Q I live in a Florida HOA and we have had reserve accounts for our roofs/painting since our 1986 inception. Approximately $4.00 of every homeowner's maintenance fee goes into the reserve account that we have set up. However, at a recent meeting, our three-member board announced out-of-the-blue that they were discontinuing our reserve funding and that all the money in the reserve fund was being transferred to our operating account. The members at the meeting objected saying that even if this is legal, the three board members cannot do this by themselves; it must be voted on by the whole membership.
Our board insisted that they have the right to do this. My question, though, is this: Is discontinuing reserves and transferring funds to our operating account legal, and, if so, can the three board members do this alone? Do we not get to vote on this?
—Worried in West Palm
A “Presuming the facts are as stated in the inquiry (which may be confirmed by reviewing the minutes of the board meeting), Florida law provides guidance on both issues,” according to Attorney Ben Solomon, a partner with the community law firm of Association Law Group in Miami.
“In short, Florida law prohibits the board from unilaterally discontinuing the funding of reserves (once established) without a membership vote, as well as requires a membership vote in order for the board to use any reserve funds for ordinary operating expenses.