The community reserve fund: the legal minimum
Spanish law requires every community of owners to maintain a reserve fund of at least ten per cent of its most recent ordinary annual budget, held to meet conservation and repair works on the building.
gelisted editorial team · Updated 15 August 2026
The short version
- The legal minimum is 10 % of the last ordinary annual budget.
- The fund may only be used for conservation, repair and related works.
- It can also fund the building insurance premium and maintenance contracts.
- A fund at the bare minimum usually means future special levies.
The reserve fund balance is the single most informative number in a community's accounts, and almost no buyer asks for it.
What the law requires
The fund must be endowed with at least 10 % of the last ordinary budget and belongs to the community, not to individual owners. An owner who sells cannot withdraw their share. It may be used for works of conservation, repair and rehabilitation of the property, and to meet the premium of the building insurance and permanent maintenance contracts.
| Use | Permitted | Note |
|---|---|---|
| Roof or facade repair | yes | conservation works |
| Lift replacement | yes | rehabilitation |
| Building insurance premium | yes | |
| Permanent maintenance contracts | yes | |
| Improvements not needed for conservation | no | requires separate approval |
| Refund to a departing owner | no | belongs to the community |
| Legal minimum | 10 % of the budget | |
| Prudent level for an older block | 30 to 50 % of the budget |
Why the minimum is rarely enough
On a community with an annual budget of 60,000 €, the legal minimum reserve is 6,000 €. A facade repair on a 40 unit block near the sea runs to 120,000 € or more, and a lift replacement to 30,000 € per lift. The fund covers a fraction, so the balance is met by a special levy. A community that holds only the minimum is not breaking the law; it is deferring the cost onto whoever owns the flats when the works fall due.
What it tells a buyer
A well funded reserve suggests a community that plans, maintains and votes for the building rather than for the lowest possible monthly fee. A reserve at the bare minimum in a block built 40 years ago on the coast, where salt air attacks the structure, is a signal that a levy is coming. Between 2 similar apartments, the one in the better funded community is often the cheaper purchase over 10 years.
The minutes will usually reveal whether a technical building inspection has been carried out and what it recommended.
Questions to ask the administrator
What is the current balance of the reserve fund. What percentage of the budget does it represent. When was the last major works project and what did it cost. Has a technical inspection of the building been carried out and what did it find. And is any levy approved, budgeted or under discussion. Five questions, answered in one email, that reveal more than a second viewing.
Frequently asked
+How large must the reserve fund be?
At least 10 % of the community's most recent ordinary annual budget.
+What can it be spent on?
Conservation, repair and rehabilitation works, plus the building insurance premium and permanent maintenance contracts.
+Do I get my share back when I sell?
No. The fund belongs to the community, not to individual owners.
+Is the legal minimum enough?
Rarely. A facade project on a 40 unit block can exceed 120,000 €, far above a minimum reserve.
+What should I ask the administrator?
The current balance, the last major works, whether a technical inspection was done and whether a levy is planned.
Sources
- 1Boletín Oficial del Estado, BOE (August 2026)
- 2Govern de les Illes Balears, Govern de les Illes Balears (August 2026)