What types of accounts does an association typically use?
There are a few types of accounts, or funds, used by a community association. An Operating account is a financial fund that’s used to pay for the services that carry out everyday functions of a community. This includes items such as:
- Legal Fees
- Contracted services
- Maintenance of common areas
- Association management
- Insurance and taxes
- Utility expenses
Another type of account, or fund, used by community associations is a Reserve account, which is basically a saving account that holds money set aside each year to cover the future replacement of capital items (items such as asphalt, fences, landscaping, sidewalks, painting, emergency repairs, emergency maintenance, or other unforeseen circumstances).