Reserve Fund in Homeowners Associations: What It Is, How Much It Should Be and What It's For

## Reserve Fund in Homeowners Associations: What It Is, How Much It Should Be and What It's For The **reserve fund** is one of the least known — and most neglected — legal obligations of homeowners associations in Spain. Yet its existence can make the difference between handling an urgent repair without drama or having to call an emergency special assessment that nobody saw coming. --- ### What is the Reserve Fund? The reserve fund is a mandatory financial provision that every homeowners association must maintain to cover building conservation, repairs or improvements. It is not optional — the Ley de Propiedad Horizontal (LPH) requires it. **Legal basis: art. 9.1.f) LPH** The association must hold a reserve fund "whose ownership belongs to the community." --- ### How Much Must the Reserve Fund Hold? The LPH establishes that the reserve fund must be at least **10% of the annual ordinary budget**. **Practical example:** If your community has an annual budget of €60,000, the reserve fund must hold at least €6,000. --- ### What Can the Reserve Fund Be Used For? The reserve fund may only be used for: 1. **Conservation and repair works** (roof, facade, common installations). 2. **Accessibility works** required by law. 3. **Building insurance** for the community. 4. **Replacement or repair of common elements** (lift, boiler, water pumps). --- ### What Happens if the Reserve Fund Is Insufficient? If the fund doesn't cover an unexpected expense, the community has two options: approve a special assessment or apply for a bank loan for communities. --- *IgeraFincas tracks the reserve fund balance in real time, alerts when it approaches the legal minimum and generates the report for the AGM with one click. [See how it works →](/igerafincas)*