KeithT1 (Florida)
Posts: 4
Posts: 4
Posted:
can the board of directors borrow money from the reserve funds whenever they chose? Does it not take a vote of the owners
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borrowing from reserves in FL
Started by KeithT1 • 4 replies • 6197 views
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JanetB2 (Colorado)
Posts: 4,219
Posts: 4,219
Posted:
Hi Keith:
The reserve fund is supposed to be utilized for items in the budget for noted capital expenditures or deferred maintenance. To my knowledge HOA statute 720 does not address; however, the condo statute states:
718.112 Bylaws.—
(f)Annual budget.—
3. Reserve funds and any interest accruing thereon shall remain in the reserve account or accounts, and shall be used only for authorized reserve expenditures unless their use for other purposes is approved in advance by a majority vote at a duly called meeting of the association. Prior to turnover of control of an association by a developer to unit owners other than the developer pursuant to s. 718.301, the developer-controlled association shall not vote to use reserves for purposes other than that for which they were intended without the approval of a majority of all nondeveloper voting interests, voting in person or by limited proxy at a duly called meeting of the association.
Therefore, if you are a condo then yes if the money is being used for a different purpose than budgeted, a majority vote of owners is required in advance. If it is being used to pay for budgeted expenditures as noted for the reserve account, then no vote is required.
The reserve fund is supposed to be utilized for items in the budget for noted capital expenditures or deferred maintenance. To my knowledge HOA statute 720 does not address; however, the condo statute states:
718.112 Bylaws.—
(f)Annual budget.—
3. Reserve funds and any interest accruing thereon shall remain in the reserve account or accounts, and shall be used only for authorized reserve expenditures unless their use for other purposes is approved in advance by a majority vote at a duly called meeting of the association. Prior to turnover of control of an association by a developer to unit owners other than the developer pursuant to s. 718.301, the developer-controlled association shall not vote to use reserves for purposes other than that for which they were intended without the approval of a majority of all nondeveloper voting interests, voting in person or by limited proxy at a duly called meeting of the association.
Therefore, if you are a condo then yes if the money is being used for a different purpose than budgeted, a majority vote of owners is required in advance. If it is being used to pay for budgeted expenditures as noted for the reserve account, then no vote is required.
JanetB2 (Colorado)
Posts: 4,219
Posts: 4,219
Posted:
Hi Keith:
Guess that is what I get for reading through the statutes too fast … did find same type info in HOA statute after looking through again, so it does apply to both HOA and condos.
720.303 Association powers and duties; meetings of board; official records; budgets; financial reporting; association funds; recalls.—
(6)BUDGETS.—
2. (h) Reserve funds and any interest accruing thereon shall remain in the reserve account or accounts and shall be used only for authorized reserve expenditures unless their use for other purposes is approved in advance by a majority vote at a meeting at which a quorum is present. Prior to turnover of control of an association by a developer to parcel owners, the developer-controlled association shall not vote to use reserves for purposes other than those for which they were intended without the approval of a majority of all nondeveloper voting interests voting in person or by limited proxy at a duly called meeting of the association.
Guess that is what I get for reading through the statutes too fast … did find same type info in HOA statute after looking through again, so it does apply to both HOA and condos.
720.303 Association powers and duties; meetings of board; official records; budgets; financial reporting; association funds; recalls.—
(6)BUDGETS.—
2. (h) Reserve funds and any interest accruing thereon shall remain in the reserve account or accounts and shall be used only for authorized reserve expenditures unless their use for other purposes is approved in advance by a majority vote at a meeting at which a quorum is present. Prior to turnover of control of an association by a developer to parcel owners, the developer-controlled association shall not vote to use reserves for purposes other than those for which they were intended without the approval of a majority of all nondeveloper voting interests voting in person or by limited proxy at a duly called meeting of the association.
KeithT1 (Florida)
Posts: 4
Posts: 4
Posted:
this is a condominium association, not a homeowners assoiciation, still need to know if the board can borrow from the reserves
JanetB2 (Colorado)
Posts: 4,219
Posts: 4,219
Posted:
Hi Keith:
The first post I made was Condominium and which answers your question as follows:
3. Reserve funds and any interest accruing thereon shall remain in the reserve account or accounts, and shall be used only for authorized reserve expenditures unless their use for other purposes is approved in advance by a majority vote at a duly called meeting of the association.
For reserves to be used for other purposes than originally designated requires advance member approval.
The first post I made was Condominium and which answers your question as follows:
3. Reserve funds and any interest accruing thereon shall remain in the reserve account or accounts, and shall be used only for authorized reserve expenditures unless their use for other purposes is approved in advance by a majority vote at a duly called meeting of the association.
For reserves to be used for other purposes than originally designated requires advance member approval.
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