HOA Reserve Accounts

Can anyone inform me if an HOA that was turned over to its residents by the developer and had 4 reserve accounts already setup by the developer prior to turnover, if a Board can setup additional reserve accounts without a vote of the membership? Refer to Florida Statute 720 section 305-303(6)(d). (It's not clear about additional reserve accounts)

Please note the Florida 720 Statute: “(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).”

Thank You,

VS

GlenL

Thank you for replying to my question.

The developer has setup four (4) separate Reserve Accounts; (1) Lights, (2) Roads, (3) Walls/Signs, (4)Landscape. Can the Board without a vote of the membership setup Three (3) additional Reserve Accounts, (1) Security Gates, (2) Security Car, and (3) Paint without a vote of the membership?

Thanks,

VS

GlenL

Florida Statute 720 requires that the reserve accounts be kept the same as when the developer that set them up. In order to change or eliminate any we must have a vote of all the membership with a majority approval. I am not questioning the original 4 reserve accounts; they are fine and funded properly. What I am questioning is whether the board can add additional reserve accounts without a vote of the membership based on the Florida Statute 720 section governing reserve accounts. I guess I will have to have an attorney interpret the law.

Thanks,

VS

GlenL,

Sorry about the mix-up of names.

Thank you for your reply,

You have deciphered the 720 language exactly as I did. The HOA Board may only add additional Reserve Accounts to the Budget if they are voted on by the membership and a majority approves.

I also agree that the statement you quoted must be placed in the annual report for the preceding fiscal year.

Thank you.

VS