What if my board refuses to make a reserve study for our project or refuses to establish a reserve?
Owners can request mediation or arbitration or go to court to persuade their boards to follow the reserves law. The reserves law requires reserve studies and funding of reserves. Owners can sue their boards for breach of fiduciary duty if the boards fail to follow those legal requirements. As a result, board members who ignore the reserves law may be subject to personal liability. Boards who fail to follow the reserves law will also be denied the good faith exemption for those who try to follow the law. Therefore, owners who are damaged by lack of reserves could have a much better chance of collecting from boards who ignore the law.