Reserve funds are one of the most important but least understood parts of condo and co op financials. These funds are set aside for major repairs and capital projects. When reserves are low, owners often face special assessments or sharp increases in monthly charges.

Understanding reserves helps buyers avoid financial surprises.

What Reserve Funds Are Used For

Reserve funds typically cover:

• Roof replacement

• Boiler and mechanical upgrades

• Elevator repairs

• Masonry and facade work

• Plumbing and electrical infrastructure

Healthy reserves allow buildings to handle these expenses without emergency assessments.

Why Low Reserves Matter

When reserves are thin:

• Buildings rely on special assessments

• Monthly charges increase sharply

• Financing becomes harder for buyers

• Deferred maintenance accelerates

Lenders often review reserves as part of loan approval, especially in condos.

What Buyers Should Review

• Current reserve balance

• Recent capital projects

• Planned future repairs

• History of assessments

• Budget trends over multiple years

Strong reserves signal good long term management.

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Joseph Ranola | Five-Star Staten Island & South Brooklyn Realtor® (30 + Google reviews)
Associate Broker · Matias Real Estate | Founder · Bridge & Boro Team
Serving 103xx and 11209 / 11214 / 11228 | $25 M + closed volume
📞 917-716-1496 | ranolarealestate.com