What is a reserve fund and does my condo or HOA need one? We get asked these questions all the time, and the answers are yes. To better understand the complexity of a reserve fund, we invited reserve specialist, Peter Miller, of Miller Dodson Associates, Inc., in Annapolis, Md., to share his thoughts.
According to Miller, a reserve fund is money set aside each year as part of the normal budget so that you’re saving money for the replacement and major repair of the components of the association that are called common elements, those things the association is responsible for maintaining and replacing.
In a condominium community, it would be the roof, the exterior walls, any mechanical systems, parking lot, sidewalks, things of that nature. In an HOA, it would be the site features such as a clubhouse, pool, or recreation facilities.
How much reserves do you need? Click on the video below to find out.
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