Florida Community Association Manager Practice Exam

What should a reserve schedule include?

1. Only the total amount of reserves

2. List of maintenance items and their estimated cost

3. Only the remaining fund balance

4. List of all members' names

The correct answer is: List of maintenance items and their estimated cost

A reserve schedule is an essential financial document for community associations, and it plays a critical role in ensuring that the community has adequate funds set aside for future repairs, replacements, and maintenance of common property. The correct answer emphasizes the importance of detailing maintenance items alongside their estimated costs. Including a list of maintenance items along with their estimated costs in the reserve schedule is vital for several reasons. It helps the association to plan for upcoming expenses related to the maintenance and repair of community assets, such as roofs, pools, tennis courts, and roads. By identifying specific items, the association can allocate funds appropriately, ensure transparency for members, and make informed financial decisions. Furthermore, this approach promotes better financial management as it allows for regular review and adjustment based on actual expenses or changes in the expected lifespan of community assets. The other options do not provide the comprehensive information that a reserve schedule should entail. Merely listing the total amount of reserves or the remaining fund balance does not offer insights into future financial planning. Similarly, listing all members' names fails to relate to the financial adequacy of the community’s resources for necessary maintenance and improvements.