“Reserve accounts” means both of the following:
(a) Moneys that the board has identified for use to defray the future repair or replacement of, or additions to, those major components that the association is obligated to maintain.
(b) The funds received, and not yet expended or disposed of, from either a compensatory damage award or settlement to an association from any person for injuries to property, real or personal, arising from any construction or design defects. These funds shall be separately itemized from funds described in subdivision (a).
Related Case Law
- Raven’s Cove Townhomes, Inc. v. Knuppe Development Co.
(1981) 114 Cal.App.3d 783
[Fiduciary Duties; Reserve Account] A HOA board’s failure to properly fund a reserve account constituted a breach of their fiduciary duties to the HOA and its members.