Master Association and Sub-association

We are close to a 60 unit condominium complex (CA), which is joined with a commercial building. The commercial side is our master association while we are the sub association.

I would like feedback from others in this situation. How do you go about determining which is a priority to fund reserves? Is it our reserves or their reserves. We fund their reserves on a monthly basis - now they are looking to increase that substantially. There is a possibility of special assessments.

Clicked send too quickly...

Does your sub-association have its own attorney, separate from the master's attorney? In a situation like this, I'd be concerned about the financially stronger part bullying the weaker one. Also (personal opinion) I have an issue with members of a non-profit subsidizing the money-making activities of a for-profit business (I'm assuming the the condo residents do not share in any of the commercial entity's profits, except maybe in an indirect way). For the same reason, I'd be concerned about a single lawyer representing both sides because of the potential for a conflict of interest. A separate attorney representing only the condos could probably give you some helpful guidance.

We don't have a master association but our 200+ unit high rise also include a Commercial Area. It has its own reserve account. The residential area--about 95% of the premises--has its own reserve account.

But it seems you only have one reserves account?? And the master association controls it? I cna'timagine how that is effective, i.e., would the sub assn. pay to fund reserve items that only the master uses??

Say, are there any residential owners on the master association board of directors? Does you residential sub association have its own board?

You really need to have someone knowledgeable look at your documents and your financials to give you an informed answer.

Our sub assocation pays approximately 25% of joint expenses. The Master association has it's own reserves while we have our own reserves. We contribute to their reserves and our reserves. My question - which reserve should be the priority? Should the focus be on the sub-reserves or the master?

I'm not sure what is meant by which accounts gets priority or "focus." The reserves specialist recommends what to contribute monthly to each account and they write a study for each account. Impossible to imagine the specialist would say or write that one account takes priority over the other. As you know a reserve study is required frequently in CA.

It sounds like the reserves analyst found some additional components or some component became much more expensive for the comm. association? Your sub board must read both studies really carefully. A few years ago, as a board ember I found several reserves components that the commercial owner should have contributed to, but had not been. The analyst corrected the errors, which were significant. But the errors stemmed from the PM's report to the analyst.

(I additionally found some operating expenses to which the comm owners should have been contributing their 5%, but had not been)

Is it your CC&Rs that states how much the sub must contribute to the master reserves and to the master's operations budgets? Yeah, Max is right your governing documents tell the story and might be more complicated than most.

Our CC&Rs were very vague on this point and I had to research the original budget docs sent to the state for approval to open our buildings.