Reserve funds explained
A development has its own ‘Reserve Fund’ in order to help contribute towards the cost of repairs, redecorations, etc that are over and above the annual expected budget.
The money is collected on a yearly basis to grow until it is needed, and hopefully when extra expenses are incurred there will be enough in the reserve fund to cover the costs and save additional service charges needing to be collected. The money is held in the same trust account as the other service charge funds, any interest generated being put into the reserve fund. This money can only be used within the development.