Although there is no difference between reserve and reserve fund, there is a distinction between an operating fund and a reserve fund. For an HOA, the reserve fund pays for the cost of major replacements and repairs of common elements in the future. As an example, if the roof of the clubhouse is set to reach the end of its useful life in 10 years, and the cost to replace it is $10,000, an association must set aside $1,000 per year so that it has the money to pay for the replacement when the time comes. In contrast, an operating fund consists of money an association uses to pay for day-to-day operating expenses. Regular expenditures tend to fall under this umbrella. Common examples of operating expenses for an HOA include office supplies, management fees, insurance premiums, cleaning fees, and the like.