Can a condominium board use reserve funds for an item not included in the reserve fund plan?
Posted : 11/11/2017 2:33 am
Here is an important article from Robert Noce.
This question comes up over again from emails I received in the past year from condo owners and is a breach of the Condo Act that many boards make where owners cannot seem to get any recourse nor is there any enforcement mechanism in place to hold boards accountable. This is another clear example that boards need to learn their responsibilities and the Condo Act!
Q: Can a condominium board use reserve funds for an item not included in the reserve fund plan?
A: No. Once a condominium corporation has obtained the reserve fund study, the board is required to put together a reserve fund study plan. It is this plan that will govern the condominium corporation with respect to capital expenditures. If a capital expenditure is outside of the reserve fund plan, then it would be inappropriate for the board to use reserve fund money to pay for an unexpected capital expense. The reserve fund money is not a slush fund to be used at any time. Rather, this money must be used in accordance with the reserve fund plan that was adopted by the corporation.
Helpful Hint: When in doubt, the board should seek a legal opinion to determine whether or not funds can be used for a particular purpose.