A condominium or cooperative board of directors must provide for certain expenses in a proposed annual budget, including the following items, as applicable (example: if the association does not have a manager or management company, it will not have a line item for management fees):
The budget must include the estimated revenue and expenses for the upcoming fiscal year and the estimated surplus or deficit as of the end of the current fiscal year. The budget must also set out separately all fees or charges for recreational amenities, whether they are owned by the association, the developer, or another entity. Timeshares F.S. 721.07(5)(t), F.S. 721.55(4)(h)5, and F.A.C. 61B-40.004 requires each year an itemized annual budget, that includes all estimated revenues and expenses, be provided to all purchasers. The budget shall be the final budget adopted by the managing entity for the current fiscal year and shall include the following accounts: ● Administration of the managing entity ● Insurance ● Maintenance A copy of the approved annual budget for a timeshare plan is filed with DFCTSMH within 30 days after the beginning of each fiscal year. ● Managing entity means the person or entity who operates or maintains the timeshare plan. The managing entity can be the developer, a separate manager or management firm, or an owners’ association. ● Division of Florida Condominiums, Timeshares, and Mobile Homes (DFCTMH) is a division within the Florida Department of Business and Professional Regulation (DBPR). The Division plays a crucial role in the regulation and oversight of condominiums, cooperatives, timeshares, and mobile homes in Florida. ● Effective July 1, 2025, F.S. 468.438 Timeshare management firms: A timeshare management firm and any individual licensed under this part who is employed by a timeshare management firm are governed by F.S. 721.13 and not by F.S. 468.4335. ● Operating capital ● Other expenses ● Reserves for deferred maintenance and for capital expenditures ● Rent for facilities ● Security provisions ● Taxes on timeshare property ● This action removed the provision that any managing entity performing community association management must comply with part VIII of F.S. 468. Timeshares, F.S. 721, provides that to determine if the assessments exceed 115% of the preceding fiscal year the calculation must exclude the cost of insurance. Effective July 1, 2025, relating to Timeshare statute 721.13 Management, requires that If a timeshare management firm or an owners’ association provides goods or services through a parent, affiliate, or subsidiary of the timeshare management firm, the fact that a related party is providing goods or services must be disclosed annually to the members of that owners’ association in a number of ways, including as an explanatory note to the annual budget. The other options for disclosure included in the management contract; by mail sent to each owner’s address on file for providing notice; in the notice of an annual or special meeting of the owners; by posting notice on the website of the applicable timeshare plan; or by any owner communication used by the managing entity .
● Administration of the association ● Fees payable to the DFCTMH ● Insurance ● Maintenance
● Management fees ● Operating capital ● Rent for recreational and other commonly used facilities ● Other expenses ● Reserves ● Security provisions ● Taxes on leased areas ● Taxes on association property ● Reserves The annual budget required by F.S. 718.112(2)(f) and any proposed budget to be considered at budget meeting, must be on the website for those associations required to have a website. Effective January 1, 2026, condominium associations with 25 or more units shall post digital copies of the documents specified in 718.111, (12)(g) subparagraph 2, which includes the budget and proposed budget, on its website or make such documents available through a mobile app. Multi-condominium A multi-condominium refers to a real property containing two or more condominium buildings, each of which must have a separate budget reflecting estimated revenue and expenses specific to that building. Depending on the master association documents, assessments may be paid by the building or by the member. If the building pays the master, it includes a single income and a single expense line item in the budget for that master association. If the members pay the master directly, the building will not reflect master association revenue or expenses. Mixed-use condominium A mixed-use condominium association consists of both residential and commercial units. The declaration or bylaws may define the requirements for a mixed-use association. Generally, the association must budget separately for the community association portion versus the commercial portion. In some cases, the association owns and leases the commercial space. In such cases, the budget most likely will include a separate section for the commercial elements, indicating both the revenue and expenses. In other cases, for instance, where there are condominium units and hotel units, the entity may require a separate budget for each. The documents should include a formula for the allocation of expenses for shared common elements, such as the pool, conference rooms, elevators, etc. Homeowners’ association (HOA) The basic requirements for homeowners’ association budgets are provided in F.S. 720.303(6). There is no statutory requirement for the common reserves or common expenses to be included in the HOA budget. The budget may include reserves, as specified by the documents or statutes. It is necessary to review the documents of homeowners’ associations to determine the budgetary requirements.
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Book Code: CAMFL1526
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