As you are aware, a low annual assessment is part of the sales program offered to new purchasers and is often subsidized by the developer in this fashion. Board members may move funds around within the reserves, but not into the operating fund. This would be a major violation and subject the board to a severe penalty. Operating funds may be moved into the reserves freely but must remain there once placed and become part of the reserve balance. Operating funds can flow freely to the reserve fund but not vice-versa Reserves are mandated by Florida statute and must be included in the annual budget.
Reserves are prepayment to replace large cost items affecting all unit owners.
These have an estimated lifecycle which must be updated regulary in the budget reserve schedule which is sent to each timeshare owner. Reserves must be fully funded based upon a straight-line calculation method. Let me explain the concept of waiving all or partial reserves. This guarantee is predicated upon an implied warranty period for major items found in the reserve components. Whether a developer or an association is in control, the waiving of reserves must be properly voted upon at a duly called meeting per statutory guidelines for each year the waiver is sought.