Reserve account for condo/Ohio

Started by MyronD • 3 replies • 1679 views

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MyronD (Ohio)
Posts: 2

Posted:

To clarify, my previous question was can you write checks on the reserve account. I know you have to keep a separate account and I understand by not being able to write checks on the reserve account you have more security. But having said all that, I was told that you can not have the ability to write checks on the reserve account, so my question is--is that correct, does Ohio law spell out that you can not have check writing ability with the reserve account or do you have to transfer the monies to the operating account and write the check on that account? I appreciate all those that have responded.

GlenL (Ohio)
Posts: 5,491

Posted:

Myron I posted what the law said in your other thread. For what it's worth, while the majority of our reserve funds are in CDs, part of it is in a Money Market account which has the ability of writing checks.

My suggestion is to have whoever told you that, show you where it is written.

Studies show that 5 out of 4 people have problems with fractions

TimB4 (Tennessee)
Posts: 21,059

Posted:

Myron,

It's best to keep discussions of a specific issue, problem within one thread. Posting replies or additional information about an issue in new topics does a disservice to future readers who may happen upon only one part of the discussion.

For others, the initial thread about this issue can be found here:
http://www.hoatalk.com/Forum/tabid/55/forumid/1/postid/168448/view/topic/Default.aspx

As for your specific issue, as long as the funds are properly accounted for, it typically doesn't matter where they are physically kept or what services are available to the Association based on the funds physical location. OH statutes, as Glen pointed out, does not address the co-mingling of operating and reserve funds. Therefore, all of the Associations money could be kept in a single checking account and, providing those funds are properly accounted for as Operating Funds and Reserve Funds, the Association would still be in compliance with OH statutes.

Now, in my opinion (and I believe the opinions of others) it is best if the funds were not co-mingled and the Association had a minimum of 2 accounts. One for Operating funds and one for Reserve funds. We keep our Reserve funds in a money market account as it has a higher interest rate than a regular savings account. As a money market account, we could write checks that are drawn directly from that account. However, we do not do that.

Hope this helps,

Tim

KellyM3 (North Carolina)
Posts: 2,239

Posted:

MyronD,

Regardless of the law, you should not carry two checkbooks for the HOA. Move money out of reserves, into your operating account, and cut the check. Your reserve funds should require a bit of effort to access. Otherwise, your dues payers can't easily track when reserve funds are used. It also becomes easy to pay for non-reserve fund items with reserve fund cash - like a piggy bank.

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