What are Reserves?
Reserves are monies that a condominium board collects regularly from owners to pay large, future expenses which result from the deterioration of the condominium project over time – for example, the costs of repairing or replacing the roof, elevators or any other common area.
Insufficient reserves can lead to special assessments, borrowing of funds, or deferring necessary repairs or maintenance of the common areas. A board that does not assess the owners regularly for reserves must make periodic special assessments for money to pay for large expenses; it goes without saying that this may pose a financial hardship to some owners who must pay a special assessment in addition to monthly maintenance fees.