Florida 720 re Transferring Reserves

Ruth where are they trying to transfer the funds to? Do you mean transferring the monthly portion into the reserve fund or transferring money out of the reserve fund for a use other than repairing or maintaining capital items?

Ruth,
It will take a membership vote to allow a Reserve Account to be established. You will have to follow the below "copy from the State Statutes 720;303, You say that your own documents do not address having a Reserve account, probably because your association is not new???

I do not like the answer that your attorney gave you. He , as a professional, should know the importance of Reserve funding. The State description on Reserves is slightly vague but it is his job to unscramble them and set your Board in motion for establishment of those funds.

Anyhow, 720 means State Statutes for HOA's otherwise known as SS.720. S.S.617 are your Articles Of Incorporation

This is part of the Reserve funds Statute: It says NOT LESS THAN A MAJORITY OF THE TOTAL VOTING INTEREST IN ORDER TO PASS A VOTE IN FAVOR OF RESERVE FUNDING

720.303(6),
(d) An association shall be deemed to have provided for reserve accounts when reserve accounts have been initially established by the developer or when the membership of the association affirmatively elects to provide for reserves. If reserve accounts are not initially provided for by the developer, the membership of the association may elect to do so upon the affirmative approval of not less than a majority of the total voting interests of the association. Such approval may be attained by vote of the members at a duly called meeting of the membership or upon a written consent executed by not less than a majority of the total voting interests in the community. The approval action of the membership shall state that reserve accounts shall be provided for in the budget and designate the components for which the reserve accounts are to be established. Upon approval by the membership, the board of directors shall provide for the required reserve accounts for inclusion in the budget in the next fiscal year following the approval and in each year thereafter. Once established as provided in this subsection, the reserve accounts shall be funded or maintained or shall have their funding waived in the manner provided in paragraph (f).

(e) The amount to be reserved in any account established shall be computed by means of a formula that is based upon estimated remaining useful life and estimated replacement cost or deferred maintenance expense of each reserve item. The association may adjust replacement reserve assessments annually to take into account any changes in estimates of cost or useful life of a reserve item.

(f) Once a reserve account or reserve accounts are established, the membership of the association, upon a majority vote at a meeting at which a quorum is present, may provide for no reserves or less reserves than required by this section. If a meeting of the unit owners has been called to determine whether to waive or reduce the funding of reserves and no such result is achieved or a quorum is not present, the reserves as included in the budget shall go into effect. After the turnover, the developer may vote its voting interest to waive or reduce the funding of reserves. Any vote taken pursuant to this subsection to waive or reduce reserves shall be applicable only to one budget year.

Donna:
We do indeed have existing reserves. In the fall a member vote was held to transfer funds from a specific reserve to a fund to support the expense of building a gate. Now our insurance company tells us that we must have the item that the now transferred reserve would have paid for. Must we now have another member (rather than board)vote to transfer other funds to pay for the now insurance required item? Are we inviting a problem if we follow the attorney's advice re an "ambiguous law" and transfer funds without a member vote?

Donna:

I agree with everything that you have just written. Those of us who voted no on the original transfer of funds are having a sad sort of chuckle. We said all along that it was wrong to move the particular funds. But being right does not help the situation. I still wonder if 720's required vote for moving reserves is a member vote or a board vote.

Anyway, thanks for your time and advice.

Donna, "you may not", doesn't mean a thing...Our Board did it twice that I know of to pay bills. ($5000. each time)It was paid back but there hasn't been a dime put in the Reserve account since Apr.07... There is nothing that can be done about it because our lovely state of Fl. has given HO's no way of enforcement and their is no acountability for the Board....I got their smirk, "what you gonna do about it"...and the state officals say, "get an attorney"

The Reserve account was/is a line item in our budget....even if every HO wanted this account handled right, the Board can still do as they please (and they do on every issue)...HO's have no money for an attorney.