Reserves

This question is posed to Donna. Can a board decide by themselves to NOT fund reserves for the next year? I just received a copy of our proposed budget and they show nothing to reserves. How can a board of five people decide this for the entire association? It doesn't seem right.

Looks like it's a PROPOSED budget, so you will get a chance to vote on it.
But the board may be looking at some other numbers and since the economy is in the pits, they want the chickens now and the eggs later.
In any case, they should be able to show the membership WHY they chose not to fund the reserves this year.

Ellen,
Has it been established that a nreserve account has to be established? If you assume the process was done right, and there has been contributions made to the reserve study, as specified and this non contributing year has not been done before thereby setting a standard, the board should explain, and po that explanation should be noted in the proposed budget. Granted, best case is for the members to vote but many times this vote is rubber stamp.

Donna,

Thanks for the info. We currently have a reserve fund and as most hoas we are having a problem with some owners not paying their assessments. I am assuming the board can waive it this year but I would want them to know this is for this year only. I doubt we could get a quorum of owners together before this budget is passed.

Ellen,

It looks like we were posting at the same time. That part of the Reserve Statute that I posted above does state that any non funding of the Reserves is for 1 year only.

An example of how things are going in this HOA market is from my own unit down in South Florida. They recently did a reserve study on our roof responsibility. Prior to this vote that we just had, the HOA was responsible for maintenance, repair and replacement of the roofs. inside and out.

That meant every 2 years, either power washing or chemically treating the concrete barrel tile shingles. That is a whopping cost biannually.

The Board in it's infinite wisdom wrote an amendment to roof responsibility which now makes the owner responsible for REPLACEMENT of their own roofs. The difficult part will be when these co-owned roofs need to be redone. THE AMENDMENT BARELY SQUEEKED BY and we all must live with this. Maybe 1 half only will need replaceing and the other half will not. The Board says that they have a set policy about where the dividing line on the roof is. I sure hope so because I smell trouble coming.

Anyhow, my point is that we now have an extremely smaller Reserve amount for the roofs but in the long run, we will probably pay the same

Ellen don't get too comfortable or complacent, you'll notice it says the reduction in funding is only valid for one year, it does not prohibit the exact same vote for the following year and the year after that etcetera, etcetera.