a Column I wrote years ago, because boards need a refresher
on where we are)
I always thought that the dry part of the Board Certification
Course was teaching about budgets and reserves. The
material simply doesnít lend itself to any interesting side
stories or provide much room for jokes or even amusing
anecdotes. However, the funny thing is that itís normally
the part of the seminar that gets the most questions from
the audience. The questions keep coming about pooling vs.
straight line reserves, what items get put into the reserve
account, can the association switch from straight line to
pooled reserves, is a unit owner vote required, can reserves
be waived, and on and on and on.
There is one moment however that gives everyone a little bit
of a jolt. Itís when I tell them that if the Board of
Directors wants reserves to be fully funded, the reserves
will be fully funded, like it or not. People get upset.
They know that the unit owners have the right to vote down
any funding of reserves, so how then is it possible that the
Board can force fully funded reserves down their throats?
If you look closely at the Florida Condominium Act, it is
clear that the Act requires the Board to mail out the budget
showing reserves as fully funded. Iím paraphrasing, but the
statute then goes on to say that the unit owners can vote to
waive reserves completely or vote in favor of partially
funded reserves. However, the statute nowhere requires that
when the Board sends out the budget, they must
provide that opportunity to the unit owners by enclosing a
proxy to waive or reduce the funding of the reserves. Check
it out, itís not there.
Sure, if the Board sends out a budget only showing the
reserves as fully funded, the unit owners can get together
and have a meeting, obtain a quorum and vote down the
funding of a reserve account. I simply have never seen that
happen in my entire career. If the Board doesnít send out
the forms and/or set down a vote to waive the reserves, the
unit owners have to accomplish this waiver on their own, and
it isnít easy. Iím not condoning the actions of a Board that
would simply impose its will on the community and force
fully funded reserves on the owners. I write to merely
point out that if they want to, they can.
Perhaps next year things will be different. Donít hold your