reserves

Declaration of covenants "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."
A couple of us have had a discussion about what this means. Some say you can use it only for major maintenance(ex:when its time for Community roof replacement) Others say you can use it to do a repair whenever one is needed(ex:one roof needs repair)
What are your thoughts on this?
Barbara

Dear Barbara,

The reserve coverage will be stipulated by the state or county law (usually somehting like condominium or HOA act). The law will stipulate that the association has to accumulate reserve funds and for what purposes.

It may be prudent to have a reserve study done. It will identify what item should be covered by reserve funds and how much reserves you need to have.

In generaly, capital projects like parking lot repair, roof replacements, etc are covered by reserve funds. Repairs and maintanence like painting will be covered from operating account.

You management company should know that.

Donna,
florida statute on reserves "it is to be used only for authorized 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 money for bills,and two board members used this statute to tell him he violated the law. Well we were told he had a responsibility to keep the association going.
Now he is using the reserves to do single roof repairs,and I think its wrong.If he continues to use the reserves like this he will deplete the reserves. Am I correct that you are agreeing,that he can't use it fo for these single repairs?
thanks
Barbara

Donna,
Bear with me,remember this is all new to me. What is the reserve statement? Where do I find it?
Barbara

Donna,
Thank you,as usual you have been a great help.
Barbara