§ 34-291. HOA accounts for maintenance and repair.

In addition to the several requirements of section 34-290(h)(1)—(21), (i) and (k), the declaration for each subdivision approved as a "gated community" shall provide, at a minimum, the following requirements, restrictions, terms, conditions, and limitations with respect to the accounts required for the maintenance and repair of the streets, drainage, and other infrastructure for the subdivision and the monies on deposit in those accounts.

(a)

Required HOA asset accounts. The HOA must create, deposit monies into, retain in perpetuity, and replenish from time to time the following accounts, which are referred to in this article collectively as the "required HOA accounts":

(1)

A routine-infrastructure-maintenance account;

(2)

A capital-repair/streets account;

(3)

A capital-repair/drainage pond account;

(4)

A capital-repair/other infrastructure account; and

(5)

A storm debris removal account.

Each of these accounts must be asset accounts kept separate and apart from all other funds and accounts of the HOA, and for accounting purposes the HOA may not commingle these accounts, either with each other or with other funds and accounts of the HOA. However, notwithstanding the foregoing, the monies in the above accounts may be commingled with monies in other HOA accounts for banking and investment purposes, and may be pooled with other HOA monies in a common investment program, so long as the financial books and records of the HOA account for these monies separately and apart from all other HOA monies and keep such monies earmarked for the purposes set forth below. All earnings from the investment of monies in the required HOA accounts shall remain in their respective accounts and shall follow their respective principal.

(b)

Use of accounts.

(1)

Routine-infrastructure-maintenance account. Monies on deposit in the routine-infrastructure-maintenance account, including any investment earnings, may be used by the HOA or by the developer with the written consent of the board of directors of the HOA, only for scheduled maintenance and for unscheduled repair of the streets, drainage system, including the stormwater detention/retention areas, sidewalks, curbing, bike paths, traffic-control signage and other HOA infrastructure appurtenant to the private roads and drainage systems. If allowed by the declaration, the monies on deposit in the account may also be used for scheduled maintenance and unscheduled maintenance and repair of the entrance and exit gates and their related facilities, but the declaration shall require that the streets and drainage-system maintenance and repair take priority over the maintenance and repair of the gates and related facilities.

(2)

Capital-repair/streets account. Monies on deposit in the capital-repair/streets account, including any investment earnings, may be used by the HOA only for resurfacing and related reconstruction of the streets in the subdivision, generally every twelve (12) years after issuance by the county of the certificate of completion for the streets. The monies on deposit in the account may not be expended earlier than the twelfth anniversary of the issuance of the certificate of completion without the consent of no less than a simple majority of the owners of platted lots (excluding the developer) in the subdivision, which consent may consist of written consent and/or voting consent at a meeting called in accordance with the bylaws of the HOA, and the consents will be valid only if obtained after turnover of the subdivision infrastructure to the HOA. Under no circumstances may the monies in the account be expended before the developer turns over control of the subdivision infrastructure to the HOA.

(3)

Capital-repair/drainage pond account. Monies on deposit in the capital-repair/drainage pond account, including any investment earnings, may be used by the HOA only for major repair and reconstruction of the stormwater detention/retention areas of the drainage system, generally every ten (10) years after issuance by the county of the certificate of completion for the stormwater-drainage system. The reconstruction and repair of the detention/retention areas will include, but not be limited to, dredging and sediment removal. The monies on deposit in the account may not be expended earlier than the tenth anniversary of the issuance of the certificate of completion without the written consent of no less than a simple majority of the owners of platted lots (excluding the developer) in the subdivision, which consent may consist of written consent and/or voting consent at a meeting called in accordance with the bylaws of the HOA, and the consents will be valid only if obtained after turnover of the subdivision infrastructure to the HOA. Under no circumstances may monies in the account be expended before the developer turns over control of the subdivision infrastructure to the HOA.

(4)

Capital-repair/other infrastructure account. Monies on deposit in the capital-repair/other infrastructure account, including any investment earnings, may be used by the HOA only for major repair, reconstruction, resurfacing, and replacement of the other parts of the infrastructure related to the private streets and drainage systems, such as the stormwater conveyance systems, sidewalks, curbing, and bike paths. If allowed by the declaration, the monies on deposit in the account may also be used for the major repair, reconstruction, and replacement of the entrance and exit gates and related facilities, but the declaration must require that the repair, reconstruction, and replacement of the former items of infrastructure take priority over the repair, construction, and replacement of the entrance and exit gates and their related facilities.

(5)

Storm debris removal account. Monies on deposit in the storm debris removal account, including any investment earnings, may be used by the HOA only for the costs of storm debris clean-up and removal, such as clearing downed trees, landscape, and other storm-created debris from HOA-owned streets, sidewalks, and drainage facilities (including stormwater detention/retention areas), and removing such debris to a landfill or other county-provided drop-off site.

(c)

Required funding; required assessments.

(1)

Routine-infrastructure-maintenance account. The HOA must deposit each year into the routine-infrastructure-maintenance account an amount of money sufficient to perform all scheduled maintenance and unscheduled repair of the streets, drainage system, and other infrastructure during the subsequent year. The amount deposited, when added to investment earnings, must be no less than the amounts recommended by the engineer's report required in paragraphs (8)a. and (9)b. of section 34-290(h). If the declaration allows maintenance and repair of the entrance and exit gates and their related facilities to be paid from the routine-infrastructure-maintenance account, then the deposits each year must be increased by amounts sufficient to cover those costs.

(2)

Capital-repair/streets account. The HOA must deposit each year into the capital-repair/streets account an amount sufficient for the streets to be resurfaced and, as related to the resurfacing, reconstructed no less frequently than every twelve (12) years, and the amount must be estimated by the developer and approved by the county prior to issuance of a certificate of completion for the streets. Deposits to the account must begin in the year in which the county issues its certificate of completion and must be completed no later than the year of the twelfth anniversary of the issuance of the certificate. The amount deposited by the HOA must be no less than one-twelfth ( 1/12 ) of the estimate approved by the county. However, after turnover of the HOA the schedule of deposits may be altered such that one (1) or more annual deposits is less than one-twelfth ( 1/12 ) of the estimate, but only if a simple majority or more of all owners of platted lots in the subdivision consent in writing and/or by voting at a meeting called in accordance with the bylaws of the HOA to approve the altered schedule. If the property owners in the subdivision consent in writing to a different schedule of deposits, the revised scheduled must result in the aggregate amount of deposits during the twelve-year period being equal to or in excess of the estimate approved by the county. At the end of each twelve-year period, the HOA shall revise and update the estimated cost of resurfacing and, as related to the resurfacing, reconstructing the streets at the end of the next twelve-year period, taking into consideration actual costs incurred and expected increases in road construction costs, and shall adjust the amount of its annual deposits to the account accordingly. If for any reason expenditures are made from the account prior to the end of the twelve-year period, the amount of deposits to the account in the remaining years shall be adjusted so as to ensure that the account contains an amount sufficient at the end of the twelve-year period to pay the costs of all expected repair and/or reconstruction and resurfacing requirements.

(3)

Capital-repair/drainage pond account. The HOA must deposit each year into the capital-repair/drainage pond account an amount sufficient for the stormwater detention/retention areas in the drainage system to be restored and repaired no less frequently than once every ten (10) years, and the amount must be estimated by the developer and approved by the county prior to the issuance of a certificate of completion for the drainage system. Deposits to the account must begin in the year of which the county issues its certificate of completion for the drainage system and must be completed no later than the year of the tenth anniversary of the issuance of the certificate. The amount deposited each year by the HOA must be no less than one-tenth ( 1/10 ) of the estimate approved by the county. However, after turnover of the HOA, the schedule of deposits may be altered such that one (1) or more annual deposits is less than one-tenth ( 1/10 ) of the estimate, but only if a simple majority or more of all owners of platted lots in the subdivision consent in writing and/or by voting at a meeting called in accordance with the bylaws of the HOA to approve the altered schedule. If the property owners consent to a different schedule of deposits, the revised schedule must result in the aggregate amount of deposits during the ten-year period being equal to or in excess of the estimate approved by the county. At the end of each ten-year period, the HOA shall revise and update the estimate of the cost of restoring and repairing the stormwater detention/retention areas at the end of the next ten-year period, taking into consideration actual costs incurred and expected increases in drainage-system construction costs and shall adjust the amount of its annual deposits to the account accordingly. If for any reason expenditures are made from the account prior to the end of the ten-year period, the amount of deposits to the account in the remaining years will be adjusted so as to ensure that the account contains an amount sufficient at the end of the ten-year period to pay the costs of all expected restoration and repair requirements.

(4)

Capital-repair/other infrastructure account. The HOA must deposit each year into the capital-repair/other infrastructure account an amount sufficient for other subdivision infrastructure related to the streets and drainage system, such as stormwater conveyance systems, sidewalks, curbing, and bike paths, to be reconstructed and/or repaired no less frequently than once every fifty (50) years, and the amount must be approved by the county prior to issuance of a certificate of completion for those improvements. Deposits to the account must begin in the year in which the county issues its certificate of completion for the improvements and must be completed no later than the fiftieth anniversary of the issuance of the certificate. The amount deposited each year by the HOA must be no less than one-fiftieth ( 1/50 ) of the estimate approved by the county. However, after turnover of the HOA, the schedule of deposits may be altered such that one (1) or more annual deposits is less than one-fiftieth ( 1/50 ) of the estimate, but only if a simple majority or more of all owners of platted lots in the subdivision consent in writing and/or by voting at a meeting called in accordance with the bylaws of the HOA to approve the altered schedule. If the property owners consent to a different schedule of deposits, the revised schedule must result in the aggregate amount of deposits during the fifty-year period being equal to or in excess of the estimate approved by the county. At the end of each fifty-year period, the HOA shall revise and update the estimate of the cost of reconstructing and/or repairing the improvements, taking into consideration actual costs incurred and expected increases in reconstruction and repair costs, and shall adjust the amount of its annual deposits to the account accordingly. If for any reason expenditures are made from the account prior to the end of the fifty-year period, the amount of deposits to the account in the remaining years will be adjusted in a manner to ensure that the account contains an amount sufficient at the end of the fifty-year period to pay the cost of all expected reconstruction and/or repair requirements.

(5)

Storm debris removal account. The developer must deposit an initial amount into the storm debris removal account equal to two hundred fifty dollars ($250.00) per acre of land in the platted subdivision (excluding wetlands, conservation areas, and natural waterbodies). The HOA must deposit each year into the account, an amount equal to one-fifth ( 1/5 ) the initial amount, until the storm debris account is equal to double the initial amount plus the annual Engineering News Record construction cost index. Subsequently, the HOA must make deposits at least annually into the storm debris removal sufficient to maintain the balance at double the initial amount plus the annual Engineering News Record construction cost index. Any time the HOA must expend funds in the storm debris removal account after a storm event, the HOA shall replace such funds (by special assessment, if necessary) within three (3) years of such expenditure sufficient to bring/restore the balance of the storm debris removal account to the balance prior to the expenditures, plus the annual Engineering News Record construction cost index.

(6)

Developer's required contribution. To help ensure the financial ability of the HOA to maintain the infrastructure after turnover of the infrastructure, the five (5) required accounts must be created and funded by the developer, in the initial amount required for the storm debris removal account in section 34-291(c)(5), and for the other four (4) required accounts, in an amount equal to one (1) year of assessments prior to plat recording or issuance of certificate of completion for the streets, drainage, or other related improvements for the subdivision. Such initial assessments are in addition to any other assessments required to be paid by the developer under section 34-291(c)(7).

(7)

Required assessments. The obligation to collect and pay assessments shall commence as of the date on which the county issues its certificate of completion for the streets, drainage system, and other related improvements for the subdivision. However, if no plat has been recorded as of that date, the obligation to collect and pay assessments shall commence as of the date the plat is recorded in the Public Records of Orange County, Florida. The HOA shall impose and collect assessments against each platted lot in the subdivision, including lots owned or controlled by the developer and by any builder, without exception. The assessments must be uniform and equitable and must be imposed and collected in amounts sufficient, when added to investment earnings and other available revenues of the HOA, if any, to make all required deposits to each of the required HOA accounts.

Notwithstanding the foregoing, if in the opinion of the County Engineer the subdivision infrastructure has substantially deteriorated at the time a plat is approved, the county may require an additional payment of assessments by the developer to address the loss of useful life of the deteriorated subdivision infrastructure.

(d)

Financial reports and other requirements. Each year the HOA shall cause a financial report of the required HOA accounts to be performed and prepared, and a copy of the report shall be submitted to each owner of property in the subdivision within the time frame required under the "Financial Reporting" requirements of chapter 720 of the Florida Statutes. At a minimum, the report shall confirm the existence of each of the required HOA accounts and report the amounts of deposits into and expenditures from the account during the period year, along with an itemization of the expenditures from the required HOA accounts. Finally, the financial report shall disclose whether any of the required HOA accounts has on deposit less than the amount required under the declaration.

(Ord. No. 2002-22, § 1, 12-10-02; Ord. No. 2009-04 , § 2, 2-24-09)