MaryS37
Posts: 3
Posts: 3
Posted:
Does Board of Director's have the right to take out a line of credit on your reserve account.
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Started by MaryS37 • 6 replies • 1601 views
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MaryS37
Posts: 3
Posts: 3
Posted:
Does the Board of Directors have a right to borrow a line of credit on your reserve
JohnC46
Posts: 14,230
Posts: 14,230
Posted:
Mary
I am not nor do I play a lawyer.
The simple answer to your questions is they more then likely have the right to do so. The answer to their ability/power to do so will be in your Covenants and/or Bylaws.
I am not nor do I play a lawyer.
The simple answer to your questions is they more then likely have the right to do so. The answer to their ability/power to do so will be in your Covenants and/or Bylaws.
FredS7
Posts: 922
Posts: 922
Posted:
> Does Board of Director's have the right to take out a line of credit on your reserve account.
And if they CAN it might or might not be the right thing to do.
This is likely to be considered when there is an expense too large to fund from reserves. The alternatives are (1) deferred maintenance and (2) special assessment.
And if they CAN it might or might not be the right thing to do.
This is likely to be considered when there is an expense too large to fund from reserves. The alternatives are (1) deferred maintenance and (2) special assessment.
KellyM3
Posts: 2,233
Posts: 2,233
Posted:
A line of credit or a loan taken out because there aren't enough Reserve Funds should be viewed as a "special assessment."
BruceF1
Posts: 2,516
Posts: 2,516
Posted:
Quote:
Posted By MaryS37 on 08/13/2014 11:33 AM
Does Board of Director's have the right to take out a line of credit on your reserve account.
Does Board of Director's have the right to take out a line of credit on your reserve account.
The answer probably can be found in your CCRs and/or in your state laws. Look for something like "the right to assign future income" and whether that power resides with the board or requires a vote by the homeowners. The right to assign future income means the right to borrow money.
KerryL1
Posts: 14,519
Posts: 14,519
Posted:
Are you on the Board, Mary?
What does the Board say the funds are needed for?
What does the Board say the funds are needed for?
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