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Can property management take HOA reserves for cash flow crunch?


Question:

Can a property management company unilaterally transfer money from capital reserves to pay for monthly expenses with no one's knowledge? Our condo HOA has been EXTREMELY hands off for many years, but we did have a Reserve account with approximately 100k in it. At the most recent meetings, we have been told there is not only a zero balance in the account, but our HOA actually owes for past dues bills dating back several years. We were told that the property manager transferred monies from the reserve fund to pay for monthly bills over the last few years. Poor budgeting led to expenses being higher then revenues. According to the past Board, they had NO idea this was happening, and NEVER voted for that to happen. So my question is, what legal recourse, if any, exists, when a property management company violates our by-laws? They clearly state that capital reserves CAN NOT be used for recurring expenses, which is what they did. Money was never paid for a capital improvement.


Answers (22)

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