Question:
Is there a set amount or percentage that a condominium should have in their reserve fund?
– Karen
Answer:
The amount that you should have in your reserve fund largely depends on your specific HOA’s needs and requirements. To determine how much to fund in your reserves, it is best to conduct a professional reserve study. This study will inspect your assets and estimate their remaining useful life as well as the cost to repair or replace them in the future. This study will also calculate how much you need to have in your reserves, including a plan for funding over the next years.
As a rule of thumb, it’s a good idea to have a reserve account that’s at least 70% funded at any given time. However, your governing documents may have more specific or stringent requirements.
To learn more about reserve funds and reserve studies, here are some resources:
Disclaimer: We are not lawyers. The information provided on this website does not constitute legal advice.
