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CAN THE BOARD FORCE FULLY
FUNDED RESERVES?
By
Eric Glazer, Esq.
Published October 13, 2014
I always thought that the dry part of the
Board Certification Course was teaching about budgets and
reserves. The
material simply doesn’t lend itself to any interesting side
stories or provide much room for jokes or even amusing
anecdotes. However,
the funny thing is that it’s 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.
It’s 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.
I’m 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, it’s 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 doesn’t 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 ain’t easy. (I know a lawyer
shouldn’t use the word ain’t)
I’m 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. Don’t shoot
the messenger.
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About
HOA & Condo Blog
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Eric
Glazer graduated from the University of Miami School of
Law in 1992 after receiving a B.A. from NYU. He has
practiced community
association
law for more than 2
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decades
and is the owner of Glazer and Associates, P.A. a seven eight
attorney law firm with offices in Fort Lauderdale, Orlando and
Naples.
The
firm also has satellite offices in Tampa and Fort Myers.
Since 2009, Eric has been the host of Condo Craze and
HOAs, a weekly one hour radio show on 850 WFTL.
See:
www.condocrazeandhoas.com.
He
is the first attorney in the State of Florida that designed a
course that certifies condominium residents as eligible to serve
on a condominium Board of Directors and has now certified more
than 8,000 Floridians all across the state. He is certified as a
Circuit Court Mediator by The Florida Supreme Court and has
mediated dozens of disputes between associations and unit
owners. Eric also devotes significant time to advancing
legislation in the best interest of Florida community
association members.
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