Replacement Fund

    Various items in a building need to be replaced on a regular basis. They may not be considered appropriate for the Reserve Fund but do constitute expenditures that need to be budgeted. Items such as appliances, lobby furniture, maintenance equipment and many other items make up this category. A Replacement Fund may be established to meet these expenditures. How such a fund is used should be clearly established by the Board of Directors of the Life Lease complex. Some complexes accommodate the replacement costs within the annual operating budget, some use the Reserve Fund for these costs and others have a separate replacement fund.