In his recent blog, attorney Eric Glazer highlighted a major flaw in Senate Bill 1742—and I couldn’t agree more. While the bill may be rooted in good intentions, it risks replacing clear, practical guidance with a web of complexity that’s simply unworkable for the average community association.
Why Complex Reserve Investment Rules Don’t Work
The truth is, very few HOA or condo associations have volunteers with the expertise to understand investment strategy, assess risk profiles, or develop detailed investment policies. Now, under the new law, we’re expecting unpaid board members—who already juggle vendor management, budgeting, and member disputes—to become part-time fund managers?
Tasks like drafting investment policy statements, recording committee meetings, and evaluating advisors might sound reasonable in theory, but in practice, they’re overwhelming. And when board members are unsure or fearful of making a mistake, they’ll often do the safest thing: nothing.
The Risk of Inaction
Ironically, overregulation could result in investment paralysis. Communities may end up with underperforming reserves, or worse, take misguided steps that put funds at risk in an attempt to “check all the boxes.”
Simple, Safe Reserve Investment Strategies
Instead of forcing board members into roles they didn’t sign up for, let’s focus on simple, compliant solutions that are easy to understand and implement. Here are five smart, low-risk steps your board can take to manage reserve fund investments effectively:
1. Stick with FDIC-Insured Products
As Glazer recommends, FDIC-insured bank accounts are the safest route. These include high-yield savings accounts and CDs (certificates of deposit), which offer both principal protection and modest returns.
2. Ask Your Bank About Options
Your bank may offer money market accounts or CD ladders tailored to your community’s liquidity needs. Don’t guess—ask.
3. Know Your Reserve Schedule
Before investing, understand your reserve study and identify which capital improvement projects are due in the next 12 to 24 months. Keep those funds liquid and accessible.
4. Document Every Decision
Even without a formal investment committee, your board can create a simple resolution to document decisions. Transparency matters—and can offer legal protection.
5. Consult a Reserve Investment Professional
For larger portfolios or more advanced options, partner with a licensed investment advisor who understands association reserves and Florida statutes. Don’t go it alone.
Clear Policies Lead to Confident Boards
Simplicity isn’t carelessness—it’s clarity. HOA and condo board members aren’t meant to be financial experts, and they shouldn’t be forced to act like them. Instead, let’s support them with accessible tools, straightforward policies, and trusted professionals who can help safeguard their community’s future.
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