Reserve Fund Expenditures
Transferring funds out of a reserve account requires board approval.
Boards may not spend reserve funds for any purpose other than the repair, restoration, replacement, or maintenance of, or litigation involving the repair, restoration, replacement, or maintenance of, major components that the association is obligated to repair, restore, replace, or maintain.
Boards are permitted to borrow from reserves but are required to provide notice of their intent to borrow by listing it as an item on a board meeting agenda. The meeting notice must include the reason the reserve transfer is needed, the options available for repayment, and whether a special assessment will be considered. If the board authorizes the transfer, it must issue a written finding recorded in the minutes explaining the reasons for the transfer, and describing when and how the money will be repaid to the reserve account.
Most importantly, the signatures of at least two board members or one officer who is not a member of the board plus a board member is required for the withdrawal of money from a reserve account.
American HOA Management