How do repairs and replacement reserves work?

At their core these are emergency funds that are included in your real estate ownership plans. To save you the hassle of budgeting for uncertain yearly repairs, our system prepares you and the other co-owners for most eventualities. The collected funds go towards big projects that maintain the home and therefore benefit all owners. The account is similar to how property taxes can be used to cover the costs of neighborhood maintenance, but on a smaller scale and with more control over how the funds are used. Reserve accounts contain liquid funds for emergencies that get used only when authorized by the ownership group through voting, or by Secconda when covering repairs and maintenance. The account is funded by all co-owners through monthly deposits, which may fluctuate depending on the needs of the home. The fees cover the labor and services needed to maintain the home in top-notch state.

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Which repairs qualify?

Most home repairs are funded through the reserve account, with the exception of damage caused by misuse, which is then the responsibility of the owner who misused the home. Covered expenses include long-term improvements, restoration from regular wear and tear, and major repairs. The funds can also cover emergency costs that are not addressed by insurance, such as certain types of inclement weather.

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Why do fees fluctuate?

The monthly fee sent to the reserve fund may fluctuate according to the needs of the property. Damage from natural phenomena such as wood damage from a tropical storm may temporarily raise the monthly fee. Granted that they are not the most costly, for most unexpected events, the fee will not fluctuate, as the reserve funds will be available.

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How much money should be in a reserve account?

The total value of the reserve funds may fluctuate as well depending on the anticipated cost of repairs and projects intended or believed. Other factors such as location or weather might influence the payable amount. Aside from how much is put into the account, usually these are accounts that grow interest over the years.

When does Secconda allocate reserve funds?

Secconda only uses the funds found in the Property Company co-ownership group’s bank account when there is a need for specific home maintenance and repairs. Secconda will only allocate funds from the account for repairs, while major upgrades will often require a vote from the co-owners. Furthermore, if a co-owner identifies an aspect of the home that may need addressing, they can call on a vote to decide whether that issue should be tackled with reserve funds. Owners may vote to replace life-limited appliances such as washers, fridges, or even entertainment systems. Reserve funds can also be used for new projects, such as modernizing the irrigation system or introducing new smart-home technology.

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Difference between reserve funds and home operating costs

While some maintenance needs may be scheduled on a multi-month, annual, or multi-year basis, repair or restorative needs may be more spontaneous and unexpected. Routine maintenance needs can be covered without having to call for a vote, saving your precious time and energy and keeping the home ready for your next stay.The day to day operating costs of the home such as property management, daily upkeep, cleaning, taxes, and more are passed along to the co-owners transparently and in proportion to the shares owned. The reserve fund fee is likewise billed.

The reserve funds kept for all Secconda co-ownership groups under their Property Company's bank account is an essential component of the Secconda experience that helps our clients rest assured knowing that their home will be in the best shape possible whenever they stay at it.

To learn more please visit our FAQs.