Withdrawal of Reserve Funds from Reserve Accounts

            California Civil Code Section 1365.5(b) provides that reserve funds may not be withdrawn from the association’s reserve accounts unless either 2 Board members, or one board member and an officer who is not a board member, sign.  Today most governing documents also include this requirement.  The question is whether the banks are enforcing this requirement and if not, what sorts of internal controls can associations put into place to prevent a rogue director from absconding with all of the reserve funds?  We have anecdotal evidence that banks are not always enforcing the 2-signature requirement. This will be the topic of an upcoming article in an upcoming newsletter.  Stay tuned!

 


Address: 8220 University Ave #100, La Mesa, CA 91942

Phone Number:  +1 619-589-8800