Community Association Budget chapter 15

A community association budget is all of the following, EXCEPT:

• A financial plan

• An estimate of revenue and expenses for a fiscal year

• A guide to compare actual to budgeted revenue and expenses throughout the fiscal year

• The monetary limits the association is permitted to spend on each of its line item accounts

Complete this sentence. Community association maintenance fees or assessments should

• Be affordable to the members

• Provide sufficient funds to achieve the objectives of the association

• Be adjusted annually based upon inflation

• Be paid no less frequently than quarterly

Which of the following is NOT true about a fiscal year?

• It differs from a calendar year since its beginning and end dates may encompass any twelve-month period including January 1 to December 31.

• The bylaws usually state the fiscal year of the association.

• Community associations are required, by statute, to create an annual budget based upon the association’s fiscal year.

• It does not affect when the association must submit its tax return and taxes to the IRS, as an association must submit tax returns by April 15th of each year.

Which of the following is NOT an example of a budget objective to preserve, protect, and enhance the value and property of the association?

• Replace lobby furniture

• Provide legal services for enforcement of use restrictions and rules

• Ensure annual HVAC inspection and maintenance

• Keep assessments at the current year level

If an association has certain limited common elements (LCEs) and the cost for maintaining those elements is paid for by members entitled to use them, what must the budget do?

• Include the revenue and expenses that pertain to those LCEs within the revenue and expense of the budget paid for by all members

• Include a separate schedule for revenue and expenses that pertain to those LCEs, as a charge to members entitled to use those LCEs

• Include a disclosure stating that members entitled to use those areas will forfeit their right of use if they are delinquent in payment of their maintenance fees

• Subtract the cost of maintaining the LCEs from the total expenses for the budget

A condominium must include all of the following expense accounts in its budget, EXCEPT:

• Fees payable to the DFCTSMH

• Management fees

• Taxes on association property

• Renovations of member owned property

What is operating capital?

• The monies paid to the association at the time a unit or parcel is conveyed from one member to another, often referred to as “capital contribution”

• The monies an association receives from a developer at turnover

• The surplus in an association budget

• The monies in an association budget allocated for “operations”

A timeshare must include all of the following items in its budget, EXCEPT:

• Insurance

• Management fees

• Exchange fees

• Maintenance charges to members

• Security provisions

Which of the following is NOT true about an HOA budget?

• F.S. 720 does not specify which common expenses must be included in the budget.

• It must include the estimated surplus or deficit as of the beginning of the new fiscal year.

• It must include fees and charges for recreational amenities.

• It must include revenue and expenses for the upcoming fiscal year.

Which statement is TRUE about the listing of reserves in the operating section of a proposed condominium budget?

• The association must list each reserve account with a reserve total.

• The amount of reserves is not included in calculating assessments.

• The association must have a single line item, titled “Reserves” that displays the amount required to fully fund all reserve categories.

• Condominium proposed budgets are not required to have reserves.