What Are Condo And Co-Op Reserve Funds?
August 29th, 2008 By Peter G. Miller
Condos and co-ops collect money each month from owners to pay for current expenses. In addition, well-run properties also collect money each month to create a reserve fund, money set-aside for emergencies and big expenses.
The alternative to adequate reserve funds are “special assessments” levied against owners in times of emergency. For instance, if the roof blows off and it costs $10,000 per unit for repairs, that money can be obtained in the form of a “special assessment.” The special assessment is a lien against the property and if not paid can lead to foreclosure.
Condo and co-op buyers should always ask if special assessments are pending or being considered at the time of sale.
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