Ask Nanci
How much should a condo association have in reserves?
Short Answer
A common benchmark is for an association's reserves to be funded at 70 to 100 percent of the amount its reserve study says is needed. Buildings funded well below that, especially under about 30 percent, are more likely to need special assessments for major repairs. The percentage matters less than the story behind it: what repairs are coming, when, and how they will be paid.
General information, not legal or financial advice.
What reserves are for
Reserves are the association's savings for big, predictable expenses: roof replacement, structural repairs, waterproofing, elevators, and other major components. Funding them monthly spreads the cost over years instead of forcing a giant bill on owners all at once.
A well-funded building keeps monthly costs steady, while an underfunded building tends to pair low fees with large surprises.
What a funded percentage means
The reserve study calculates a fully funded amount for each component. The funded percentage is what the association actually holds compared with that target. Around 70 to 100 percent is generally considered healthy; lower funding, especially below about 30 percent, means the building may rely on special assessments or loans when major work arrives.
These are guideposts, not guarantees. A building at 50 percent that recently funded big repairs may be in better shape than one at 80 percent facing an unexpected bill.
This is general information, not legal or financial advice.
The newer Florida rules
Florida law now requires buildings three stories and taller to complete structural integrity reserve studies and fund critical components like the roof, structure, waterproofing, and electrical. Owners can no longer waive those reserve contributions, so funded percentages have become more meaningful and more visible to buyers.
The result is that many buildings are raising fees to catch up, which is why the funded percentage is such an important number to review before you buy.
What to ask the association
Ask how the reserves compare with the reserve study, what percentage is funded, what major repairs the study identifies in the next five years, and whether the budget covers them. Meeting minutes and financial statements confirm the honest answer.
Also ask when the next reserve study is due and whether a milestone inspection has identified work. Together those answers sketch the building's real financial picture.
How Nanci can assist
I walk buyers through the association's numbers before they make an offer, so a building's financial health is part of the decision. A healthy building keeps your monthly costs predictable and your investment protected.
You should never learn about a building's finances after you move in. We learn them together before you commit.
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