QUESTIONS and ANSWERS - CONTINGENCY FUND
As we neared completion of the construction project, we each put money into a joint contingency fund. We used this to cover joint expenses such as appliance purchases, lighting fixtures, additional expenses associated with the construction itself (e.g. kitchen upgrade) and legal fees. We forgot to include land transfer taxes in our planning (!!) so the amount we had to contibute was a bit more than any of us planned. Still it wa manageable.
We hope to build this fund up through small contributions each month. There are still things we need/want to do with the property. Landscaping has to wait until spring as does paving the driveway. We also wants to have enough available to cover any unexpected expenses and to eventually cover things like roof replacement if we are all around in 20 years.
Because the house is virtually new we don’t anticipate any major expenses but we all agree that building up a fund over time is the right approach thather than asking anyone for a sudden major contibution if something come up.
This fund covers accumulated wear and tear on the house so it would not be refundable when an owner sells out. It wouldn't be fair to bail out and take back your contribution the year before the roof needs to be replaced!