Replacement Reserve Fund

Replacement Reserve Fund – A funds set aside for the long term replacement of major capital expenditure projects such as roof replacement, repaving, elevator replacement, etc.

  • Example: When purchasing a home in a condo or PUD, make sure and check on the HOA’s financial standing, particularly its replacement reserve fund because if that is not properly funded, the property owners could be looking at a large special assessment in the future when large systems need to be replaced.
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