Reserves are money which a condominium board collects regularly from owners to pay large, future expenses which result from the deterioration of the condominium project over time - for example, the costs of repairing or replacing the roof and elevators. A board which does not assess the owners regularly for reserves must make periodic special assessments for money to pay for those large expenses. The reserves law requires more than just reserves - it requires that the association follow a budget process, beginning on January 1, 1993. Therefore, the budget the association develops and adopts in 1993 to comply with the reserves law will be for the financial year beginning in January 1994. The association must include reserves in the budget developed in 1993 but will not have to begin collecting those reserves until 1994.
Every condominium is different and has different expenses and reserve requirements.
Therefore, no specific dollar amount can be given for any condominium. At present, the association has no money to do the work. The board needs to collect only enough to ensure the association has the necessary amount at the end of ten years. The roof will still be 5 years from replacement, so the association will still have 5 years to collect the necessary funds. Predicting either inflation or interest earned for years into the future may be difficult.