Definition
The portion of the budget set aside each period to build the reserve fund for future major repairs.
The reserve contribution is the amount the association budgets each year (funded through dues) to build its reserves toward future replacements. A reserve study recommends the right level.
Treating the reserve contribution as a required budget line — not the number that gets cut when dues feel high — is what keeps a community funded and protects it from special assessments. Underfunding this line is the most common path to a future financial shock.