Funding A Condominium Project

Beginning September 1, 2000, all new condominiums and existing ones are obliged to a have a reserved fund in order to cover the maintenance and repair expenses of the common property. The amount of money needed will be determined by a reserve fund study report. Condominium corporations are given two years to get hold of a reserve fund study and prepare and support a plan for funding the reserve fund. If in case a corporation has done a reserve fund study in the last five years, the board is required to review the report and approve a reserve fund plan.

Information that is needed to be in the reserve fund study report are: the common property that need to be repaired or restored within the next 25 years, the actual present condition of the property and the approximate amount of the property that need to be replaced or repaired, an assessment of the costs of repair of the property or the amount for replacement, the number of years that the component will be useful once it is repaired or replaced and lastly the recommended amount of money to be added to the reserve fund.

The reserve fund must be separated from other general operating fund of the corporation and should be kept safe. It must have a separate bank account under the name of the corporation or in same investments acknowledge by the Trustees Act.