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Law Educator, Esq.
Law Educator, Esq., Lawyer
Category: Real Estate Law
Satisfied Customers: 118108
Experience:  Licensed attorney practicing landlord-tenant, land use and other real estate law and litigation.
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How much should a Condo Home Owners Association keep in a "Reserve

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How much should a Condo Home Owners Association keep in a "Reserve Account"? I belong to a small condo association where total annual expenses for 2012 are $289,488. The management company keeps $724,000 in the Reserve account, invested in CD and Cash accounts.

Is that amount excessive??
Thank you for your question. I look forward to working with you to provide you the information you are seeking.

Under the law there is no maximum reserve an association can keep. Some associations specify their minimum reserve amount in their bylaws. If the bylaws do not specify, the general rule of thumb is 2-3 times the expenses should be held in reserve, since reserves are used for emergency needs of the association. The law does not specify the amount of reserves that they can have I am afraid.



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