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Community Living: Keep reserve funds in reserve

Surplus reserves can't move to general fund

Q: Our board plans to paint our buildings and replace the carpeting in the halls and stairwells. Monies will be taken from the reserve fund for this use. We have received bids for the projects and there will be monies left over. Can these funds be put into the general fund for other emergency use?

A: No. The extra funds must remain in the reserves. When preparing the reserve budget for next year, adjust the line items to calculate future reserve expenses that include the surplus. Most likely, it will reduce the line item for collections. In order for you to move the excess funds from the reserves, the members must vote on the transfer.

Board members get okay to attend parties

Q: An air of disharmony has fallen upon our association. To try to rectify this situation, a group has decided to have several gatherings in homeowners' residences. Along with members of the associations, the board will be invited to attend. In this purely social atmosphere, does the restriction apply that the attendance of a majority of board members constitutes a quorum?

A: The homeowners association and condominium acts say a board meeting occurs when a quorum of directors gathers to discuss business. A social gathering would not be included and would not be a violation of the quorum requirement as long as association business is not discussed.

Renting out common space raises money

Q: I live in a mobile home cooperative that has storage space for boat trailers and motor homes and several boat slips. The association does not charge for the use of these areas. However, there is a demand for the space and the board is talking about charging a special fee to use the areas. The statute states that we cannot charge for the use of common areas unless our documents allow it or the members approve the charges. Can it be mandatory for us to charge for the exclusive storage use? Are the members who do not have exclusive use of the area entitled to a fee reduction?

A: The association is granting exclusive use of a common area space to one owner; this could be called a limited common area. There are maintenance costs for this space, and although each space is small, it adds up to a larger expense for the association. If the members agreed to allow rental fees for the use of the spaces, the money raised would be included in the budget as income, reducing the total amount needed in fees. It would be the same as an owner renting the clubhouse for a private party. I suggest you have a form, like a rental agreement, drafted by an attorney. There is liability for the association allowing storage of RV, trailers, boats and other vehicles. For this fact alone, I recommend a rental program for the storage area, the clubhouse and other common facilities.

Sunshine Law applies only to government

Q: All of our board meetings are started with a statement by the president: "We advise all in attendance that we meet under the Florida Sunshine Law, whereby all are invited to attend but only as observers." We received an update from our attorney wherein he said, "Sunshine Law does not apply to meetings of association board of directors." Is our president making a wrong statement?

A: Florida Statute 286.011 covers the Sunshine Laws. It only involves government meetings. Associations do not fall under this act; their specific acts (F.S. 718, F.S. 719 and F.S. 720) have other requirements and can be found online at

Richard White is a licensed community associations manager. Write to him at 6039 Cypress Gardens Blvd., No. 201, Winter Haven, FL 33884-4115. Please include your name and city.


Community Living: Keep reserve funds in reserve 05/28/10 [Last modified: Friday, May 28, 2010 4:30am]
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