Reserve fund
Money saved each month against future major works. A community with enviably low dues is often one that is not saving, and the bill arrives later.
Financial terms in this field mean different things in different communities, so treat every one of them as a question rather than a definition. Ask for the paragraph in the agreements, ask what the figure was last year, and ask what happens to a member who cannot pay. A community that answers all three from memory has a working economy; one that answers none has an intention.
A reserve fund — sinking fund, capital reserve, depreciation account, the names vary — is money collected monthly and held against work that is certain to be needed and uncertain in its timing. Roofs, boilers, resurfacing, the septic system, the lift.
It is the least visible part of a community’s finances and the most predictive.
Why the low-dues community may be the expensive one
The best budget data available in this field, from a study of 20 American cohousing communities comprising 611 units, found that roughly a third of the average annual budget goes into savings rather than being spent that year.
Read that against a community advertising unusually low monthly charges. Either it owns very little in common, or it is not funding its reserve — and a roof does not stop ageing because nobody budgeted for it. The money is not saved; it is deferred, and it returns as a special levy that lands on whoever happens to be a member that year.
What to ask
Three questions, and a community with its house in order answers all three without looking anything up.
What is in the fund now? A number, not a reassurance.
When was it last reviewed, and against what? The good answer names a survey or a schedule of major works with dates and estimated costs. The weak answer is “we put a bit aside”.
When did you last raise a levy, and how much was it? “Never” is a good answer only from a community old enough to have needed one.
Sources & further reading
- 1 What joining costs — where the monthly money actually goes
- 2 Cohousing Costs After You Move In — Cohousing Now! (Coho/US) — the budget analysis the one-third figure comes from
Written by EcoHubs members, with AI assistance for drafting and editing, and reviewed by a person before publication. Facts are checked against the sources listed; anything we could not verify is marked. How this is written
Related terms
A one-off charge on every household for work the regular budget cannot cover. The bill that tests whether a community's finances were real.
The written rules a community has consented to. Distinct from values: agreements say what happens, and what follows when it does not.
The shared building at the centre of a cohousing project, usually a large kitchen and dining room plus what homes were built small enough to do without.