographs, invoices, quotations, plans and previous reports).
2. Written request for explanations from the firm
   • Send a numbered list of questions and discrepancies, with a reasonable deadline (10 to 15 business days) for a response.
   • Specify that the objective is to improve the report, not to escalate the matter.
3. Technical meeting (virtual or on site)
   • Have minutes prepared. If necessary, request an additional site visit.
   • Confirm the professional’s independence and the sources used for pricing (catalogues, cost databases and regional indexes).
4. Board resolution requiring corrections
   • If the responses are inadequate, adopt a resolution mandating the firm to incorporate targeted corrections and a submission schedule (revised version v1, followed by final version v2).
   • Prepare a communication plan for co-owners to explain the process and avoid rumours.
5. Demand letter, if necessary
   • In the event of refusal or inaction, a demand letter may require correction of the report or reimbursement of fees, depending on the contract. Obtain assistance if necessary.
6. Obtain an independent second opinion
   • Mandate another qualified professional to conduct a targeted review (peer review) of the major discrepancies. Provide all relevant documents.
   • The second opinion should not “redo everything” unnecessarily; it should focus on the points posing a budgetary risk.
7. Annual general meeting: present the matter clearly and put it to a vote
   • Present the statement of condition, the corrections obtained or under way, and the budget impacts. Submit the necessary resolutions to a vote (e.g., a mandate to finalize the corrections, approval of the revised budget and creation of a follow-up committee).
   • Make sure the minutes of the annual general meeting accurately reflect the decisions and timelines.
8. Integrate the corrections into the budget and maintenance schedule
   • Adjust common expenses and contributions to the contingency fund based on the corrected version. Update the maintenance logbook / EUC and work priorities.

Documents to gather for a well-supported challenge

• Declaration of co-ownership and applicable by-laws.
• Plans and specifications, warranties, previous engineering or architectural reports, and dated photographs.
• Budgets, financial statements and work histories.
• Recent quotations received for the components concerned.
• Signed contract with the firm and correspondence.

For structured support for your board of directors (administrative, financial and operational management), see our Services pages: financial management, administrative management and operations management. You can also consult our blog for updates on Bill 16.

Remedies and responsibilities: professionals, compliance and follow-up

• Board of directors’ responsibility: even if the study was prepared by a third party, the board of directors must ensure that contributions to the contingency fund comply with the spirit of the Civil Code (adequate and predictable funding). If there is a significant discrepancy, it must initiate corrective measures.
• Professionals concerned: under Bill 16 and the regulations, the studies are prepared by competent and independent professionals (e.g., engineers, architects and technologists). In the event of serious professional misconduct, recourse is available through the professional’s respective order; consult a legal adviser before proceeding.
• Building compliance: for safety or quality-of-work issues, also refer to the guides published by the Regie du batiment du Quebec (RBQ), and incorporate the recommendations into your maintenance plan.
• Insurance: notify your insurer if the BCS reveals aggravating risks (e.g., recurring water infiltration). Challenging a study does not exempt the syndicate from taking temporary measures to mitigate a risk.

Effects on the budget, common expenses and selling a condo

An inaccurate CFS can lead to insufficient contributions for years, followed by a sudden special assessment. The purpose of challenging a study is to correct the funding path quickly, before the discrepancy becomes too costly for co-owners.

• Annual budget: anticipate a transition period (6 to 18 months) to correct the contribution to the contingency fund without creating an excessive shock to common expenses.
• Communication: present quantified scenarios at the annual general meeting (worst case, realistic case and prudent case), with a clear schedule. Transparency and clear explanations reduce resistance.
• Selling a condo: brokers and notaries are increasingly requesting the CFS/BCS and recent minutes. A challenged but corrected and well-documented study reassures the market. To understand the transaction perspective, see the OACIQ information on disclosure obligations in co-ownerships.

Consider publishing a plain-language summary of the CFS and work plan on your internal website to support potential buyers and reduce recurring questions for the board of directors. If you need a hand, contact us.

FAQ — challenging a CFS/BCS (Bill 16)

Q1. Can we refuse to pay contributions based on a challenged CFS?

A. No. Common expenses remain payable as long as the budget has been adopted in accordance with the declaration of co-ownership and the applicable rules. The purpose of challenging a study is to improve it and adjust the future budget, not to suspend payments.

Q2. What is the appropriate deadline for requesting corrections?

A. Act as soon as you receive the report. Ideally, complete the discussions and corrections before the next annual general meeting so that co-owners have a stable version to approve. Document everything in writing and keep the timelines realistic.

Q3. Who pays for the second opinion?

A. It depends on the contract and the seriousness of the deficiencies. If substantial errors are demonstrated, corrections at no cost may be negotiated. Otherwise, the syndicate often pays for a targeted second opinion. Assess the cost-benefit before issuing the mandate.

Additional sources:

• Relevant provisions of the Civil Code — LégisQuébec: https://www.legisquebec.gouv.qc.ca/fr/document/lc/CCQ-1991
• RGCQ (co-ownership resources and training): https://rgcq.org/
• RBQ (building maintenance and compliance): https://www.rbq.gouv.qc.ca/
• OACIQ (information for co-ownership sellers and buyers): https://www.oaciq.com/fr

This article provides general information and does not constitute legal advice. Consult a lawyer or notary regarding your situation.

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