A common question from condo boards is whether submetering affects the reserve fund study. The answer depends on who owns the metering equipment and who is responsible for maintaining it.
In most submetering arrangements with a licensed USMP, the provider owns and maintains the metering equipment. The corporation does not purchase the meters and does not have a maintenance obligation. In this scenario, the metering equipment typically does not need to be included as a reserve fund component.
However, every condominium corporation is different. Boards should confirm the ownership and maintenance arrangement with their USMP provider, discuss the arrangement with their reserve fund planner, and review the contract terms to ensure there is clarity about end-of-term equipment disposition.
If the corporation does own the metering equipment (which is less common), then the reserve fund study should include provisions for meter replacement, calibration, and maintenance over the life cycle of the equipment.
From a financial planning perspective, submetering may have a positive indirect impact on the reserve fund. By shifting in-suite electricity costs to individual residents, the corporation may see reduced operating expenses. This can free up budget for other priorities, though it does not directly affect the reserve fund itself.
Boards preparing for a reserve fund study update should provide their planner with the submetering agreement, clarify equipment ownership, and explain the billing arrangement. This ensures the study accurately reflects the corporation's obligations.