Our condo has not been approved for HUD certification. One reason is that our bylaws are discriminatory concerning occupancy. What exact language is required in bylaws to meet HUD's requirement? Is this worth changing our bylaws? It is my understanding that one-fourth of all buyers (including veterans) buy homes that have HUD certification. Without certification, therefore, one-fourth of all buyers do not even look at our condos for sale because realtors can look up the approval list on the HUD website. We are having more and more rental units in our association because owners cannot sell. If we had HUD certification, more buyers would at least be able to look at our units. I know HUD requires a current reserve study and a percentage of replacement set-aside money. (I have found that information on the internet.) We have not had a reserve study done since 1994, and our board has never set up any separate account for reserve funding. Our board sets the dues and hopes they will be enough to cover whatever is needed or whatever might happen. We only get a vague idea at the annual meeting on what they are going to spend our "dues" on (besides general operating expenses,) and usually it turns out differently than what they said. Being that association insurance deductibles have risen dramatically (ours went from $1,000 per incident to $5,000 per incident,) I have read that many associations include insurance deductibles in their reserve funding account so it is there if it is needed. Is this a good idea? Because of not having reserve funding (which I have pointed out to the board for years,) could I sue the board for fiduciary mismanagement?
