Condominium corporations are required to establish and maintain a reserve fund to cover the costs of major repairs to or replacement of their capital property.
To determine how much money a condominium corporation should have in its reserve fund, a reserve fund study, report, and plan must be completed by the corporation every five years.
Reserve funds must be held in separate accounts, and cannot be mixed with the corporation’s operating funds. Money from a corporation’s reserve fund also cannot be mixed with any other corporation’s reserve fund or with any other money.
It is important for both unit purchasers and unit owners to understand the importance of the reserve fund and what to look for in the reserve fund study, reserve fund report, and reserve fund plan.