Tag Archives: tankel

HOA Reserve Funds: The Pros and Cons of Underfunding Reserves

“I have a board member right now who wants to get his board to roll back assessments by 50 percent and not fund reserves,” says David C. Swedelson, principal at Swedelson & Gottlieb, a law firm that represents associations in the Los Angeles area. “He’s in [financial] trouble. So he’s getting a petition of homeowners to compel the board to vote to reduce assessments.”

In this ever-scary economy, Swedelson is surely not the only attorney to field questions from boards about whether they can stop or reduce their funding for reserves as a way to ease the burden on homeowners. Some, but not all states, have laws governing associations’ reserve practices, so investigate your state law before your board takes any action.

Here, attorneys offer a taste of how state laws work from their perspective at each end of the country—California and Florida.

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Do-It-Yourself? When Free HOA Help Can Be Costly

Pick your cliche: The cheap comes out expensive. You get what you pay for. If something sounds too good to be true, it is.

Any one of those could apply to the idea of allowing members to volunteer to perform association work, which sounds like a great idea for cash-strapped associations but has hidden dangers. Here’s what you need to know to protect your association from the downside of allowing members to take on community projects so that the association can save a buck.

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