Florida Community Association Manager Practice Exam

Must a condominium or cooperative association include fully funded reserves in the proposed budget?

1. Yes, it is mandatory

2. No, it is optional

3. Yes, unless voted to waive

4. No, unless stated otherwise

The correct answer is: Yes, unless voted to waive

The requirement regarding fully funded reserves in the proposed budget of a condominium or cooperative association is guided by Florida statutes. The correct answer highlights that while it is generally expected for associations to include fully funded reserves in their budgets, there is a provision that allows for those reserves to be waived if a vote is taken by the members of the association. This means that associations are not strictly mandated to have fully funded reserves if the members collectively decide to opt out of that requirement through a proper voting process. This flexibility enables associations to manage financial obligations according to the preferences and priorities of their members, particularly in times of financial strain or when members prefer to utilize funds for other purposes rather than contributing to reserves. In short, the inclusion of fully funded reserves is typically a best practice for financial stability, but members can choose to waive this requirement if they reach a consensus through a vote, thus reinforcing the importance of member participation in financial decisions within the association.