What is a reserve fund used for in a condominium?

A reserve fund in a condominium is specifically designated for saving money to cover future repairs and maintenance needs. This fund is crucial because it ensures that there are adequate financial resources available to address significant issues that may arise over time, such as roof repairs, elevator maintenance, or updating essential systems within the building. By having a reserve fund, the condominium corporation can avoid sudden increases in fees or special assessments when large-scale repairs are necessary, as the money has already been set aside for these anticipated expenses.

Using the reserve fund appropriately allows for the long-term financial stability of the condominium, ensuring that the property is well-maintained and that unexpected costs do not burden the individual owners disproportionately. The other options do not align with the primary purpose of a reserve fund: day-to-day operational costs and funding for special events are typically managed through the annual operating budget, while temporary financial assistance does not fall under the intended use of reserve funds, which are strictly earmarked for capital repairs and maintenance planning.