Real Estate Glossary

What is Replacement Reserve Fund?

A Replacement Reserve Fund is a fund set aside by a property owner or association for the purpose of replacing major components of the property in the future. This can include things like a new roof, new HVAC system, or other costly repairs. The fund is typically built up over time through regular contributions, such as monthly fees paid by the property owners. This way, when the time comes to replace these items, the funds will already be available and the cost will not have to be borne by the property owners all at once.