Financial Management of Community Associations | Budgets and Replacement Reserves -Part 4 : Reserve Account/Reserve Funds

The reserve account consists of funds put aside in “reserve” for the replacement of major components of a community’s common property (aka “assets”). Typically the reserve account is used to replace asphalt paving, concrete sidewalks, roofs, central heating and cooling plants, swimming pool, tennis courts, elevators, and many other property components. Revenue raised for adding a major item will be a major improvement expense; revenue raised for replacing that item when it deteriorates will come from the reserve account.    Read the article……………………

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