Capital Reserve

Capital reserves detail an amount owed to a timeshare after the deed has been paid for, in order to cover potential repair or renovation costs in the future.

This amount is normally determined at the same rate of interest as prior to the property being fully paid. This charge normally replaces the maintenance fees on your invoice once the entirety of the loan has been satisfied.

This reserve is accrued for the sake of possible improvements or repairs to the property in the future, none of which have been planned or yet occurred. Buildings with more stable reserve funds available tend to have higher quality units and this can enhance the value of the property and make the appearance more attractive to prospective owners.

This is used to enact repairs and assessments for reserves that may come about such as leaks, broken elevators, etc. These are extraneous costs for the property that may be levied against the collective ownership of the property to build up a surplus for the property’s reserve.

If you have any additional questions on capital reserves and how they apply to your timeshare ownership, feel free to contact us to speak with a licensed agent.

Related Terms: