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Professional Advice

Ask the Administrator: Reserve Fund

In the last AGM, we discussed the reserve fund.  Due different extra expenditures in recent years, the amount of this Fund is much lower than in other years.  But most neighbors don’t want to make an impact or a greater contribution to this Fund, leaving it to be at the minimum.  I am concerned that in the future given an urgency and by not having a background in conditions we have to make a large payment,  what can we do?

Julieta H.

Administrator:  Juan López

The law expressly establishes that the reserve fund must be equipped with an amount that in no case may be less than five per cent of its last regular budget.  So at least that minimum must be met.  Good management involves proposing a budget tight but realistic.  Bloat the budget without justification can reveal that there will not be a rigorous work of control of expenditure.  But adjust fees to a minimum, never should be ignoring the law, by what once included items of expenditure of the community, the reserve fund cannot be underestimated.   Now that you know the answer, we recommend that either expose at the Assembly in approval of the budget.  We must analyze all items, to rule out if your community can reduce the amount of some of which correspond to maintenance.  If the reserve fund is not quoted by same or higher percentage than the stipulated in the law , you will need to appeal the agreement at the courts so it is declared as null and consequently, the fund is granted at least with the minimum legal figure

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