What’s a condo reserve fund and why is it important?

In this article, the Condos.ca Staff explains what a condo reserve fund is and why it is important. The reserve fund is essentially an emergency savings account that the condo corporation uses for big repairs or lawsuits. A percentage of maintenance fees goes towards building it up. If there isn't enough money in the fund to cover an expense, owners may be required to pay a one-time special assessment fee that can be very costly. To determine if a condo has a healthy reserve fund, a buyer's real estate lawyer can look at the building's status certificate. A failing grade may result in a buyer walking away or buying with their eyes open, while some investors may see it as an opportunity to buy at a lower price.