Association-governed communities come in all types, shapes, and sizes. They may be known by different acronyms — Condos, Co-Ops, HOAs, POAs, or PUDs — and residents choose to live there for a variety of different reasons. One of those reasons is having affordable access to amenities related to leisure activities. This can include a pool, a fitness facility, tennis courts, playgrounds, parks, golf course, and more. And keeping these desirable community features up to date and well-maintained over the years requires a predictable amount of capital. This capital is called the Reserve Fund.
Having an adequate condo Reserve Fund means that your facilities are able to be repaired when something breaks. If the paint on the buildings is starting to peel, or the asphalt in the parking area is developing cracks or the tennis court fence needs to be replaced, those items would be paid using Reserve Funds.
But how much reserves should a condo HOA have? How can managers and board members know if the amount of Reserves is enough to cover inevitable repairs down the road? Just like all other Association-governed communities, condos benefit tremendously from having an adequate Reserve Funding Plan in place.