reserve funds

Our governing docs state "The reserve funds held in each account may be expended only for major maintenance,repair,or replacement of those assets covered by the reserve budget pursuant to which they were collected.The reserve funds may be used as an asset for the purpose of obtaining performance or payment bonds for the association.Subject to such limitation, the board may adopt resolutions regarding the expenditure of any reserve funds including,without limitation,policies designationg the nature of assets for which reserve funds may be expended. Neither the association membership nor the board shall adopt,modify,limit,or expand such policies without declarant's prior written consent during the development and sale period."
Florida statute 720.303 6fand h couldn't fit all of f and h
Once a reserve account or reserve accounts are estabished,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.
(h) Reserve funds and any interest accruing thereon shall remain in the reserve accunts or accounts and shall be used only for authoritzed 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.
Management took $35,000 out of reserve(given authority by 1 board member)Took additonal $17,000(authority given by 2 board members)I said he had no authority to take it and I think he violated the law.He said he can do it to "keep the water and electricy on" What do you think? Barbara

I think you are barking up the wrong tree, Barbara. If money had to be taken from the reserve fund to keep the electricity and water on, then you have a much more serious problem than where the money came from.

You need to be concerned why assessments are not sufficient to pay for water and electricity. And you need to be concerned about the impact of not paying those bills.

My fellow board member said according to the financial report we had money.She doesn't know why he did it,and he refused to answer our emails on questioning him. He is taking direction for 1 or 2 board members. He could have called an emergency meeting of the membership and showed documentation of the need to take it. The eletric and water bill average $6000 a month. He continues to violate the governig docs. He is spending money on items and services that are not emergencies.(ex:$278.00 for 2 trash cans.)Is it ok to violate the law, in any situation? Is there any documentation that would support a board being able to ignore the law? I want to make sure that I'm following the governing docs and the law. ANy help would be appreciated.
Barbara

Barbars,

Methinks your problem is not that the mgr using reserve fund monies for expenses not designated for reserve, but rather that you have a board that isn't in control of the assn. and have created a gross mismangement of funds. The BOD as a whole (not just one or two members) should be making the decisions. The mgr shouldn't be doing anything w/o thier approval. There shouldn't be shortfalls that necessitate the use of reserve funds. Your BOD is in bad shape!!

Donna,
The president pulls the strings of the manager. We have 4 board members right now and they take action based on 2 board members. We have sent emails and brought up all the violations at board meetings but they ignore us or give a "pat' answer. We think this is very serious, and don't know where to turn now for help. WE know the association awyer works for the management company,so that would be futile.
Barbara

Glen,
The president has no more power than the rest of the board members.They now have placed a foreclosure without our knowledge(no vote).Where can I find out if we have an ombudsman? Anymore suggestions would be greatly appreciated.
Barbara

Barbara,

Fl. Statutes 720:311 is Dispute Resolution and that will have all of the information that you need to apply for the Ombudsman.

I copyed just the first paragraph for you but you need to read the entire section. Good Luck!

720.311 Dispute resolution.--

(1) The Legislature finds that alternative dispute resolution has made progress in reducing court dockets and trials and in offering a more efficient, cost-effective option to litigation. The filing of any petition for arbitration or the serving of a demand for presuit mediation as provided for in this section shall toll the applicable statute of limitations. Any recall dispute filed with the department pursuant to s. 720.303(10) shall be conducted by the department in accordance with the provisions of ss. 718.112(2)(j) and 718.1255 and the rules adopted by the division. In addition, the department shall conduct mandatory binding arbitration of election disputes between a member and an association pursuant to s. 718.1255 and rules adopted by the division. Neither election disputes nor recall disputes are eligible for presuit mediation; these disputes shall be arbitrated by the department. At the conclusion of the proceeding, the department shall charge the parties a fee in an amount adequate to cover all costs and expenses incurred by the department in conducting the proceeding. Initially, the petitioner shall remit a filing fee of at least $200 to the department. The fees paid to the department shall become a recoverable cost in the arbitration proceeding, and the prevailing party in an arbitration proceeding shall recover its reasonable costs and attorney's fees in an amount found reasonable by the arbitrator. The department shall adopt rules to effectuate the purposes of this section.

Donna,
I also found out that ombudsman don't deal with HOA's. Would this fl statute
be used for 2 board members having disputes with 2 other board members and management.
Barbara

Barbara,
I am sorry and you are correct. There is a move to add HOAs to the Ombudsmans authority. The only thing that HOAs have right now is the ability to go to presuit mediation. Sorry for the error.

That is nothing... I was told to order two trash cans (cement) and I did so and our HOA will have to pay $708 for both of them.

Each year, the HOA will set a budget to determine how much money it needs to pay all ordinary repair and maintenance expenses. In many cases, part of this budget will include a little extra that goes into a reserve fund. The reserve fund is used to cover major repairs that aren't planned for in the budget. For example, if a hurricane comes through your area and causes substantial and expensive damage, the HOA may use the reserve funds to make repairs.