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Florida Condo & HOA Legal Blog News & Updates on Condo & HOA Laws & Legislation in the State of Florida

Category Archives: Budgets, Reserves & Financial

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Associations Must Make Financial Statements Available to Members

Posted in Budgets, Reserves & Financial, Reader Q&A

Question: I belong to a voluntary property owners’ association which has raised money for various projects within our community. However, I did not renew my membership this year by paying the annual dues because I was dissatisfied with the association’s prior accounting of its funds. Is there any way to force a voluntary association to… Continue Reading

Florida Community Associations are Obligated to Provide Financial Reports to Owners

Posted in Budgets, Reserves & Financial, Operations, Reader Q&A

Question: At the recent annual meeting for my condominium association the owners were presented with a question asking whether the association should waive the requirement to have an audit of the association financial records conducted. The same question has been asked for the past few years. I looked and our bylaws specifically require an audit… Continue Reading

HOA Reserve Accounts: What Are You Missing?

Posted in Budgets, Reserves & Financial, Common Areas, Fiduciary Duty of Board of Directors, Operations, Uncategorized

Maintenance, repair and upgrade of the common areas of a community can be costly, and reserve accounts can be a great planning tool for large projects. In 2007, Section 720.303(6) of the Florida Statutes was added to the Florida HOA Act establishing procedures and rules related to reserves if a) they were originally established by… Continue Reading

Do Budget Workshops Fall Under Sunshine Law?

Posted in Budgets, Reserves & Financial, Meetings, Operations, Reader Q&A

Question: I live in a homeowners’ association. The board of directors has historically held a budget workshop with only the chief financial officer of the management company and two of the five directors present. The association is governed by a five member board, so that board argues that because a quorum is not present, they… Continue Reading

Condominiums That Fail To Properly Fund Reserves Will Usually Resort to Costly Special Assessments

Posted in Budgets, Reserves & Financial, Operations, Reader Q&A

Question: My condominium association has no reserve funds for our roof. Every year at the annual meeting, the board asks the owners to waive the reserve funding and every year the owners vote to waive the reserves. Now we need a new roof for the building and the board is telling the owners that there… Continue Reading

Should You Crowdfund Your Next Real Estate Project?

Posted in Budgets, Reserves & Financial, Construction

(This post originally appeared on Biz Law Today) If you are in the real estate business, you have probably seen the headlines about the first crowdfunded condo opening in New York City this month. This is just the latest example of the growing real estate crowdfunding movement that seems poised to explode in the coming years. What… Continue Reading

Does Allowing Neighboring Community To Use Storage Area Have Tax Implications?

Posted in Budgets, Reserves & Financial, Common Areas, Reader Q&A

Question: The common area of our homeowners’ association includes an area for storage of boats and recreational vehicles. Very few of our owners actually use the area, but we have received inquiries from people in adjacent communities as to whether they could pay a fee to store their boats and recreational vehicles in this area…. Continue Reading

When Must an HOA Board Provide Reserve Schedules to Residents?

Posted in Budgets, Reserves & Financial, Reader Q&A

Question: When must the board for a homeowners’ association provide the reserve schedules to the members? Can this information be provided at the annual meeting, or does it need to be included with the pre-meeting notice? D.D. (via e-mail) Answer: It depends. Chapter 720 of the Florida Statutes, often called the “Florida Homeowners’ Association Act”… Continue Reading

HOA Interfund Reserve Transfers Usually Board Prerogative

Posted in Budgets, Reserves & Financial, Reader Q&A

Question: Can the board of a homeowners’ association move monies from one reserve account to another, or for operating purposes, without membership approval? D.D. (via e-mail) Answer: Section 720.303(6)(h) of the Florida Homeowners’ Association Act states that “statutory” reserve funds (this is the industry accepted legal “slang” term and not a term used in the… Continue Reading

Association’s Pooled Reserves Require Attention To Detail

Posted in Budgets, Reserves & Financial, Operations, Reader Q&A

Question: I have a follow-up question to your recent column concerning reserve accounts. It is my understanding that the association’s board of directors, without a member vote, can change from straight line reserve funding to pooled reserve funding for future reserve funds. However, to move existing straight line reserve funds to a pool method would… Continue Reading

Pooling Condominium Reserves Offers Greater Flexibility

Posted in Budgets, Reserves & Financial, Operations, Reader Q&A

Question: Our condominium association recently hired a new manager. She tells us that we should set up our reserve accounts in a “pool”. Can you explain what this means to us?  J.E. (via e-mail) Answer: “Cash flow” funding of condominium reserves, sometimes also referred to as the “pooling” method of reserve funding, has been around… Continue Reading

Condo and Co-op Budgeting Basics

Posted in Budgets, Reserves & Financial

It goes without saying that every association must adopt a budget each year reflecting the estimated income and expenditures of the association. The Florida Administrative Code requires the budget adopted by the Board of Directors to contain some basic features. The budget must contain the beginning and ending dates. Adopting a budget for the “2015”… Continue Reading

Condo Statute Does Not Place Cap on Budget Increases

Posted in Budgets, Reserves & Financial, Operations, Reader Q&A

Question: We own a unit in a condominium association and this year our assessments increased significantly. I was told that the Condominium Act did not allow boards to increase assessments more than ten percent per year without an owner vote. Is this correct?  J.C. (via e-mail) Answer: No. Section 718.112(2)(e)2.a., Florida Statutes, provides that if… Continue Reading

Condos & HOAs can save money by conserving water

Posted in Budgets, Reserves & Financial, Fiduciary Duty of Board of Directors, Operations

The legislature is concerned about the quality of water delivered to end users in this state. While water rates have increased (in some cases significantly) over the past few years, apparently those increases do not translate to better water quality. The bill is designed to create additional water standards and allow customers to petition to… Continue Reading

Condo & HOA Common Expenses: Can the board spend your money for that?

Posted in Budgets, Reserves & Financial, Fiduciary Duty of Board of Directors

Last year we featured an article in our Community Update publication explaining how to evaluate whether certain expenses are appropriate in community associations. The term “expenses” is probably defined in your Condo/HOA documents and it is likely that that definition encompasses expenses that seem to go beyond the strict statutory definitions. Section 718.115, Florida Statutes… Continue Reading

Condo Associations & HOAs Losing Millions Nationwide

Posted in Budgets, Reserves & Financial, Fiduciary Duty of Board of Directors

According to recent reports, more than 1.2 million worthless checks enter the banking system every day in the United States.  Check fraud losses account for more than 20 billion dollars per year and the number of cases is increasing by approximately 25% each year. I know from my own experience with community associations that fraud,… Continue Reading

Reserve Accounts Can Be Established For Uninsured Losses

Posted in Budgets, Reserves & Financial, Insurance, Reader Q&A

Question: Is it legal for a condominium association to establish a reserve account for “uninsured losses?” Are these reserves limited to deductibles, or can they include losses that are not insured? S.K. (via e-mail) Answer: In response to your first question, it is legal to establish a “reserve” account for uninsured losses. There may be… Continue Reading

Shenanigans are Unlikely with this Board

Posted in Budgets, Reserves & Financial, Official Records, Reader Q&A

Question: Our condominium association sends the owners monthly budget reports, including year-to-date expenditures and comparisons with previous years’ expenditures.  Some of our owners are leery about what we see.  Can we demand an independent audit?  If so, what is the procedure?  D.B. (via e-mail) Answer:  First, I would say that a condominium association routinely providing… Continue Reading