Operating Fund

Under the Strata Property Act, SBC 1998, c. 43, the Operating Fund is the strata corporation's account for paying day-to-day expenses that usually occur either once a year or more often than once a year—such as insurance premiums, utilities, management fees, landscaping, and routine maintenance (s. 92). It is funded primarily through monthly strata fees (contributions) set in the annual budget approved by owners at the annual general meeting (s. 103). This fund is distinct from the Contingency Reserve Fund, which is for major repairs and replacements. Verify current details with a BC lawyer or notary before acting.

Section 92 of the Strata Property Act, SBC 1998, c. 43, provides that the Operating Fund is used for common expenses that usually occur either once a year or more often—including insurance, utilities, management, landscaping, and routine maintenance. Expenses that occur less often than once a year, such as roof replacement or major repairs, are typically paid from the Contingency Reserve Fund under s. 93. The strata's approved annual budget (s. 103) itemizes which expenses are allocated to each fund. Verify the treatment of any specific expense with a BC lawyer or notary before acting.

Under s. 103 of the Strata Property Act, SBC 1998, c. 43, the strata council must prepare an annual budget showing the estimated Operating Fund and Contingency Reserve Fund expenses for the next fiscal year, and this budget must be approved by a majority vote of owners at the annual general meeting (AGM). Once approved, owners must pay the monthly strata fees (contributions) set out in that budget (s. 99). If the proposed budget is not approved, the previous year's budget continues until a new one is passed (s. 103(3)). Verify current procedures with a BC lawyer or notary before acting.

Once the annual budget is approved by owners under s. 103 of the Strata Property Act, SBC 1998, c. 43, the strata council has authority to spend Operating Fund money on the expenses itemized in that budget (s. 92). Expenditures significantly outside the approved budget categories, or in excess of the budgeted amounts, may require a separate resolution at a general meeting (s. 108). For unapproved or emergency expenses, verify current rules and council authority limits with a BC lawyer or notary before acting.

If the Operating Fund is insufficient, the strata corporation may pass a special levy under s. 108 of the Strata Property Act, SBC 1998, c. 43, by a 3/4 vote at a general meeting, to raise the additional funds needed. Alternatively, the strata may be able to borrow money under s. 114 (which also generally requires a 3/4 vote and compliance with regulation limits). The strata cannot simply transfer money from the Contingency Reserve Fund to the Operating Fund without owner approval (s. 96). Verify current options and voting thresholds with a BC lawyer or notary before acting.

The Strata Property Act, SBC 1998, c. 43, and the Strata Property Regulation do not set a minimum dollar or percentage balance that must be maintained in the Operating Fund at all times. Section 92 requires that the Operating Fund be used for expenses that occur at least once a year, and the annual budget (s. 103) determines the amount collected through monthly strata fees. Many strata corporations aim to maintain a working balance sufficient to cover regular monthly expenses and avoid cash-flow shortfalls, but the specific amount is determined by each strata's budget and financial planning. Verify reserve and operating fund planning with a BC lawyer, notary, or strata manager before acting.

For a principal residence, monthly strata fees paid by an owner are generally not deductible for income tax purposes under the federal Income Tax Act. If the strata unit is a rental property, the portion of strata fees that relates to Operating Fund expenses (routine maintenance, utilities, insurance, etc.) may be deductible as a current expense, while special levies for capital improvements may be added to the property's cost base. The tax treatment depends on the use of the property and the nature of each expense. Verify current federal and provincial tax rules with a licensed tax professional or accountant before acting.

Section 96 of the Strata Property Act, SBC 1998, c. 43, permits the strata corporation to transfer money from the Contingency Reserve Fund to the Operating Fund only by a resolution passed by a 3/4 vote at a general meeting. Transfers in the opposite direction—from Operating Fund to Contingency Reserve Fund—are not expressly restricted by s. 96, but prudent practice and legal interpretation suggest such a transfer should also be approved by owners at a general meeting, particularly if it affects the approved budget (s. 103). Verify current interpretation and best practices with a BC lawyer or notary before acting.

Under s. 59 of the Strata Property Regulation, BC Reg. 43/2000, when an owner (or purchaser) requests a Form B Information Certificate from the strata corporation, the certificate must include the balance of the Operating Fund and the Contingency Reserve Fund as of the date stated on the certificate. This disclosure helps purchasers and their lawyers assess the strata's financial health before completing the purchase. There is a fee for issuing the certificate, set by bylaw or regulation. Verify current certificate requirements and fees with a BC lawyer or notary before acting.

Under ss. 92 and 93 of the Strata Property Act, SBC 1998, c. 43, the Operating Fund is for common expenses that usually occur once a year or more often (insurance, utilities, management, routine maintenance), while the Contingency Reserve Fund (CRF) is for common expenses that occur less often than once a year and for expenses that usually occur more than once a year but are expected to have a useful life longer than one year—such as roof replacement, building envelope repairs, and major equipment replacement. Section 94 requires the CRF to be funded by contributions of at least 10% (as of 2026-07-27 — verify current) of the total annual budget contribution to the Operating Fund, unless an exemption or different percentage is approved by owners. Verify fund allocation and CRF requirements with a BC lawyer or notary before acting.