An HOA reserve fund is money that homeowner associations use to pay for repair and replacement of common property. This is different than routine maintenance; it’s capital items that could include a new roof, road repaving, fence replacement, etc.

Each owner contributes to the reserve fund on a regular basis via a portion of the HOA fees. Basically, a reserve fund acts as a savings account that the association can dip into for planned capital upgrades or unexpected expenses. Ideally, if the clubhouse roof needs replacing or the pipes burst in the laundry room, the HOA will have enough money to pay for repairs or replacement from the reserve fund 

If your HOA doesn’t have enough saved up in its reserve fund (either due to poor planning or an unusually large cost), the board may vote to require all homeowners in the community to pay what is called a special assessment to cover the costs. Before moving into an HOA community, be sure to read the CC&Rs to see if there are any restrictions on how often or for how much the association can impose a special assessment, as usually there aren’t!  

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