MANDATORY RESERVE FUNDS?
Published September 16, 2022
The discussion about creating mandatory reserve funds for condos
and HOAS has been a hot topic in many town hall meeting since
2003. I will never forget a
Town Hall Meeting in North Miami in 2006, organized by
Representative Yolly Roberson. Remember, that was after
hurricane “Irma” devastated South Florida and created a sea of
blue tarps covering former roofs. Folks realized that even with
property insurance the cost of repairing roofs was rather
expensive since most condos had a 5% deductible on hurricane
damage. Owners were hit with high special assessments and these
owners were very "unhappy". At that time reserve funds in
most condos were non-existing.
But despite the fact that owners had complained about the high
special assessments the had been hit with, the suggestion of
panel members to fund mandatory reserves created a serious
uproar among the audience. Representative Roberson had to
threaten with calling the police in order to calm down the
For many years we heard mainly two arguments against the
creation of fully funded reserves from many owners:
I’m long dead before these repairs will be necessary.
Our board will just spend the money for other purposes than
The second argument was actually very true. Over the years we
saw many boards spending the collected reserve funds for their
pet projects and the owners again faced high special assessments
when – for example – the roof needed to be replaced. In one case
in Broward County the board actually bought palm trees with the
money from the roof reserves and had to levy a big special
assessment to fix a leaky roof shortly after the purchase of the
Make no mistake: Reserve funds created in the past were more or
less unprotected and absolutely nothing happened to board
members who spent the reserve funds for other purposes than
intended. And in all honesty: I think that this will continue
even if the recently enacted Condo Safety Bill contains
provisions to punish board members and/or CAMs for misuse of
reserve funds. The Division of Florida Condominiums, Timeshares
and Mobile Homes will again ignore these provisions – business
as usual: Let’s just ignore enforcement!
Jan Bergemann is president of Cyber Citizens For Justice,
's largest state-wide property owners' advocacy group.
CCFJ works on legislation to help owners living in
associations. He moved to
in 1995 - hoping to retire. He moved into a HOA, where the
developer cheated the homeowners and used the association dues
for his own purposes. End of retirement!
CCFJ was born in the year 2000, when some owners met in
- finding out that power is only in numbers. Bergemann was a
member of Governor Jeb Bush's HOA Task force in 2003/2004.
The organization has two websites to inform interested
homeowners and condo owners:
News Website: http://www.ccfj.net/.
Educational Website: http://www.ccfjfoundation.net/.
We think that only owners can really represent owners, since all
service providers surely have a different interest! We are
trying to create owner-friendly laws, but the best laws are
useless without enforcement. And enforcement is totally lacking