Developers must establish and fund reserve accounts for their projects during the initial years while they retain control of the homeowner associations. However, there are various legal and bookkeeping maneuvers that they often employ to attempt to avoid or diminish their contributions for reserves, which are intended for use for major future maintenance expenditures.

For the developer of the Sullivan Ranch community in Mount Dora north of Orlando, it appears that its decision to stop funding reserves after it established the account and began funding it in 2007 has significantly backfired. The Fifth District Court of Appeal recently overturned a lower court’s summary judgment, which concluded that the developer was excused from funding reserves while it remained in control of the association and was funding deficits in its operating expenses.

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