—Confused in Clearwater
“If the association maintains statutory reserves, Section 720.303(6)(e) of the Act requires that reserves shall be computed by a formula based upon the estimated remaining useful life and established replacement cost or deferred maintenance expense of each reserve item. This calculation is usually contained in a document called the “reserve schedule,” which would need to be part of the proposed budget.
“However, unlike the law for condominiums, there is no requirement that an HOA send out the proposed budget in advance of the meeting where it will be adopted. Rather, Section 720.303(6)(a) of the Act simply states that the association “shall provide each member with a copy of the annual budget or a written notice that the budget is available upon request at no charge to the member.” This is generally interpreted to mean the adopted budget, as opposed to the proposed budget, must be sent, or made available to, the homeowners.
“If the association does not maintain “statutory reserves,” any reserve funds included in the budget are usually referred to as “non-statutory reserves.” There is essentially no regulation in the Act as to such funds, except that Section 720.303(6)(b) of the Act states that the funding of non-statutory reserves “is limited to the extent that the governing documents limit increases in assessments.”