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THE OWNERS NEED TO VOTE TO WAIVE RESERVES
BEFORE THE BOARD VOTES TO WAIVE RESERVES
By
Eric Glazer, Esq.
Published December 7, 2020
To keep it simple……in a condominium, when the board sends out
its budget, that budget SHALL include reserve accounts for
pavement, painting and roofing and anything else expected to
cost $10,000.00 to repair or replace.
However, the statute says….
This subsection does not apply to an adopted budget in which the
members of an association have determined, by a majority vote at
a duly called meeting of the association, to provide no reserves
or less reserves than required by this subsection.
If the unit owners don’t vote to waive or reduce the full
funding of reserves, full funding of reserves shall go into
effect.
Many boards simply hold a board budget meeting, and at that
board meeting, count the limited proxies, and announce whether
or not there are enough votes to waive or reduce the full
funding of reserves. Then they pass the appropriate budget, all
at the same meeting.
A closer reading of the statute makes it clear that the waiving
of reserves must occur at a unit owner meeting. Then, depending
upon the vote at that unit owner meeting, the board adopts the
appropriate budget (with or without reserves) at a subsequent
board budget meeting.
So, I tell my clients to schedule a unit owner meeting let’s say
at 6:45 pm to count the limited proxies and then schedule the
actual board budget meeting for 7:00pm. To actually pass the
budget depending upon the results of the 6:45 pm meeting.
Remember, the limited proxy must say:
Proxy questions relating to waiving or reducing the funding of
reserves or using existing reserve funds for purposes other than
purposes for which the reserves were intended shall contain the
following statement in capitalized, bold letters in a font size
larger than any other used on the face of the proxy ballot:
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.
Now that you know how to waive reserves, the age old question
is….should you vote to waive reserves?
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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 Sachs, P.A. a seven attorney law firm with offices in
Fort Lauderdale and Orlando and satellite offices in Naples,
Fort Myers and Tampa.
Since 2009, Eric has been the host
of Condo Craze and HOAs, a weekly one hour radio show that airs
at noon each Sunday 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 10,000
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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