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Reserve Fund Investment

July 03, 2015
Reserve Fund Investment, Larlyn Property Management

DOES YOUR CORPORATION HAVE AN INVESTMENT STRATEGY?

A reserve fund is essentially a savings account or insurance policy for replacement and major repairs that may come up in the future. NOTE: This fund is not for upgrades, maintenance or regular repairs that result from normal wear and tear.  A professional study is performed by engineers so that educated decisions can be made about what type of expenses may arise and when money will most likely need to be available to fund those expenses.

Rather than simply leaving these funds in a bank account, many corporations choose to invest the money to take advantage of maximizing return on the corporation’s money.  A reserve fund investment strategy is more likely to better manage the corporation’s funds and if the reserve is properly funded, eliminate special assessments.

Careful precautions are taken when selecting an investment vehicle to protect the funds avoiding risk yet still reaping the benefits of investment.   A qualified advisor with experience in dealing with condominium corporations familiar with legal requirements of these investments according to the provincial acts should be retained.   Larlyn’s VIP Program offers special programs designed to:

  • Maximize Income Growth with rates equivalent to Long Term Investments but access to funds remains flexible to accommodate unexpected withdrawals.
  • Preserve Capital in Government-Guaranteed Investments
  • Provide expert advice without bias, superior products and added security including the drafting of the corporation’s Investment Policy

We have discussed the role of the Board of Directors in previous articles.  They maintain full decision making authority and set the policy of the Corporation on matters affecting enforcement of its By-Laws.  They direct the activities of the Management Company if they choose to hire one for administrative support and advice.  The Board of Directors also maintains full control of the corporation’s reserve fund investments.