Reserve Account Expenditures Require Proper Procedures and Authorization
Homeowners associations are required to maintain an appropriate level of HOA reserve funds in order to have sufficient funds available for the repair, restoration, replacement, maintenance of, or litigation involving the repair, restoration, replacement, maintenance of, major components that are part of the association’s common areas that the association is obligated to maintain. The officers and directors of associations that have control over the association’s funds frequently deal with issues concerning the use of reserve funds for other purposes such as the payment of unexpected legal fees for the defense of litigation that has been commenced against the association and/or its management personnel and which is not covered by insurance.
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