Condo buyers ask me all the time about monthly maintenance fees and what exactly they cover. Generally, these fees will cover exterior maintenance (excluding windows), lawn care, snow removal, trash removal, and in some cases, water, sewer, heating, and electricty are covered as well.
However, one other thing they cover that’s not talked about often is the reserve fund. It’s like the savings account for the association. You want to see the reserve fund to be at least 70% funded. They’re trying to get to a number that will cover all the capital expenditures in the future. With the help of the management company, they determine what things like replacing the roof, driveways, and other things will cost. They want to have enough money budgeted for those items and the only way they’re going to save up that much is by putting a portion of your maintenance fee each month towards it.
Experts have determined that if that the reserve fund is funded at less than 70%, the association is probably going to come back to you and ask for a “special assessment” so they can replace what’s needed. It’s a very important consideration to make for homebuyers.
If you have questions for me about buying a condo or anything else related to real estate, feel free to reach out via phone or email. I look forward to hearing from you soon.