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Using Reserve Funds



SECTION 5510-5520

5510.  (a) The signatures of at least two persons, who shall be
directors, or one officer who is not a director and one who is a
director, shall be required for the withdrawal of moneys from the
association's reserve accounts.
   (b) 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 that the association
is obligated to repair, restore, replace, or maintain and for which
the reserve fund was established.

5515.  (a) Notwithstanding Section 5510, the board may authorize the
temporary transfer of moneys from a reserve fund to the association'
s general operating fund to meet short-term cashflow requirements or
other expenses, if the board has provided notice of the intent to
consider the transfer in a board meeting notice provided pursuant to
Section 4920.
   (b) The notice shall include the reasons the transfer is needed,
some of the options for repayment, and whether a special assessment
may be considered.
   (c) If the board authorizes the transfer, the board shall issue a
written finding, recorded in the board's minutes, explaining the
reasons that the transfer is needed, and describing when and how the
moneys will be repaid to the reserve fund.
   (d) The transferred funds shall be restored to the reserve fund
within one year of the date of the initial transfer, except that the
board may, after giving the same notice required for considering a
transfer, and, upon making a finding supported by documentation that
a temporary delay would be in the best interests of the common
interest development, temporarily delay the restoration.
   (e) The board shall exercise prudent fiscal management in
maintaining the integrity of the reserve account, and shall, if
necessary, levy a special assessment to recover the full amount of
the expended funds within the time limits required by this section.
This special assessment is subject to the limitation imposed by
Section 5605. The board may, at its discretion, extend the date the
payment on the special assessment is due. Any extension shall not
prevent the board from pursuing any legal remedy to enforce the
collection of an unpaid special assessment.

5520.  (a) When the decision is made to use reserve funds or to
temporarily transfer moneys from the reserve fund to pay for
litigation pursuant to subdivision (b) of Section 5510, the
association shall provide general notice pursuant to Section 4045 of
that decision, and of the availability of an accounting of those
   (b) Unless the governing documents impose more stringent
standards, the association shall make an accounting of expenses
related to the litigation on at least a quarterly basis. The
accounting shall be made available for inspection by members of the
association at the association's office.
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