Reserve fund

The reserve fund is the cash (and investments) set aside for major repairs and replacements. It is not operating cash. Raiding it for day-to-day bills is how special assessments get born. The reserve fund is the association's repair savings account. Nolo describes the second slice of HOA dues as the amount placed into reserves for long-term repairs and replacements — a new roof for the community center, a new road, additional parking — so high-cost work is funded when it comes due. Special assessments show up when that account was never filled, or was emptied on something else. California Civil Code section 5510 is strict, and it is California-only. Withdrawal of moneys from reserve accounts requires the signatures of at least two people: two directors, or one officer who is not a director plus one director. The board shall not expend funds designated as 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 the association is obligated to handle and for which the reserve fund was established. That's a statutory purpose limitation.

This is general information from an AI helper, not legal advice. Confirm it against your documents and your state's law. If a deadline or hearing is coming up, talk to a licensed lawyer.