Good reply - but also your Certificate of Incorporation should also have a specified amount that must be kept in a reserve account and also if you have a mortgage you will also have to keep money in special account for that - I also agree that it is better to reserve for capital improvement than borrow - if you can set aside amount that is deducted for depreciation - that is noncash amount but could be put into reserve account for replacement - because all these things boilers, sidewalks, etc have to be repaired and replaced - Unfortunately in mine like so many coops they don't obey the law and don't understand and that is why buildings go bankrupt