Laws mandate that property owners associations (POAs) maintain reserves when owning assets. However, our POA is unique in that we do not own land and possess very few tangible assets (e.g., street signs, tools, cones). There appears to be confusion regarding the ownership of the roads. According to our governing documents, our responsibility is limited to the maintenance of roads, with ownership of the roads, to the center line, resting with individual property owners. If we were the owners of these roads, we would be required to pay property taxes annually, which is not occurring.

 

Although we are not legally required to maintain a reserve, we believe it is prudent to set aside funds. However, the current reserve amount is excessively high relative to the POA's actual assets. Additionally, there seems to be a lack of documentation outlining the terms and conditions related to the 'Borrowing from Reserves.'  < Click on the blue link.

 

By law the removal of funds from a reserve can only take place when there is clear documentation to the terms and conditions of the loan and repayment schedule. We are currently in noncompliance with applicable law with regard to our undocumented use of our reserve.