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WAIVING RESERVES
By
Rafael Aquino
Published December 9, 2020
During
the budget process, one of the critical issues is the consideration
of reserves. There is often a question and concern on how reserves
will be waived. In a condominium association governed by FS 718, the
Board of directors must host a meeting wherein it adopts a budget
with fully-funded reserves. The Board of directors have adopted
different practices to waive reserves that often are not in
compliance with the statutes. There are some common procedural and
compliance issues:
a.
Statute indicates that the vote to waive reserves is to be
conducted by members of the association (unit owners). In other
words, the Board of directors may not waive reserves on their own
without the vote of the unit owners.
b. The
vote to waive reserves by unit owners must be held at a unit owner's
meeting separate from the budget meeting wherein the Board will
consider and vote on the budget.
c. This
unit owner meeting must comply with a member's meeting's quorum
requirements indicated in the governing documents.
d. The
proxy document must contain the following disclosure language:
WAIVING OF RESERVES, IN WHOLE OR IN PART, OR ALLOWING ALTERNATIVE
USES OF EXISTING RESERVES MAY RESULT IN UNIT OWNER LIABILITY FOR
PAYMENT OF UNANTICIPATED SPECIAL ASSESSMENTS REGARDING THOSE ITEMS.
e. After
the unit owner meeting is successfully held to waive reserves, and
then the budget meeting may be hosted by the Board of directors to
adopt the budget with waived reserves.
The
association's attorney must be involved in clarifying the prevalent
legal procedure related to these matters. The attorney can clarify
voting requirements, quorum requirements, continuance, and
adjournment requirements.
A
professional approach to the budget process with assistance from a
licensed and experienced manager and the association attorney will
be critical in ensuring the Board of directors has diligently
complied with adopting a proper budget.
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As the Co-Founder and CEO
of Affinity Management Services, Rafael P. Aquino leads his team to
redefine excellence. They serve community associations
efficiently |
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and effectively with
dedication and passion. Rafael’s energy and positive
spirit is the foundation of Affinity Management
Services’ company culture, which instills enthusiasm and
excitement when providing expert advice to its board
members and relieving the day-to-day burdens of running
a community association.
Since 2007, Rafael has
developed a work culture that values responsive and
high-quality services. He has led his team by following
a proactive vs reactive philosophy. The same approach
Rafael instills in the day to day operations of each
association. Today, Affinity Management Services
maintains its success and benefits as a result of the
foundation Rafael has built and continues to foster by
providing educational seminars, continuing education
classes for association managers and board members
alike.
Rafael and his team help condominium and homeowners’
associations save money and improve their communities.
His calm, personable, and service-oriented nature helps
him to establish strong relationships with ease. Rafael
is known as a sincere and honest leader who looks out
for the best interests of his clients and communities,
and he strongly advocates for their needs. His role
requires coordination and communication, as such he
takes logical and intelligent steps to approach
challenges head-on.
As a graduate of Florida International University’s
electrical engineering program and a licensed community
association manager, Rafael’s education and skills equip
him with unique insights to tackle complex problems
through critical thinking. He understands how each
component within a system works together in order to
effectively arrive at solutions, techniques, and
conclusions. Therefore, as he manages the multiple
challenges of running a community association management
company, he understands how each property is its own
unique system and tailors’ specific services to assure
that all their needs are met.
For more information about Rafael P. Aquino and Affinity
Management Services please visit
www.ManagedByAffinity.com or call 1-800-977-6279
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Doral Office: 8200 NW 41st ST
Suite 200
Doral, FL 33166
Broward Office: 150 S Pine Island RD Suite 300
Plantation, FL 33324
O: 800-977-6279 ● F: 305-325-4053
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