Direct answer
What does Reserve fund mean?
Money set aside for future major repairs, replacements, emergencies or other planned property needs.
Exam cue: A reserve plan should connect expected component life, projected cost and funding decisions.
What does it look like in a question?
New York example
A building sets aside funds each year for an eventual elevator modernization.
Common exam trap
What should you not confuse it with?
A reserve is not the same as current operating income available for any purpose.
Related property management terms
Capital improvementA significant addition or replacement that extends useful life, increases value or adapts property to a new use, depending on the accounting and tax context.EvictionA legal process used to recover possession from a tenant under applicable grounds and court procedures.Management agreementA contract authorizing a property manager to perform stated services for an owner.Operating budgetA plan of expected property income and operating expenses for a future period.Preventive maintenancePlanned inspection and service intended to reduce breakdowns, hazards and more costly repairs.Security depositMoney held to secure a tenant's performance under a lease and governed by the applicable lease and law.
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