Reserves are funds, other than operating funds, set aside for specific expenditures that will be incurred in the future. They are collected over the time from each unit owner to cover the cost of major replacements or repairs to the common areas’ components. These components include, but are not limited to:
- roof replacement,
- building painting,
- pavement resurfacing,
- any other item that has a deferred maintenance expense or replacement cost that exceeds $10,000.
Reserves may be waived or reduced only upon the vote of a majority of all non-developer voting interests. 718.112 F.S., however it is important to understand that without funded reserves, the Board of Directors can decide to levy a special assessment against the owners of each unit. These expenses are inevitable since any property is aging and will need major repair/replacement in the near or distant future.
It is often times difficult to save money for later, but it is easier to force yourself to do so knowing you are at risk of paying a substantial non-planned bill in the future. In addition, sufficient funds help maintaining the value of a community. When it comes to sell your condominium unit, a wise prospective buyer will most likely choose one in a community with proper reserves.
The vote is today? Think twice…